J.D. Roth’s Your Money: The Missing Manual is a sensible and accessible guide to personal finance. It covers the psychology of money and happiness, goal-setting, budgeting, managing debt, frugality, banking, credit, taxes, investing, and more. While at least some of the contents are likely to be familiar to any reader, before the pick up the book, I found it valuable as a kind of checklist. It helped to identify areas in which I didn’t know as much as I should, and helped me come up with a half-dozen financial tasks I should undertake.
The book places particular emphasis on the importance of cashflow: getting into a situation where income each month is serving sufficiently to cover basic needs, work toward reducing debt, set resources aside for emergencies, and advance long-term financial plans like home ownership and retirement. The book isn’t shy about giving advice. For instance, it expresses the view that actively managed mutual funds are an exploitative industry from the perspective of investors, and endorsing regular contributions to index funds as the best long-term investment strategy.
Two flaws with the book, from my perspective, were an inconsistent level of detail and a U.S. focus. I cannot legitimately complain about the latter, since that is the target audience. Still, Canadians should know that some of the content on insurance, retirement, and taxes is not appropriate to them.
One nice little thing about the book is that it is printed on unusually good paper, with a pleasantly robust cover for a paperback. The author points out how getting value for money doesn’t mean going for the cheapest option, but rather for the one that serves your needs best relative to its price. The book’s philosophy is reflected in its construction.
Did it answer your earlier questions about mortgages?
No, it did not.
My curiosity is a fairly idle one, as I don’t expect to be doing anything other than renting for the foreseeable future.