Book Review: Ordinary People, Extraordinary Wealth

Ordinary People, Extraordinary Wealth by Ric Edelman
This book is a good example of why most people don’t become wealthy — because they read and believe financial books like this. The author is a financial adviser who claims to have interviewed his successful clients and then reported in this book their comments about money. Clearly the results are cherry picked. If you followed the advice in this book, you would not spend more than a few hours a month on your finances and you would turn all of your money over to a financial adviser, perhaps even Mr. Edelman. The whole book is basically one big sales brochure for the author’s firm.

A much better book to read is the Millionaire Next Door, which was written by a couple of university professors who study the affluent for a living. Since they are familiar with commonly accepted research methodologies, the advice in the MND book is much more specific and research oriented rather than anecdotal. It is also less biased since the authors of MND are not investment advisers.

Interestingly, in the MND the authors found that most millionaires make their own investment decisions and spend a fair bit of time budgeting and managing their money, which seems to make a lot of sense and directly contradicts the anecdotal findings reported in the Ordinary People, Extraordinary Wealth book.

For a good book to read on specific investing strategies on how to really get wealthy, I also recommend All About Asset Allocation, by Richard Ferri. This is a good book on how to invest on your own by using no load, index based mutual funds and get better returns than you could by paying most financial advisers.

Book Review: Getting a Life

Getting a Life, by Jacqueline Blix and David Heitmiller.

Your Money or Your Life, by Joe Dominguez and Vicki Robin. I must admit I never read Your Money or Your Life, so maybe Getting a Life is more interesting if you are a YMYL fan. Maybe, but probably not.

I picked up the YMYL book once and thumbed through it, but it seemed to have some rather naive financial advice, so I didn’t buy it. I did buy Getting a Life, but I must confess I did not read all of it. It was just too detailed, way too boring and frankly kind of depressing.

The basic premise of the book is to explain how the authors once were living an upscale, materialistic lifestyle, with high pressure jobs that they did not enjoy. So they chucked the corporate world for a simpler, and apparently more poverty stricken, lifestyle. Personally, I think it is better to have a job that you really like that pays enough to live significantly above the poverty level.

I’m more of a fan of the Millionaire Next Door; a book that describes how many average people got to be millionaires. Basically, they do everything that the people in Getting a Life never figured out how to do. In general, many of the millionaires in TMND book are self-employed at jobs that they love. They also live very frugal lives compared to most people with similar incomes. The authors of Getting a Life seemed to go from one extreme to the other, by first living a consumption oriented lifestyle, and then adopting a lifestyle of “voluntary simplicity”. Blix and Heitmiller claim they enjoy the “control they have over their lives that most American only dream of having someday.” Well, along those lines of thinking, I guess homeless people have a lot of control over their days, too. But if you have a job you love, it doesn’t even seem like work. But personally I’d rather work at a job I love, be able to go out to restaurants on the weekend and not have to shop at garage sales.