The predominant investing mantra nowadays is to pick some nice index funds and stick with them, since you can’t know when the market is going to go up or down. In this appropriately titled book Yes, You Can Time The Market!, Ben Stein and Phil DeMuth argue against that. Instead of using fundamental valuation, where someone tries to analyze a company and find it’s “true” value vs. market value, they argue that a market index as a whole, such as the S&P 500, can be viewed as cheap or expensive by comparing it against it’s 15-year moving historical average.

For example, you can take the average of the P/E ratio of the S&P 500 for the last 15 years. If the current P/E ratio is greater than that average, then it is overvalued. If the current P/E ratio is less, then it is undervalued, a signal to buy. (Right now it’s 25 vs. 19, undervalued.)
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The Number by Lee Eisenberg was generously provided to me by the book’s publisher. It sounded neat, so I agreed to read it and review it.

The Number, as you may have guessed, stands for the specific amount of money that people have in their mind that they need to retire on. For example, a person may say “Once I get $1 million saved up, that’s it. I’m off to the golf course forever.” You may think, as I did, that this book is about how to deduce your Number and how to invest to achieve it. We’d both be wrong. I kept reading and reading, looking for financial enlightenment, only to be left wanting.

Don’t get me wrong, Mr. Eisenberg is a very talented guy – his writing is funny, witty, and easy to read. In fact, he is a past editor of Esquire magazine. I’m sure he’s very wealthy too, given his resume.

However, the majority of his book is to put it bluntly, fluff. Not that fluff is necessarily bad, I just mean that it’s more entertainment than substance. He talks about how Americans are too consumerized, how they have “Debt Warp” from borrowing so much, and so on. He has clever little stories about friends, and some good advice about being wary of many financial salesmen/advisors. I did enjoy the brief history of how the idea of retirement evolved over time.

Another thing that led me not to love this book is that the target audience seems to be affluent 40-somethings who want to retire soon. He talks about wanting to get that 2nd house in Vail, or upping your “Number” from $5 million to $10 million when your hedge fund does well. I didn’t feel like he was talking to me, as a guy in his 20s whose doesn’t even have his first house yet.

I think the best way to describe this book is that it’s for all those people who want to have a lively discussion about retirement, but have nobody to talk about it with. If you’re in your late 40s and worrying about early retirement, this book is for you. If you are in your late 40s and worrying about making your next mortgage payment, skip it. For a taste of what this book is about check out Lee’s article in New York Magazine “Nailing Your New York Number”.

Overall Rating: (ratings explained)

Other Blog Reviews (e-mail me if I missed yours)
FreeMoneyFinance’s Review
AllThingsFinancial’s Review

The Number Giveaway!
Decide for yourself! As promised, since I got this book for free, so can you! Just leave a comment with your e-mail for your chance at getting The Number shipped to you for free.

* Fine print: One entry per person. You can leave multiple comments with the same e-mail, I’ll just enter you once. I’ll pick randomly. Giveaway ends 1 week after this is posted. You must leave your e-mail so I can contact you (you can stop it from showing online by typing something in the URL form). Book will be sent via Media Mail free of charge. U.S. Residents only for this one, sorry. Your personal information will not be shared or sold as per my privacy policy.

Some of you may have noticed that several blogs are reviewing the same books at the same time. No, we have not joined some Oprah book club. We are getting these books for free from the publisher’s PR firms. Does this mean you’ll get biased reviews? Nah. I’ve never gotten anything but a free book, which I hope is not enough to swing anyone. I’m pretty sure all those movie critics get to see movies for free too. Now, if they offered free trips to Hawaii…

My new bright idea is to give away every book I get for free to a reader. The only book I’ve gotten for free from the publisher so far is Free Gulliver – Six Swift Lessons in Life Planning. So just leave a comment with your e-mail if you want a chance at my copy of Free Gulliver sent to you for free! And be on the lookout for more free books!
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I’ve got several book reviews I plan to post up soon, so I’ve been feeling the need to come up with some sort of book rating system. I tried to think of something creative, but I stuck to a boring but simple 4-star system.

– Disappointing, don’t bother reading it.
– Some useful info, but not really worth the time reading it.
– The time and money spent reading it was worth it.
– I would recommend everyone to read this book, it is a permanent part of my library.

Please remember that all these reviews are my own personal opinion. I don’t expect everyone else to agree. I have my biases, which if you read my blog you’ll know. Anyhow, here are my retroactive ratings for previously reviewed books (click for my more detailed review):
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Like I’ve mentioned, I’m a bit weary of personal finance/retirement books at the moment, and more in the business ideas mood. So when I came across this book I had to read it. Titled The eBay Millionare: Titanium PowerSeller Secrets for Building a Big Online Business, it profiles 25 of the biggest sellers on eBay. Titanium Powersellers are those than have more than $150,000 in gross sales each month (Example: GlacierBayDVD). Umm… I was a Silver Powerseller for about 3 months ($3k/mo)… As you can imagine, these guys are not just cleaning out their garages. They have 10,000 square foot warehouses, several employees, and multiple suppliers. But they virtually all started out with just one or two people and an idea.
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I grew weary of my real estate textbook, so I picked up Freakonomics at the obligatory overpriced airport bookstore. You may have heard of this book as the one that suggests that the legalization of abortion is the main cause of recent decreases in violent crime. In short, this books tries to apply the math of economics to issues like crime, cheating, and parenting. It’s is co-written by an Economics Ph.D., and a New York Times writer. The NYT writer imparts a very strong “dumbed-down” flavor to the book, and as such the book reads like a newspaper article with a lot of sensationalization.

Still, the book was a fast read and mostly entertaining. It boils down economics to it’s basic idea: what do people do to get what they want? But it goes beyond supply and demand. For example, the book talks about real estate agents. It’s commonly known that the commission on a house is 6%. So on a $300,000 house that’d be $18,000. Sounds like a lot of money right? You’d think it would be a good incentive for your agent to sell your house for as much as possible. But wait.
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First, let me say that I used to find the Suze Orman Show really annoying. I guess the main thing was her habit of asking a question, and then say “Now, you say XXX, but what you REALLY mean is XXX? Now let me guess, your husband/wife/lover actually does XXX”. Inevitably, the caller agrees with her, calls her a genius, and promises to do better. Yay Suze.

So, it took me a while to want to read The Money Book for the Young, Fabulous & Broke. Actually, it took the library a while to lend me this book. I was like #88 on the waiting list or something. Then two weeks ago I was notified that it was being held for me. Yay for libraries with online hold systems.
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I’ve been putting off reading Automatic Millionaire by David Bach, mainly because I wouldn’t have gotten it unless it was free since it struck me as a pretty simplified investment book. I wasn’t wrong. It’s pretty fluffy. That isn’t to say it’s not right for anyone, I just don’t think I was the target audience.

The basic premise is as I predicted: Pay yourself first (say, 10%), automatically. Do this via automatic payroll deductions for 401ks, IRAs, or regular taxable savings account, before you even get your paycheck. The idea is that you won’t be able to spend what you don’t get, and it’s too much trouble (or you’re too lazy) to write a check or make a transfer every month to a savings account. Okay. Fine. This is probably true for many people. So how is this book 200+ pages long?

The rest of the book applies the “Make it Automatic(tm)” mantra to building your emergency funds account, home ownership, paying down credit card debt, even charity. Mr. Bach also writes pretty smoothly, and has a very energetic and motiviational writing style. I suspect this is the reason why he sells so many books.

Also, there is a sprinkling of pretty simply investment data and information. For example, if you saved $5 a day, or $150 a month, every month, for 40 years and assume a (generous) 10% annual return, you’ll have almost a million bucks ($948,611 to be exact). It also has some very general suggestions about asset allocation. Don’t get this book for investment specifics!

I do like that the book is modern in that it refers readers to many different companies and websites that can actually help them accomplish these goals, such as Capital One 360, Ameritrade, TD Waterhouse (also Ameritrade now), Vanguard, and ShareBuilder.

Overall, this book is a mix of Richest Man in Babylon (due it’s save 10% of your money first before doing anything else) and Rich Dad, Poor Dad (inspirational words). If you don’t have an IRA, or don’t have a 401k, read this book. Otherwise, read this book – in Barnes or Borders as Jim suggests in his review.

At first, this book sounded like another Rich Dad Poor Dad-style vague-finance-tips-rehash. But as I read more about it, it really intrigued me. As is mentioned directly in the title, Free Gulliver by Tripp Friedler is more life planning than necessarily financial planning. There is very little emphasis on how much you need to retire, or exactly what you should invest in. In fact, instead of trying to scare you into saving by talking about how destitute you might be when you retire, he suggests that if you are truly happy in what you are doing – why retire? I guess this is to suggest that some people are suffering and stressing out too much now, simply in order to retire to some magical place sometime in the future.
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Ok, so The Informed Investor by Frank Armstrong III has been sitting on my nightstand, often being overlooked for my Car & Driver magazine for a couple months now. Not because it is a bad book, but mostly because all the money I plan on investing for now in stocks and bonds is already invested, and because the book covers a lot of stuff that I’ve already read about in books like The Four Pillars of Investing and A Random Walk Down Walk Street. Accordingly, this book is aimed at the general non-financial public who is wondering on how to invest their retirement money.
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I wasn’t the biggest fan of Rich Dad, Poor Dad, but I still decided to read this book, Rich Dad’s Guide to Investing by Robert Kiyosaki, for a couple of reasons. First, I have some friends that are real Rich Dad proponents and have bought their Cashflow 101 board game and actually own investment property now. Second, it was available at the library so I didn’t have to buy it. Rich Dad’s Guide to Investing is actually the third book in the series, Cashflow Quadrant was the second. But that was checked out, so oh well, maybe next time.
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I’ve heard a lot of people recommending this book, so I picked up a copy of The Richest Man in Babylon by George S. Clason at the library. It’s been out a while, so chances are there is a copy out there, or try getting a copy used. The book is compact, and my edition was only 144 pages long.

Overall, the book was more inspirational than educational, much in the same vein as Rich Dad, Poor Dad. It is told as a set of Babylonian short stories, with Old English writing style including phrases like “Which desirest thou the most?”. Truth be told, it got a bit annoying after a while. However, there were some good rules set out in the book, which include “start thy purse to fattening”, “control thy expenditures”, “make thy gold multiply”, and “make thy dwelling a profitable investment”.
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