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Making your money work for you
REVIEWS BY SUSAN RUCCI What's your New Year's resolution? If you're hoping to embrace a more profitable monetary agenda this year, there's a new crop of personal finance books that offer smart, easy-to-follow ideas on how to get the most bang from your bucks. These new books seem to reflect a subtle shift away from previous decades' embrace of the "greed is good" philosophy, replacing it with a "financial stability is better" approach that's more appropriate for uncertain economic times.
By Jim Cramer Simon & Schuster, $26 352 pages ISBN 9781416558859
A 21st-century powerhouse
By Jim Rogers Random House, $26.95 240 pages ISBN 9781400066162
By Catherine S. McBreen and George H. Walper Jr. Portfolio, $25.95 256 pages ISBN 9781591841753
A richer life
By David Wann Griffin, $14.95 304 pages ISBN 9780312361419
Susan Rucci writes from Washington, D.C.
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My favorite read of the group is Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer). You may know Cramer from his high-energy appearances on CNBC's "Mad Money." A former hedge fund manager, he's intense and passionate about making your money do the most for you. In Stay Mad, he targets the financial novice who invests in a 401(k) to save money for retirement but wants his or her money to do more in the long run. Some of what Cramer preaches isn't exactly revolutionary: He stresses the evils of carrying credit card debt and urges readers to create a budget and to purchase health insurance if they don't get it through their employer because medical expenses are the number one cause of bankruptcy today. Besides the economic nuts and bolts, Cramer gives practical suggestions—with solid evidence to back up his arguments—on what to do with your 401(k): Only invest what your company matches and don't invest in the company stock (which could deliver a double whammy if you're laid off due to a business downturn). Cramer offers a list of 50 great stocks with long-term potential, weighted heavily toward energy companies as well as American favorites like McDonald's and Pepsi. This is the kind of book you'll want to keep in your home library.
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Another provocative read is A Bull in China: Investing Profitably in the World's Greatest Market by Jim Rogers. Part of the enjoyment in reading this book is getting the backstory on Rogers, who co-founded the Quantum Fund with George Soros. Rogers retired at the age of 37 and rode a motorcycle across China almost 30 years ago. His book gives the American investor specific advice on which Chinese enterprises are worth investing in (power, energy and transportation, for example), along with an economic forecast on where each company is headed in the coming decades. Rogers writes that while the 19th century belonged to England and the 20th to America, the 21st will see China's turn as the economic powerhouse of the world. He even urges parents to teach their children Chinese. Time magazine nicknamed Rogers the "Indiana Jones of finance," and those willing to heed the advice of this world traveler may find China to be a monetary risk worth taking.
Catherine S. McBreen and George H. Walper Jr. conducted in-depth research on 5,000 millionaire and mega-millionaire households to learn more about who these people are, how they accumulated their wealth and how they invest it. The result is Get Rich, Stay Rich, Pass it On: The Wealth-Accumulation Secrets of America's Richest Families. The book offers historical perspective on wealthy families like the Vanderbilts, who gained much of their fortune from shipping and railroads yet lost most of it by selling off real estate investments and squandering money on indulgences such as yachting and horse breeding. As the authors warn, investments must be income-producing, so real estate will always be a good choice, while a Van Gogh, while lovely to look at, doesn't put money in the bank.
If all this talk about striking it rich makes you a bit squeamish, author David Wann offers a different approach. In Simple Prosperity: Finding Real Wealth in a Sustainable Lifestyle, he argues that you don't necessarily need more money to live a fulfilling life; rather, you need a new approach to what defines happiness. Wann says that by taking care of your health and investing in social interaction, you can help to keep medical costs at bay, which means more money for you. He also points out that by going slightly green (planting a tree near your house) you can save money by using less air conditioning. Simple Prosperity is a dense, information-packed read that helps us rethink everyday choices to shape our ultimate prosperity.