The quality of the book reviews we received as part of our first gift card give away were astounding, terrific, mind-blowing even! I didn’t know what to expect or what quality to expect, but I was seriously impressed. Everyone who entered really brought their A-game. 

Thanks Guest Judges!

I absolutely must thank my guest judges again. They read through all of the entries and they were very vocal about how great the entries were. I thank them for helping to making this very tough decision.

• Gyutae @ Money Crashers
• Dave @ Twenty Something Money
• Ninja @ Punch Debt In The Face
• Toni @ Debt Free Divas

The Entries

We had 8 well thought out entries. I’m not going to go over them in detail. If that’s what you’re looking for, just go read them! But I want to mention each of them and what book they recommended.

Eric @ NarrowBridgeFinance suggested “The Automatic Millionaire“.
Kevin @ Thousandaire.com suggested “The 4-Hour Work Week“.
Mark @ buylikebuffett.com suggested “The Intelligent Investor“.
Julie Bestry @ juliebestry.com suggested “The Money Book for Freelancers, Part-Timers, and the Self-Employed“.
Charissa Arsaoui suggested “Your Money or Your Life“.
Jaymus @ realizedreturns.com suggested “The Millionaire Next Door“.
Jacob @ My Personal Finance Journey suggested “Stocks for the Long Run“.
Demetra Mensah-Bonsu suggested “The Motley Fool Investment Guide for Teens: 8 Steps to Having More Money Than Your Parents Ever Dreamed Of“.

The Top 3

The 4 guest judges each sent me their top 3 picks. From that, I looked to see who was voted for the most. There were definitely three that stood out the most, but the two at the top of the list tied for first!

In third place, we have  Mark who suggested “The Intelligent Investor“.

The tie was between Jacob who suggested “Stocks for the Long Run” and Julie Bestry who suggested “The Money Book for Freelancers, Part-Timers, and the Self-Employed“.

The Tie-Breaker

I was looking for an impartial way to break the tie. I was going to choose the winner myself, flip a coin or ask my wife. Frankly, I was having a hard time choosing so I consulted my wife, fairest of fair, righter of wrongs, decisive to-a-tee and caterer to the City of New York. And she decided…

The Winner Is…

Julie Bestry for her well written and poignant review of “The Money Book for Freelancers, Part-Timers, and the Self-Employed“.

The Full Text of the Reviews…

As I promised, I’m re-posting the top 3 reviews here.

#1 Julie Bestry: “The Money Book for Freelancers, Part-Timers, and the Self-Employed”

While I enjoy personal finance books like those of Jean Chatzky, Suze Orman and David Bach, I find that much of their advice doesn’t necessarily apply to me (a frugal, female, single, childless solopreneur with neither strangling debt or nor appreciable wealth to manage). I put their advice to great use with my clients — I’m a Professional Organizer — but I have different financial conundrums.

Thus, I’ve been delighted lately by The Money Book for Freelancers, Part-Timers, and the Self-Employed by Joseph D’Agnese and Denise Kiernan. The book focuses on procedural issues for solopreneurs who have unpredictable cash flow but usually predictable (and predictably high) expenses.

There’s certainly advice on saving and wisely resolving debt, but the authors provide a particularly practical (and psychologically satisfying), methodical system for managing irregular (or irregularly-received) revenue and dealing with predictable expenses, retirement savings, taxation and unexpected/emergency expenses.

Advice ranges from the typical on personal finance (debt, savings, health savings accounts, providing for one’s loved ones with wills and insurance, etc.) to what most personal finance books are sadly lacking for self-employed people: structured guidance for pricing, getting paid and handling money when one is both the employer and employee. (Personal finance books often advise one how to set about asking for a raise, a concept rife with complexity when one is both the boss and the (contracted) employee.

D’Agnese and Kiernan’s strategies are simple and logical, but their philosophy of “The Power of Small” is appealing in a way that most “simple” (and easily ignored) advice is not.

#2: Jacob “Stocks for the Long Run”

My favorite book for investing/personal finance is “Stocks for the Long Run” by Jeremy Siegel. I consider this my “investing bible.” I may even have a problem because I just realized that I have been sleeping with it no less than 2 feet away from me on the book shelf for the past couple of years! haha

In this book, Siegel and his Wharton research team explore pretty much every question you have or could ever wonder about regarding long-term investing in stock, bonds, and cash-based securities.

The book is divided in to five parts.

In part 1, Siegel examines historical data to determine what trends are present to discriminate how the equity and fixed income markets function. In part 2, the research team analyzes different techniques to value securities and to predict the future returns investors can hope to obtain. Unfortunately for us, their findings indicate that future returns will be significantly lower due to the bleak outlook of dividends.

In part 3, which is in my opinion, one of the most interesting sections of the book, Siegel analyzes how stocks and bonds have performed during specific periods in history. For example, he analyzed performance during the Sept. 11, 2001 disaster, during wars, and how they have performed when Republicans vs. Democrats are President of the United States.

Part 4 of the book explores various short-term periods in history in an attempt to discern whether or not patterns are present which can be exploited to profit when incorporated in to one’s investment strategy. Unfortunately, there is no short-term fluctuation that can reliably beat the market averages.

The final section of the book, Part 5, is my favorite portion because it basically summarizes how all of the evidence he presented in the previous Parts can be used to create an intelligent investment strategy.

One thing that I think could be improved upon in this book is to add additional detail showing example portfolios of how asset allocation should change throughout one’s life.

However, for the most part, if you are wondering anything about stocks, bonds, or any security for that matter, this is the book to go to!

#3 Mark: “The Intelligent Investor”

My favorite book on finance hands down is, The Intelligent Investor by Benjamin Graham. Graham is one of the greatest investors that ever lived and shares his strategy for selecting investment opportunities. Graham is widely regarded as the father of value investing and has mentored numerous successful investors. Warren Buffett calls, The Intelligent Investor, “by far the best book ever written on investing”.

Graham gives specific criteria on what to look for when investing and explains how to properly value a stock. This is not a get rich quick book. Graham’s primary focus is the preservation of capital and secondarily to earn an adequate return. He introduces investors to a fictional character known as Mr. Market. Everyday Mr. Market knocks at your door and makes you an offer for your investments. The offer should only be accepted when you feel that your investment has reached its true value.

Graham breaks investors into two distinct classes. There is the enterprising investor and the defensive investor. The enterprising investor is willing to take on additional risk whereas the defensive investor is much more risk averse. The book teaches how to take advantage of market inefficiencies and buy securities that are trading below their true value.

I like the fact that Graham gives investors specific criteria to look for when investing. He explains the importance of ignoring the day to day irrational behavior of the stock market and focusing on the fundamentals of investing. The Intelligent Investor was published in 1949 and is still a classic to this day.

So, What Do You Think?

Do you agree with the results? Leave a comment and let us know!

It’s been very educational. I thank everyone who participated!

It’s been a month of great reader submitted personal finance book reviews! Today is the last day for entries. Tomorrow I’ll be asking the judges to go through the list and let me know their favorites. So submit your review today!

For what it’s worth, I’ve created a small spreadsheet for tracking savings goals. If you type in your savings info and the goals you’re trying to hit, it will tell you if you’re on track or behind. This is mainly useful if you have a few goals, but it also helps you keep track of your progress.

Here’s how to use it:

1. Edit the amount saved. This should be the amount you have saved to date.
2. Edit the Amount Allocated. This should be any amount you don’t want applied to your goals. For instance, if you know you’re going to buy shoes next week and you don’t want to trick yourself into thinking that you’re doing $100 better on your goals than you really are.
3. Edit the goals I have as templates. Change the “Goal”, “How Much”, “Start Date”, “Target Date” and the rest will be calculated for you.
4. If you need to add a goal, right click on the left side of the screen where you see the number 7. That will select the entire row and give you a popup menu. Select “insert”. BAM! You’ve got a new row. Fill in the same stuff you filled in for step 3.

The spreadsheet takes todays date and figures out how much money you should have saved to meet your goal.

If you don’t have enough, either save more or push the start and target dates out a few weeks.

You may have found yourself wondering why I’m so pumped up about cash flow forecasting. Good. I’m glad you’re wondering. It will make this explanation less random.

Back in the day, I used Quicken to track my finances. I would be good about it and then start getting worse and worse about it. Eventually I would realize it had been months and I would start again. Over the years, I’ve come to hate Quicken. There are so many bugs. Too many oddities and frankly, I just don’t get the point.

How do I Know if I Have Enough Money

What I really wanted to know was whether or not I was going to overdraw my account. It had happened enough times just because I forgot that I planned on paying some bill or because I had a future obligation that I had no means of capturing. One day, while lamenting the fact that I was still using Quicken, I found lo-and-behold! A cashflow forecast! It was AWESOME! It took into account all of my future bills and my current balance and showed me where my balance would be or when I would next overdraw my account. This was priceless.

Image via MoneyMusings.com

Why Not Buy Quicken Then?

Because it sucks! I already told you that  Here’s the thing(s):

1. Quicken, Mint and products like them are fine for some things. Like downloading your transactions.
2. I have never been able to get one of these products to categories my transactions properly. This ends up taking many of my hours and causing tons of frustration.
3. I believe in separating personal spending from mandatory spending through the use of separate accounts.
4. For multiple accounts, these tools seem to fall apart. They combine all of the income and expenses and are simply wrong. Hence, why they suck.

I’m sure I could find a million reasons why Quicken and Mint suck. Which reminds me. If you don’t believe that cash flow forecasting is amazing, check out how many people have requested cash flow forecasting on Mint. Once you use it, you instantly realize what the problem was all of these years. It’s not you, it’s the method by which you budget.

By the way, if you don’t know about my project to create a simple and wonderful method of budgeting through the use of cash flow forecasting, check out some details here.