Book Review: The Money Book for the Young, Fabulous and Broke


Hello and welcome to my first book review.  I love reading, and over the past year or so, my tastes have definitely been turning towards personal finance.  I’ve decided to start sharing some of my favorite (and perhaps, least favorite) books through my blog, with the hope of inspiring and educating my readers, as well as allowing me to geek out even more than normal.

The first book I’m going to review is The Money Book for the Young, Fabulous & Broke by Suze Orman.  (Which we’ll call YF&B for the rest of this article, following the lead of the book itself.)  Ms. Orman is probably best known for the over-the-top persona she displays on her weekly CNBC program, but she also has penned a number of general investing books.  This one happens to targeted to people in their teens to mid-twenties, an age group I happen to fall into (although, not for too much longer).  How much good advice does it have to share?  Let’s find out.

Synopsis:

YF&B is designed to be a complete, all in one guide to almost any financial issue that should arise in a young person’s life.  Each of the chapters covers a different aspect of personal finance, from finding out and improving your FICO score (a popular topic for Ms. Orman, here and elsewhere) to investing for retirement or saving to buy a house.  The chapters are arranged with a textbook explanation of the topic to start, followed by a number of questions a young person might have about the topic; the presentation gives the impression of a class lecture followed by a period where Professor Orman takes questions.

Pros:

Very Thorough: YF&B does a good job of touching upon almost every financial topic that a young person could face, from paying off student loans to combining your finances with a significant other.  The opening section of each chapter does a good job of explaining the information in some detail.  (For example, the chapter on retirement investing covers the difference between Roth and traditional IRAs, notes the power of compound interest, and stresses getting any matching funds when investing in your 401(k).)  The questions that follow do address some of the concerns that young people might have about investing or paying down debt, and sound as if they could have come from young callers on her show.  The answers help to round out the information, as well as potentially answer the questions her readers would have.

-Appropriate Information: The content in YF&B is right on topic; if you are in the target age bracket, the book has a great deal of good information pointed towards you.  There are specific suggestions as to a good investment mix (85% US Total Market, 15% Total Foreign Market, all stocks) for this point in your life.  There’s also commentary about needing to save up to pay for a house down payment before maxing out your retirement funds if you want to own a place of your own, a suggestion I hadn’t seen in any other financial planning book, but one very appropriate for people in my age bracket.

-Easy to Follow: This is not a dense tome filled with incomprehensible jargon; the important terms are explained in the chapters themselves, and there is a glossary containing almost all of the technical terms used in the book, as well as a brief bit of advice about each from Ms. Orman.  It provides an introduction for young readers into many aspects of personal finances and related topics.

Cons:

-Not Very Deep: As you might expect with a book that covers almost every financial topic and isn’t over one thousand pages long, Ms. Orman does not go very deeply into any of the topics.  If you need a hand-holding walk-through on how to start investing or what is involved in buying a house, you’ll need to look elsewhere.

-Not For The Over-Thirty Crowd: With a title that emphasizes Young, it should be pretty obvious that this isn’t going to be a good book if you’re about to retire.  In fact, if you were born before Reagan was inaugurated, there’s a good chance that most of the information contained within will not be very helpful to you.  Furthermore, if you’ve done much other personal finance reading, most of what you will find in YF&B will sound awfully familiar; most of the general information covered here is also covered in many entry level personal finance books.

It’s Suze Orman: Most people either love or hate Ms. Orman’s approach to personal finance.  While the book is rather more subdued than she tends to be on her CNBC program, her personality does come through, and can be a bit of a turn off.  She writes in a very decisive, ‘my-way-or-the-highway’ fashion, which might not be agreeable if you are used to PF writers who attempt to cover every angle and possible debate.  Be aware of this going in, and you should be alright.

Overall:

The Money Book for the Young, Fabulous & Broke is a pretty solid introduction to a number of important financial concepts.  It’s worth a read-through if you are under the age of thirty, especially if you haven’t had much exposure to personal finance planning.  It’s a good introduction to many of the considerations you will have to make right after college, and provides decent exposure without being overwhelming.  It’s a definite buy for teens or people in their twenties.

Above the age of thirty, the book loses some value; while many of the points, like advice on paying off credit card debt and financing a car, could be valuable at any age, much of the information is pointed squarely at younger people and might be inappropriate or downright wrong for older readers (such as the recommended investment holdings mentioned above).  For anyone over thirty,  consider borrowing the book, if possible, or simply getting an investment book more appropriate for your age cohort.

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