Customer Reviews

The New Rules of Money: 88 Strategies for Financial Success Today

5 star:		(12)
4 star:		(8)
3 star:		(3)
2 star:		(4)
1 star:		(12)

 

 

I bought this book because the hard back version was on the clearance shelf of my local bookstore for only $3.99. After reading it, I discovered why the book was so cheap. It appears that Edelman did not write this book because he cares about consumers/investors, he wrote it for the sole purpose of filling his own pockets with extra change. Mr. Edelman's inability to get his facts straight is blatantly visible throughout the book. For example, Edelman states that the Vanguard 500 Index fund did not exist 10 years prior to the publication of his book (published in 1998). But as a Vanguard investor I can tell you that the inception of the 500 Index fund was on August 31, 1976. He also tells readers to avoid inflation-indexed bonds, claiming that people only buy them hoping that inflation will rise so their bond values will jump. This is nonsense (please don't insult my intelligence Ric). People purchase these bonds as a small conservative part of their portfolio to provide protection against the investments (equities, high-yield bonds, etc.) that decrease in value during times of inflation. Lastly, Edelman completely trashes the Roth IRA. Although the type of IRA that one chooses depends on many factors such as age, income, tax bracket, and expected age of retirement, the Roth IRA is a wonderful choice for many (if not most) young investors. No taxes on accumlated earnings is usually more beneficial than no taxes on contributions (you can figure out the math for your own situation using an IRA calculator). Edelman distorts the facts in order to scare people and sell his book (shock grabs attention and sells a product). There are many other examples throughout his book of half-truths and misrepresentations, but since I am limited to 1,000 words here I cannot name them all. In conclusion, I must say that I do pity the novice investor who chooses this as an introduction to the financial world and heeds Edelman's advice as golden.

Ric Edelman may tell you a few things you don't agree with or don't coincide with other so called "experts" who write financial books, but, how are you doing financially? How much money have you lost in the market following their "expert" advice?

I know I got smacked following a certain East Coast female author and got back on track with "What You Need To Do Now" and Ordinary People, Extraordinary Wealth." I have just strated to read this book along with "Discover the Wealth Within You."

I also recommend Suze Ormans excellent books "The Road to Wealth" and "The Laws of Money" to get you on the fact track to financial success.

A lot of what Ric teaches is different and controversial but the bottom line is, it works.

This book is an excellent "eye opener" to the world of personal finance. The truth is that money doesn't come withan instruction book and when it comes to money, nobody is your friend. The people we typically get advice from have their hands in our pockets; brokers, bank loan officers, financial planners, auto and life insurance salespeople, car sales people etc., etc. This book and The Truth About Money will wet your appetite for more. For actual techniques, I highly recommend "More Wealth without Risk" and "Financial Self Defense" by the late great Charles J. Givens. "Millionaire Next Door" is also a great work, although like Edelmans books, a little lacking on the "what" and the "how"

I shouldn't be surprised that there are a lot of negative reviews. Personal finance is exactly that....personal...and with the personal factor involved people will have different ideas about what they like and don't like, etc. I think the thing that gets overlooked about the ideas Edelman shares in this book and his others is that if you want an index fund or a short mortgage, you can still do that. I don't think the effectiveness of the kinds of techniques and ideas Ric promotes should immediately be shot down just because you like index funds and he doesn't. Are you going to shun dollar cost averaging your index fund as well, because Ric hates index funds and likes DCA? Well, now you're just being silly.

That's why I think this is an extremely valuable book. No matter what you want to do with your own finances, there is something here to help you. Maybe you don't like his approach to investing, but you may find his ideas on saving for college indispensible. Maybe you're just curious about what a municipal bond is, or how it behaves. It's an extremely malleable approach to personal finance. It's more goal-oriented than return-oriented. It focuses on the long term, regular joe investor, not the day trader.

And one last thing about the author. I don't know if any of the other reviewers live in the DC area and get the oppotunity to listen to Ric's radio show, but Ric is very fair-minded about how he presents his financial planning firm. He repeatedly advocates shopping around for the firm that can help you best, and certainly doesn't think that he is the only game in town. He brags about his achievements and the success of his firm, but so what? Wouldn't you rather take advice from a guy widely recognized as top-notch in the industry?

As a young, beginning investor, I have been educating myself about investments, savings, etc. With that in mind, I have been avariciously reading almost all the investment books I can find. Edelman's book first brought to my mind a concern about index funds, because every other academic book I've read supports them. I think Edelman has an axe to grind, being an personal finance manager and simply put, to Edelman, Index funds are the anti-christ and must be eliminated. However, his logic does not make sense, nor do his facts and figures hold up. The index funds simply mirror the market, and this they have done very well. He neglects to go into their low fees, and also he does not address the issue of survivorship of mutual funds, that is, that the current data that is published includes only those funds that survive so they are naturally better. Poor funds are simply eliminated or absorbed into other funds.

His comments on mortgages I found interesting, but consider that if you are getting a 10% return on an investment versus an 8% mortgage, that might make sense, but to get %10 you are going to have to invest in something risky (stocks). Can we reasonably assume that 10% is a good reasonable return? I don't think so.

So in sum, the work is biased toward moving money to professional managers while at the same time providing us with statements that are not well thought out. Better books I'd recommend are Malkiel's 'A Random Walk Down Wall Street' and Bernstein's 'The Four Pillars of Investing.'

Boy am I relieved. I can now keep my $5/hour job and retire rich because of my 401(k) plan! As if his last book wasn't rubbish, in this one, Edelman actually recommends not improving your employment situation simply because you might be prevented from investing in a retirement plan for a short period of time. No thanks. I've already invested in 6 years of college and I make 4 times what I did before. I'll make up that loss in a few years and have a nice lifestyle in the process. Besides, he assumes that those who change jobs don't invest in other investments.

Making poor assumptions and failing to consider the complete picture, Edelman once again confuses what should be clear in the world of financial planning. Written on his three-week-at-the-beach vacation, this book is worth just about what you'd expect from so little thought and preparation.

Abraham Lincoln once said "It is better to remain silent and be thought a fool than to speak and remove all doubt." I'll let it go at that.

Some of the better books out there are: "Making the Most of Your Money" by Jane Bryant Quinn, "Die Broke: A Radical 4-Part Personal Finance Plan" by Pollan and Levine, "The Millionaire Next Door" by Stanley and Danko, and "A Random Walk Down Wall Street" by Burton Malkiel. Those should keep you busy for a while.

The good part: This book will open your eyes. Many contrarian (opposite most popular radio gurus) views, some of which are shocking - avoiding dogs of the dow and index funds. His arguements are compelling but not quite enough to make you dump your index funds. However, most of his ideas and insights are well-argued and will really open your eyes. It's easy to read and you'll enjoy it. One minor flaw - the over-use of footnotes - there are so many it's distracting and most are not needed. One major flaw, the book is full of "what not to do", but when it comes to asset allocation, the categories are mentioned - but nothing is said (it would take 1 page max.) about the *ratio* of assets. The reason for this is clear, he wants the reader to use (pay for) a financial planner, like the author. Going into such details except for the *core* of finance makes my rating of the book an 8 rather than a 10. However, I already purchased his other book here, as he is a good author.

More than anything Mr. Edelman is a good salesman. His books are a soft sell of his investment services firm. I enjoyed reading his take on real estate investment and of course he thinks more highly of stocks and bonds. (Duh, what service does he sell?) The book's reference guide style is Ok although some readers may not like it. It was worth checking it out from the library but it's not an investment bible and there's no need to buy it.

Like Ordinary People, Estraordinary Wealth and Discover the Wealth Within You, Rc Edelman challenges common dogma (and ignorance) and puts a breath of fresh air on personal finance.The argument on having a paid off home or keeping a mortgage is much like the buy term insurance and invest the difference that started in the 70's with Art Williams. You are better off carrying a.mortgage and investing the difference. A good mutual fund will grow at 20%-25% per year which in 4 years means your money doubles. I don't know of houses that double every four years. A paid off mortgage is like money in a shoe box, it makes you feel good, but does you no good.Controversial, you bet. Does it work, absolutely.

No doubt that Edelman is a very controversial guy--just check out these reviews. However, Edelman is also very knowledgeable and very accurate. He accurately called the Index Fund fallout as early as 1998. HE WAS WIDELY CRITICIZED FOR THAT. But as someone who listened to him, I am glad he was so perceptive!Likewise, Edelman suggests to carry a mortgage vs having a paid off mortgage and invest the difference. As another astute reviewer commented, this is a lot like the old term vs cash value life insurance debate. Which is better?Cash value is generally the better value for the insurance salesman. Likewise, a paid off mortgage is not doing you any good because it is a liability and provides no income. Better to put that extra mortgage moneyin good investments that can grow 20%-25% per year.Edelman may be controversial but his advice is right on.