Laura Rowley writes about a new book, One Perfect Day: The Selling of the American Wedding, by Rebecca Mead, which exposes the “wedding industry” and the myths of historical precedent the industry invented.

Wall Street Journal Complete Real-Estate Investing Guidebook
David Crook
(9/10)

Occasionally, publicity agents, publishers, or sometimes even authors, send me books with the request that I read and review what they send. That was not the case with this book.

A few months ago, I wrote about the cost of owning a home over 30 years based on information in the Wall Street Journal, and it generated a fairly intense discussion. The data presented show that ownership of your primary home is not a good investment. When people talk about their home appreciation as a function of current market price minus purchase price, they’re forgetting about the thousands of dollars in maintenance, repairs, and upgrades, which in any real investment would be added to the cost basis, reducing their real return.

The author of the article showed, from his own experience as well as extensive external data, that you could easily be $1 million into your home after 30 years.

I took some questions from Consumerism Commentary readers to the article’s author, David Crook, the editor of The Wall Street Journal Sunday. We exchanged emails and I presented a follow-up post outlining a realistic picture of the cost of home improvements. I added Crook’s latest book, Complete Real-Estate Investing Guidebook, to my Amazon wish list so I would remember to look for it while browsing a bookstore some day.

Not much later, a friend of mine (and occasional Consumerism Commentary commenter) who works at Dow Jones presented me with a copy of the book signed by the author. Thanks! Distracted by my move, I have finally finished the book.

David Crook’s Complete Real-Estate Investing Guidebook goes into the kind of detail “gurus” like Robert Kiyosaki make you believe you have to pay thousands of dollars at a seminar to receive. Don’t get me wrong, the book does include a requisite hook: “The 20 Things Every Real-Estate Investor Needs to Know,” but thankfully Crook doesn’t toy around with this concept. Instead there are specific, actionable ideas surrounded by examples and case studies throughout the 241 pages.

There are no get-rich-quick schemes here. Crook routinely warns the reader against promises of no-money-down investments and “something-for-nothing hucksters.” The author’s advice is meant to be taken by a novice investor over a period of time, perhaps up to 12 months or longer just to get started on the first property.

After Crook sets the premise that the house you live in is not an investment for the purpose of income, he goes on to explain how to find the money to get started, emphasizing the importance of leverage. The author presents detailed formulas for evaluating properties in order to find good values in real estate, suggesting that the best purchases would be at a 30% discount from the property’s market value.

A significant chapter is devoted to explaining in detail the tax benefits of real-estate investing. The government in this country starting with the Founding Fathers has always encouraged land development, and this continues to the current day. Here is Crook’s comparison:

A person making a $135,000 salary would probably end up paying $20,000 to $25,000 a year in federal income taxes, plus $7,000 more in Social Security and Medicare taxes. A stock investor earning $135,000 a year in dividends would pay $20,000 a year in taxes. The landlord’s tax bill [on $135,000 rental property income]? About $1,800.

In the next few chapters, David Crook writes about smaller residential investment properties, larger residential properties like apartment complexes, and commercial buildings. Each type of investment has its own benefits and drawbacks and an investor may be a good fit for one type while not the others. For example, Crook discusses the need for staff, including “supers” and rental managers, when it comes to investing in multifamily buildings.

The author explains the differences between six different forms of ownership (sole proprietorship, general and limited partnership, C and S corporations, and a limited liability company) and what investment situations call for which types.

I found it interesting that Crook gives the reader a “way out,” asking for the would-be investor to question whether he or she truly wants to be a landlord. He admits that the type of work necessary to be successful is not a piece of cake. Other gurus would be happy to let you believe that all you have to do is wish, and you can make money in real-estate investing.

The section on Real Estate Investment Trusts (REITs) is informative. These investments are presented as a way to use the stock market to invest in real estate, perhaps for those who can’t stomach being a landlord. He discusses recent REIT performance and explains what type of investments to look for based on recent performance and growth opportunities.

The final chapter includes the aforementioned 20 Rules, but rather than being built up throughout the book as a secret to be revealed, it is basically a summary of the most important points already discussed in detail.

Crook takes a page from Stanley and Danko’s The Millionaire Next Door in his description of real-estate millionaires.

The vast majority of rich people are distinguished by one overwhelming, dominating trait: They’re frugal. They drive old cars, live in modest houses and wear average clothes. They are rich, not because they are lucky or they have found some secret formula to wealth, but because they work hard, keep a long-term perspective and spend little.

Readers who get comfortable with David Crook’s Complete Real-Estate Investing Guidebook have a good chance of determining which type of real-estate investment (if any) is right for them and becoming successful after the appropriate time and effort.

I will be giving away one copy of Complete Real-Estate Investing Guidebook from Amazon.com, so stay tuned for an announcement of how you can be the lucky winner.

Cash, Cars & College: A Young Person’s Guide to Money
Janine Bolon
(6/10)

When it comes to book reviews, I am usually contacted by the publishers, press agents, or public relations teams. When an author takes the time to email me directly, I pay more attention. I was contacted a few weeks ago by Janine Bolon, the author of Money…It’s Not Just for Rich People!, to review her latest book, Cash, Cars and College.

The book is more like an oversized pamphlet, at 91 pages (including appendices) with large print. The intended audience consists of students between the ages of 12 and 19, but I think the book is most effective for the young end of that range. There are only a few major concepts in the book, and they are explained well for the reader, even taking into account a wide variety of experiences and parental lessons a young teen may have.

Bolon explains that money doesn’t move in a straight line (in, then out), but rather in a cycle of living, saving, and giving. With this idea, money is more likely to come into your life when you give it away. To take full advantage of this cycle, Bolon instructs through some age-appropriate activities to split any income you receive (except for money from your mom for buying clothes, for example) into five buckets based on her 40/60 Principle.

• 40% goes to living. This, the “40%” in the 40/60 Principle, is the money you spend on yourself.
• 20% goes to short-term savings. The description in the book matches what I’ve written about in the form of an emergency fund: savings for unexpected expenses.
• 20% goes to long-term savings. While it’s not completely explained in these terms, this is your retirement fund. If I had known to save money for retirement when I was 12, I’d be much further along than I am now, having started when I was 26 or so.
• 10% goes to a philanthropy of your choice. From the book: “This cash demonstrates your willingness to share the good things that the Universe has given you—thereby showing that you can be trusted to continue receiving (and sharing) the good thingsof the world.”

• 10% goes to a spiritual institution of your choice. While again not explained in the terms we’re familiar with as adults, this is the typical tithing that is taught in the Bible. More importantly, this money is used for giving back to the community of which you’re a part. Bolon does suggest for those who have no religious affiliation to use this 10% for additional philanthropic donations to keep the cycle flowing.

  The above points form the basis of the book. They are in fact “points,” as Bolon has created a five-pointed star to illustrate each destination for income. Around these five points, Bolon fills the book with good advice, perfect for a young teenager. For example, Bolon imparts the lesson: “Do what you like, the money will come.” This certainly encourages kids to improve their skills for whatever type of activity they are most interested in.

  Bolon also explains the virtues of frugality, and for some kids, this will be the first they’ve heard of the concept. She also tackles credit card debt and compound interest in such a way that young adults will understand but not find boring. These concepts, as well as others, are reinforced with exercises at the end of each chapter, similar to—but yet much different than—exercises at the end of the school text books with which readers of this age will be quite familiar.

  The goal of this book is to set these young adults on the path to financial maturity, and here’s her list for getting started on that path:

• Break the (piggy) bank. This refers to the money destinations listed above, based on the 40/60 Principle.
• Plow the ground. Open up two accounts at the bank with your money for short-term and long-term savings, and let compound interest go to work.
• Catch a porpoise. Bolon wants everyone to determine their passion in life—“porpoise” being a pun on the word “purpose”—which will guide them through their choices.
• Drive on. Continue learning about money by reading more books that will lead towards financial independence.
• Branch out. I addition to books, find other resources, such as magazines and, dare I say, websites.
• Stay engaged. Learn all kids of new things continuously, and never stop exercising your brain.

• Relax! Let the world do what it is supposed to do while you take care of your responsibilities, but it will take a long time. Be patient.

  Janine Bolon’s Cash, Cars & College is a good introduction for kids getting an allowance or babysitting, with a small income coming in. Now that they have money to call their own, they can benefit from the author’s suggestions for spending, saving, and giving. Bolon handles the section on giving without preaching and without overly emphasizing religion, which I appreciate. All in all, Cash, Cars & College will set young adults on the right path towards financial maturity, if they follow the exercises and make her suggestions part of their permanent philosophy.

  Why did I give only 6 stars out of 10? I think teenagers in the work force for the first time, say as a waitress or a fast food worker, might have some questions not covered by the book. For example, how do taxes fit into the 40/60 Principle? Are taxes paid from the 40% “living” category or does the entire pool of cash consider only after-tax income? A 12 year old may not be concerned with this question, but a 19 year old might be. Also, I don’t remember much discussion of cars and college in the book, though they are included in the title. Nevertheless, this short book is full of quality suggestions and exercises that can provide good talking points for parents with their children.

  As always, I give away the books I receive for review. Look for a contest of some sort in the next few days. If you’re the parent of a teenager, pay close attention.

Excuse Me, Your Job Is Waiting: Attract the Work You Want
Laura George
(7/10)

A few days ago, I finished reading Excuse Me, Your Job Is Waiting, by Laura George. This book follows in the footsteps of another, Excuse Me, Your Life Is Waiting. The premise of both books is the “law of attraction,” which is generally interpreted in popular culture as the idea that events are influenced by the attitude of those involved. Positive thinking helps encourage positive outcomes.

Of course, none of this is scientifically proven, at least not within this book. However, there are enough anecdotal testimonies to convince people the concept is “true.” In this convincing, positive outcomes can be attributed to positive thinking and negative outcomes can be negative thinking.

I’m convinced, for the most part. Whether positive thinking actually influences outcomes in a cause-effect relationship, I’m not entirely sure. Positive thinking certainly makes one feel better, and this attitude can be picked up by others involved in active communication, and can be perceived as a connection, making everyone feel better about the relationship. If you’re on a job interview, this is a good thing.

The book goes much farther with this idea. Read the rest of this article »

Yahoo Finance is featuring an exclusive excerpt of Suze Orman’s latest book, Women & Money: Owning the Power to Control Your Destiny. If the book follows the standard formula, this excerpt is from the introduction and outlines the 8 qualities of a wealthy woman on which the rest of the book will expound. Here are the 8 qualities.

Qualities 1 and 2: Harmony and Balance. “Harmony is an agreement in feeling, approach, and sympathy… Balance is a state of emotional and rational stability in which you are calm and able to make sound decisions and judgments.”

Quality 3: Courage. “Courage is the ability to face danger, difficulty, uncertainty, or pain without being overcome by fear or being deflected from a chosen course of action.”

Quality 4: Generosity. “Generosity is when you give the right thing to the right person at the right time—and it benefits both of you.”

Quality 5: Happiness. “Happiness is a state of well-being and contentment.”

Quality 6: Wisdom. “Wisdom is the knowledge and experience needed to make sensible decisions and judgments, or the good sense shown by the decisions and judgments made from an accumulated knowledge of life that has been gained through experience.”

Quality 7: Cleanliness. “Cleanliness is a state of purity, clarity, and precision.”

Quality 8: Beauty. “Beauty is the quality or aggregate of qualities in a person that gives pleasure to the senses or pleasurably exalts the mind or spirit.”

Since the excerpt was posted on February 12, the excerpt has garnered 1,960 ratings, averaging 2.5 stars out of 5. That’s not exactly a shining endorsement.

I’ve found that Suze offers decent tips for the general public, but based on her attitude on her show on CNBC, I wouldn’t choose her to be my financial advisor. To be more specific, I find that she needlessly berates the callers. Additionally, her explicit endorsement of unwise financing for GM’s vehicles left me with a sour taste, as I’ve mentioned before.

If you’re looking to hone your negotiation skills, whether in business life or family life, you may want to considering starting with these three new books, recommended by the New York Times.

• The Power of a Positive No: How to Say No and Still Get to Yes, by William L. Ury. “Mr. Ury believes that people often end up unhappy with the outcome of a negotiation because they do not recognize what is truly important to them in the first place.”
• Fearless Negotiating by Michael C. Donaldson. “This thin, breezy book has a Negotiating 101 feel to it. For example, Mr. Donaldson goes out of his way to define basic business terms like profit and markup… But he is good at explaining how to go about each step in his process.”
• The Peebles Principles: Tales and Tactics from an Entrepreneur’s Life of Winning Deals, Succeeding in Business, and Creating a Fortune from Scratch, by R. Donahue Peebles. “You want to control at least one key component of any deal. You want to make it painful for the other side to have to go ahead without you.”

  I’ve added these books at the new Amazon.com Wish List for Consumerism Commentary, and I’ll likely buy them for myself as reading time permits. Negotiation is one area I’m hoping to improve rather than continue to sell myself short in situations in which I feel I don’t have the upper hand.

The final winner of You Call the Shots by Cameron Johnson (reviewed here) is mnc from My New Choice. His comment on my latest income statement post was selected randomly. Thanks to everyone who participated!

If you were hoping to win a free copy but didn’t, I suggest purchasing the book from Amazon.com or checking it out from your local library. The author, Cameron Johnson, has a personal website with a blog on which he writes occasionally.

This week, from Monday through Friday, is You Call The Shots Week at Consumerism Commentary. Each day, I will choose one lucky commenter to receive a free copy of You Call the Shots by Cameron Johnson (reviewed here). To enter for each of the five drawings, simply comment on any post on Consumerism Commentary each day. You can enter more than once each day by writing comments on more than one post. At the end of each day, I’ll announce that day’s winner. Good luck!