Another book review.  This time I’m reviewing Personal Finance for Dummies by Eric Tyson!  Everyone loves his books and they super simple to read, yet easy to understand books about personal finance.  This particular book is HUGE and very long.  So I won’t be able to get into everything.  There are 6 parts to the book and 22 chapters.  So I think I’ll review the parts of give a brief overview.  Again I will be giving away the book, drawing next Wednesday 10/22/08 10 pm. I will announce the winner next Thursday as I review and give away another book.  But onto the review.

Part I: Assessing your Fitness and Setting Goals

This part of the books spends 4 chapters looking at your finances.  The first chapter talks about improving your financial literacy.  It suggests doing research about personal finances because most people are not taught it at home or at school. Chapter 2 deals with measuring your financial health.  This chapter has worksheets you can use to determine your net worth.  It explains to you about FICO and what your score might mean.  It also discusses different types of debt.  Chapter 3 focuses on determining where your money goes. The chapter helps people analyze their spending and start developing a budget and spending plan.  The fourth chapter works on establishing and achieving your financial goals.

Part II: Saving More, Spending Less

This part encompasses chapters 5-7.  Chapter 5 focuses on dealing with debt.  What the chapter talks about is how to deal with debt.  Do you use savings or cut up your credit cards.  Should you file bankruptcy?  Chapter 6 looks at reducing your spending.  Many times people in debt have excessive spending rather than limited incomes.  So this chapter examines all potential “luxury” categories most people have in their budgets.  Finally chapter 7 talks about taxes.  It gets into depth about how to calculate your taxes, how to itemize, and how to reduce your taxes.

Part III: Building Wealth and Wise Investing

This part has chapters 8-14 included.  In Chapter 8 gives people the basics of investing.  It explains what stocks and bonds are and how risky they are.  It talks about what diversification means, and how it’s achieved.  In Chapter 9, it’s a very short chapter talking more in depth about stocks and bonds.  It gets a little into investments like precious metals, annuities (bad idea in most cases), and collectibles.  Chapter 10 gets into mutual funds. I think this is the must read chapter of this section.  Many people understand what a mutual fund is, but get confused about the different types of funds and how much they cost.  This chapter really breaks it down simply.  Chapter 11 focuses on retirement investing in retirement accounts.  Chapter 12 discusses investing in taxable accounts.  It explains investing in the short versus long term.  Chapter 13 focuses on investing for education mainly college.  It explains how your assets are weighted in determining financial aid for your children.  Chapter 14 looks at investing in real estate.  It really goes into depth at about financing your home and potentially rental properties.

Part IV: Insurance - Protecting what you’ve got

This part covered only 3 chapters 15-17.  Chapter 15 started off with the basics of what type of insurances you might need. It talked about how to shop around for insurance.  Chapter 16 focused more specifically on the different types of insurance like life, health, disbility insurance.  It went on to explain why disability insurance is important. Finally chapter 17 focused on insuring things you own like your house, car, and umbrella insurance. I particularly liked the explanation of Umbrella insurance as insuring your assets above your normal coverage because lawsuits are expensive.

Part V: Where to go for more Help

This part covers chapters 18-20.  Chapter 18 talks about working with financial planners. It lays out options for doing it yourself or with a planner. It explains what to look for in a good planner and how to recognize conflicts of interest.  It also gives you a rundown of how to interview a planner and specific questions to ask.  A must read if you are going to seek advice.  Chapter 19 discusses computer money management. It looks at using the internet to budget, set up wills, researching investments, etc.  It really points you in the right direction for doing it yourself on the internet.  In Chapter 20 the book focuses on the media and our finances. It discusses the role of the media to inform or alarm us.  And the chapter ends with a list of books the author reccomends reading.

Part VI: The Part of Tens

The last part of the book wraps up with a survival guide to life changes.  It lists things like your first job, buying a new car, home, getting married, having a child, starting a business, and death.  It’s very well written and really gets you thinking.  The last chapter of the book talks about identity theft and fraud.  Of course it had to be included because the reality is that in this technological age we’re able to rapidly lose our identity.

Anyway I thought this a very dense but well written book. It is very simply written and would really be great for personal finance beginners or newbies.  This is not an over the top or in depth discussion about investing and financially planning, but would a book to buy to get started.

Leave a comment for a chance to win!  Drawing next Wednesday night!