Learning to Invest: A few books speak volumes
If you want to learn to invest wisely, one of the best ways is by reading. Here are some worthwhile titles to add to your bookshelf:
The Methods of Wall Street Exposed: Wealth Without Worry by James N. Whiddon with Lance Alston (Brown Books, $24.95). I’ve put this book on the shelf devoted to my favorite investing titles. Whiddon is a fee-only investment adviser in Dallas, and as I read the book, I found myself agreeing with everything he said. Whiddon, for instance, is a strong advocate of passive investing though index and exchange-traded funds.
FastWeb College Gold by Mark Kantrowitz (Collins, $21.95). Anxious parents need to know how to get their kids into a good school with the least amount of money. FastWeb College Gold includes many practical step-by-step tips on how to shoulder this herculean cost. It provides a worksheet that will help you calculate, using the federal formula, how much your family will be expected to pitch in for college expenses. The book also provides a timetable for what high school students need to be doing as the clock ticks toward college. Kantrowitz is the creator of FinAid! (www.finaid.org), a definitive online resource for financial aid information.
Parents of teenagers should also check out Paying for College Without Going Broke, 2006 Edition, by Kalman A. Chany with Geoff Martz (Princeton Review). A 2007 edition is due out Oct. 10, 2006. One of the more valuable chapters shares short-term strategies for increasing the chances of receiving financial aid. The author also provides line-by-line instructions on how to fill out the Free Application for Federal Student Aid, which must be completed by any family hoping for financial aid. Another chapter provides important advice for divorced parents.
Credit Scores & Credit Reports: How the System Really Works, What You Can Do, Second Edition by Evan Hendricks (Privacy Times, $19.95). There are probably few people who think that FICO is the misspelling of a dog’s name. Your FICO score, which is generated from your credit reports, can greatly affect your mortgage interest rate, how much you’ll have to pay for your car loan and even whether someone will rent you that two-bedroom apartment overlooking the pool. The book explains how the murky business of credit scoring works and how you can boost your scores. The author regularly testifies at congressional hearings and is the founder of Privacy Times, a respected newsletter that covers privacy and Freedom of Information Act law and policy.
Seven Stages of Money Maturity, Understanding the Spirit and Value of Money in Your Life by George Kinder (Dell, $13.95). The author, a Buddhist, is a Harvard-trained certified financial planner and a teacher—not a career combination you see very often. Kinder contends we spend so much time chasing money and trying to make more that we often lose sight of spiritual and psychological issues surrounding our bank balance. In what is perhaps the most thought-provoking part of the book, Kinder asks his readers three questions: What would you do with your money and how would you live your life if you were a modern-day Midas, who had an unlimited supply? How would you live your life if you had just five to 10 years left? And finally, you’ve got just 24 hours left. What regrets, longings and other feelings are you experiencing? The last question, the author says, cuts deepest of all and can help someone discover which issues in life are superficial and which are important.
The Bogleheads’ Guide to Investing by Taylor Larimore, Mel Lindauer, Michael LeBoeuf and John C. Bogle (Wiley, $24.95). The authors are leaders on the Vanguard Diehards forum, which you can find on Morningstar’s Web site (www.morningstar.com). The book is named after Jack Bogle, the founder and retired chairman of the Vanguard Group, sometimes called St. Jack by his admirers. It provides sound advice on a variety of issues, including mutual funds, bonds, diversification and taxes. If the book prompts questions, go ahead and post them on the Vanguard Diehards forum, which attracts admirers of common sense, low-cost investing. Seasoned investors and newbies gather at this forum, which receives more than 25,000 hits a day. It’s common for forum visitors, who have good intentions but a pitiful lack of investing knowledge, to shoot up an online flare for help. And there is usually some online Samaritan who will bail them out.