25 Myths You've Got to Avoid--If You Want to Manage Your Money Right: The New Rules for Financial Success

25 Myths You've Got to Avoid--If You Want to Manage Your Money Right: The New Rules for Financial Success

by Jonathan Clements, Clements

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Overview

25 Myths You've Got to Avoid--If You Want to Manage Your Money Right: The New Rules for Financial Success by Jonathan Clements, Clements

STOP THINKING ABOUT MONEY IN THE SAME OLD WAY
Have you ever been told that you can't go wrong with mutual funds? That stocks are risky? That you should take out the largest mortgage possible? That life insurance is a good investment? That you should keep six months of emergency money? These myths and more are shattered in 25 Myths You've Got to Avoid — If You Want to Manage Your Money Right. Each of the book's twenty-five chapters tackles a cherished money myth, first telling you why it no longer works and then showing you how to do it right. Along the way you will learn winning strategies for investing in mutual funds, building a portfolio, saving for retirement, paying for college, buying a house, preparing for financial emergencies, selecting insurance, and planning your estate.
The result? Instead of the predictable compendium of tedious advice tossed out by most personal-finance tomes, Clements's book offers a witty, fast-paced journey through today's treacherous investment world. Amusing and irreverent, here is an intriguing and accessible approach to personal finance.

Product Details

ISBN-13: 9780684851945
Publisher: Touchstone
Publication date: 04/15/1999
Pages: 240
Product dimensions: 5.50(w) x 8.43(h) x 0.70(d)

About the Author

Jonathan Clements is an award-winning financial journalist. Born in London, England, and educated at Cambridge University, he spent over three years at Forbes magazine in New York before moving to The Wall Street Journal in January 1990. During his eight years at the Journal, he has spearheaded the paper's mutual funds coverage, written the "Heard on the Street" column, and authored personal-finance articles, before being given his own column in October 1994, "Getting Going," which appears every Tuesday. Clements, a winner of four journalism awards, is also the author of Funding Your Future: The Only Guide to Mutual Funds You'll Ever Need, published in 1993. He works at the Journal headquarters in New York City and lives in Metuchen, New Jersey.

Read an Excerpt

INTRODUCTION
HOW YESTERDAY'S RULES BECAME TODAY'S MYTHS
Everybody needs somebody to blame. I'm blaming my parents. It's unfair, of course. They brought me up, they educated me, they taught me to put the fork on the left. But it's the late 1990s, the world isn't working the way they said it would and I need somebody to blame. Sorry, Ma.
It's not entirely her fault. After all, Dad also deserves some blame. But the real problem is, everything changed. Fixed pensions became unhinged. Cherished employees became temporary labor. Home prices plummeted. Inflation disappeared. Folks kept living longer. Wages stopped rising. And Harvard started charging $100,000 for four years.
All of which means the old financial rules don't work any-more. Remember what our parents told us? Buy the biggest house you can. Nothing's safer than money in the bank. Take out the largest mortgage possible. You can't go wrong with IBM. Everybody should own gold. Stocks are risky. You ought to buy antiques. Remember Uncle Joey? He made a killing in antiques.
Remember?
This sort of foolishness hasn't gone away. But the messengers have changed. You hear this nonsense at parties, on the commuter trains, in the company bathroom, around the water cooler and at the community pool. Your friends and colleagues, who vowed they would never be like their parents, now parrot them endlessly.
Listen at your peril, because this free advice is usually worth what you are paying for it. (That's the reason we're charging serious money for this book. Honest.) With jobs so tenuous and saving for retirement so critical, you can't afford to make big mistakes with your money. You can't afford to buy lackluster investments and pursue wrong-headed financial strategies. You can't afford to get sucked in by the old wacky rules of thumb. These myths may be comforting mantras from the childhood dinner table. But they are still myths.
How did these myths develop? Some of them feed our egos, like the idea that we can beat the market or find the next superstar mutual fund. Some of them grow out of wishful thinking, like the belief that we can get rich buying expensive antiques and fixing up our homes. Some of the myths reflect our fears, like the need for lots of insurance and lots of emergency money. And some myths are old truths that worked once but have since been rendered obsolete by changing circumstances.
The fact is, a lot of the stuff our parents told us is now dead wrong. They didn't just mess us up. They messed everything up. But they also got very, very lucky. That's why we should despise them. They came of age when it really was morning in America. Stocks went up. Gold went up. Real estate went up. Jobs were plentiful. Things were just sickeningly good. (Unless, of course, you were African-American. Or a woman. Or gay. But that's another story.)
Now things are just okay. The gilded age has become the bronze age. Our job is to make the best of it. That's where this book comes in. It won't make you rich overnight. In fact, it may not make you rich at all. But it should help you avoid today's big pitfalls — and make the right financial moves — so that you can cope with financial emergencies, buy the right house, put your kids through college and retire in comfort.
With this book, I want to make you rethink all of your financial strategies. No, I don't expect you to agree with every one of my contentions, But I hope you will at least come to understand some of the flaws that imperil today's most popular money strategies.
Best of all, this book should confirm all of your worst suspicions about your parents and your colleagues and your friends. Yup, you were right all along. They really have been talking a lot of nonsense.
Copyright © 1998 by Jonathan Clements

Table of Contents

CONTENTS
INTRODUCTION: HOW YESTERDAY'S RULES BECAME TODAY'S MYTHS
MYTH NO. 1: YOU CAN HAVE IT ALL
MYTH NO. 2: GET A GOOD JOB AND YOU'LL BE SET FOR LIFE
MYTH NO. 3: STOCKS ARE RISKY
MYTH NO. 4: YOU CAN'T GO WRONG WITH IBM
MYTH NO. 5: YOU CAN BEAT THE MARKET
MYTH NO. 6: YOUR INVESTMENTS WILL MAKE 10 PERCENT A YEAR
MYTH NO. 7: YOU CAN'T GO WRONG WITH MUTUAL FUNDS
MYTH NO. 8: YOU CAN FIND THE NEXT MAGELLAN
MYTH NO. 9: INDEX FUNDS ARE GUARANTEED MEDIOCRITY
MYTH NO. 10: NOTHING'S SAFER THAN MONEY IN THE BANK
MYTH NO. 11: IF YOU NEED INCOME, BUY BONDS
MYTH NO. 12: HEDGE YOUR BETS WITH HARD ASSETS
MYTH NO. 13: YOU SHOULD OWN A BALANCED PORTFOLIO
MYTH NO. 14: YOU NEED A BROKER
MYTH NO. 15: KEEP SIX MONTHS OF EMERGENCY MONEY
MYTH NO. 16: DEBT IS DANGEROUS
MYTH NO. 17: BUY THE BIGGEST HOUSE POSSIBLE
MYTH NO. 18: YOU CAN'T BEAT THE MORTGAGE TAX DEDUCTION
MYTH NO. 19: INVEST IN YOUR HOUSE
MYTH NO. 20: TRADE UP AS SOON AS YOU CAN
MYTH NO. 21: PROTECT AGAINST EVERY DISASTER
MYTH NO. 22: LIFE INSURANCE IS A GOOD INVESTMENT
MYTH NO. 23: INVEST IN YOUR KID'S NAME
MYTH NO. 24: MAX OUT YOUR IRA EVERY YEAR
MYTH NO. 25: ONE DAY, KIDS, ALL OF THIS WILL BE YOURS
CONCLUSION: THE NEW RULES FOR FINANCIAL SUCCESS
INDEX

Introduction

INTRODUCTION

HOW YESTERDAY'S RULES BECAME TODAY'S MYTHS

Everybody needs somebody to blame. I'm blaming my parents. It's unfair, of course. They brought me up, they educated me, they taught me to put the fork on the left. But it's the late 1990s, the world isn't working the way they said it would and I need somebody to blame. Sorry, Ma.

It's not entirely her fault. After all, Dad also deserves some blame. But the real problem is, everything changed. Fixed pensions became unhinged. Cherished employees became temporary labor. Home prices plummeted. Inflation disappeared. Folks kept living longer. Wages stopped rising. And Harvard started charging $100,000 for four years.

All of which means the old financial rules don't work any-more. Remember what our parents told us? Buy the biggest house you can. Nothing's safer than money in the bank. Take out the largest mortgage possible. You can't go wrong with IBM. Everybody should own gold. Stocks are risky. You ought to buy antiques. Remember Uncle Joey? He made a killing in antiques.

Remember?

This sort of foolishness hasn't gone away. But the messengers have changed. You hear this nonsense at parties, on the commuter trains, in the company bathroom, around the water cooler and at the community pool. Your friends and colleagues, who vowed they would never be like their parents, now parrot them endlessly.

Listen at your peril, because this free advice is usually worth what you are paying for it. (That's the reason we're charging serious money for this book. Honest.) With jobs so tenuous and saving for retirement so critical, you can't afford to make big mistakes with your money. You can't afford to buy lack my contentions, But I hope you will at least come to understand some of the flaws that imperil today's most popular money strategies.

Best of all, this book should confirm all of your worst suspicions about your parents and your colleagues and your friends. Yup, you were right all along. They really have been talking a lot of nonsense.

Copyright © 1998 by Jonathan Clements

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