Pound Foolish by Helaine Olen

Read: 26 December, 2013

If you’ve been reading along for a while, you’ll know that I went through a spat of reading personal finance books in 2009 (and even read Kiyosaki’s Rich Dad, Poor Dad, which Olen specifically addresses in Pound Foolish). At the time, I had just started working after living on a single income for several years while a student. Our goal was to keep living on as close to a single income as possible, putting the second income away for rainy days. But, of course, we were young and didn’t quite know how to make that work, so I toured the personal finance section of my library.

I did learn quite a bit about how to make and maintain a budget, and I like the idea of the envelope system even if we’ve never found a way to make it work for us. But other than that, I didn’t see much value in the books I read. The advice often seemed to ride on things that just didn’t make much sense – like Kiyosaki’s advice to buy real estate (which read like comedy given that the real estate bubble had just burst), or the assumption of at least an 8-12% rate of return on investments (I have never in my adult life seen a consistent return higher than 2% and even that much is rare), or the requirement that housing take up no more than 30% of your household income (puh-lease, a cardboard box would cost me more than that around here!), the books just seemed to make an awful lot of assumptions that simply would not apply to what I would imagine are the vast majority of their audience.

What’s left, the good advice like “spend less than you earn!”, is common sense. People who are reading personal finance books (and therefore care about personal finance) are already trying to do just that. What they want to know is not the goal, which they already have, but the steps for achieving it despite having unexpected expenses like medical bills, or despite the loss of income due to a crappy economy. And for that, personal finance offers no solutions. What stabilized my household’s livelihood was not my budgeting, but rather the recent Canadian minimum wage increase.

And that is essentially Olen’s thesis. The personal finance gurus (nearly all of whom make their money by selling their advice, not following it) shift the burden of managing on the individual, when many (of not most) of the difficulty the individual is having comes, ultimately, from social issues – such as the state of the economy, lack of regulation in the financial sector, lack of social support after a job loss, or medical expenses.

Olen’s book is damning, and depressing. There’s no uplifting message, no sign that things are changing. It just goes on and on pointing out how various ways that predators have found to feed off the public. It’s a hard book to read, and it had me taking a good second look at how I’ve allowed my finances to be managed (though, silver linings, it has prompted me to make some significant changes in that area that I’m hoping will at least minimize risk).

It’s also a call to action. Instead of talking about personal finance, we need to talk about social finance. We need to talk about regulation.

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Your Money or Your Life by Joe Dominguez & Vicki Robin

Read: 2 September, 2009

Your Money or Your Life is one part financial advice, two parts general life advice. The nine steps of the “program” are designed to help the reader think about their values and align their life so that there is as little that contradicts those values as possible. That these steps also help the reader get their finances in order, cut down on living expenses, and, eventually, become financially independent is almost incidental.

In following the steps and, according to the authors, learning to live (to truly enjoy being alive and filling the day with meaning as opposed to obsessing over how to get money, how to spend money, and how to pay the bills), the reader may also have more money available. Rather than ‘your money or your life,’ the end lesson of the book is ‘your life and the money that facilitates its living.’

Whatever small flaws this book may have (the assumption that the reader is religions and American, some repetitive passages, the occasional Nervous Nelly advice), it more than makes up for by being among the first logically sound, no-nonsense, ‘this won’t be easy and the onus is on you to make it work’ self-help book I’ve ever read.

While my family benefited little from the financial advice (nearly all the tips are things that we already do), I found the general life advice to be very thought-provoking. My husband and I have been inspired to re-evaluate our values and goals. In other words, there is something in this for everyone – even those who are not in debt and relatively financially secure. It would not be an overstatement for me to say that everyone, regardless of age and financial situation, should read this book at least once and, preferably, going through the first four steps.

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Rich Dad, Poor Dad by Robert Kiyosaki

Read: 26 August, 2009

Given all the positive reviews that Rich Dad, Poor Dad has received, I had high hopes. Unfortunately, this was a fairly large disappointment.

Rich Dad is incredible repetitive – not only in terms of content, but also in the actual words used. For example, compare this passage on page 59: “In fact, if you really want to be confused, look up the words “asset” and “liability” in the dictionary. I know the definition may sound good to a trained accountant, but for the average person it makes no sense.” to this passage on page 61: “If you want a lesson in confusion, simply look up the words “asset” and “liability” in the dictionary. Now it may make sense to trained accountants, but to the average person, it may as well be written in Mandarin.” For all Kiyosaki’s talk of spending big bucks to hire smart professionals, he doesn’t seem to have felt that this applies to editors as well.

The book itself is short, but should have been much shorted. The first half is devoted to a sermon about how poor dads tell their kids to do well in school so that they can get a good job while rich dads tell their kids to learn to make money work for them instead of working for money. That’s it, the first half. Once the actual meat of the book starts, at least the content is somewhat interesting (thought the writing style is as awkward and repetitive as ever). I hesitate to assume devious motives, but I wonder if the lack of content was a deliberate move to allow Kiyosaki to write several books instead of only getting royalties for one.

That a self-help book is lacking in content and practical ideas comes as no surprise. However, Rich Dad also failed to be inspiring. I don’t think that this book would be a worthwhile read for anyone, especially since all the advice he gives is available in better-written form for free on the internet.

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