Which Personal Finance Guru Would I Recommend?

A reader recently e-mailed me to ask which personal finance guru I’d recommend. I thought about it for a little while and had to tell her that there wasn’t one guru I prized above the others. Instead, I sketched out which personal finance gurus I liked best for particular areas. (I added some blogs as well, but I won’t here, perhaps later.)

I’m going to go into a little more detail here, though there’s still much more that could be said.

Dave Ramsey for Major Debt

If you have major debt and want help and inspiration for getting out of it, the PF guru I’d probably recommend (depending on your temperament) is Dave Ramsey. I found a number of concepts in his Total Money Makeover very helpful. He doesn’t claim to be revolutionary, so they’re possibly things you’ve heard online.

What Ramsey provides is inspiration, even fantacism. His books can make you feel completely devoted to getting out of debt as fast as you can. If you’ve been having trouble motivating yourself and want to get into it, they’re quite helpful. I’d take it with a few grains of salt, but his advice is generally sound if that’s the direction you want your debt-repayment to take.

I wouldn’t recommend this book if your only debt is your mortgage or perhaps your mortgage and your cars as long as you can afford the monthly payments. Ramsey is also an unapologetic Evangelical Christian, and even though I don’t entirely subscribe to his take on it I still find his work useable. Some people find it more difficult, especially knowing that he requires all counsellors to be evangelical Christians, even if they’re not supposed to evangelize.

Despite these, if you’re mired in credit card debt or student loans then he’s probably the person for you. If you’re worried about being evangelized, stick with the books, you can take or leave the stuff there.

Jean Chatzky for Money Management

I’d recommend Jean Chatzky to people who aren’t really in debt but want to be in control and happy about their finances and particularly to women who have decided to take control of their money.

I became a fan after reading her book You Don’t Have to Be Rich. The book focuses on two themes: first, finding balance in your life so that you can be happy even if you’re not rich; second, managing your money so that even if you don’t have a huge income, you can build wealth.

She’s practical, of course, and understand that you do need a certain amount of money to live comfortably and a certain salary to be able to invest. The book is a good cross between self-improvement and money management advice.

She also has an excellent book directed specifically at women, called Make Money, Not Excuses. It works as a good outline for anyone learning to manage their money, but it’s specifically directed at women and the reasons that women don’t pay more attention to their money.

I think you can skip her book Pay It Down! From Debt to Wealth on $10 a Day. There’s nothing wrong with it, per-se, but it’s essentially a latte factor book. The overall premise is that if you find an extra $10/day ($300/month) whether by spending less or earning more, and use it to pay down any debt or build wealth (depending where you are in the cycle). Not bad, but her other books are much better.

Suze Orman for Personal Finance Education

I’m not as fond of Suze Orman as I am of Jean Chatzky. I’m not entirely sure why, something about her doesn’t appeal to me as much.

I do admire her motto: “People first, then money, then things.” From what I’ve read, she seems relationship-oriented. She emphasizes that money isn’t everything. And on her show she addresses a lot of relationship/money questions.

What I recommend most: The Road to Wealth (revised edition). Wow. It’s a comprehensive book of information, an “everything you wanted to know” about personal finance. It’s insanely thorough if not very inspiring.

For example, in the “managing debt” section, for instance, she answers questions such as “How do I know if I’m in trouble with debt?” “Why do so many people get into ‘bad’ debt?” or “what exactly is a debit card?”. Short answers of several paragraphs. Good for people who want to learn more about personal finance or buy a reference guide.

She’s not as strong on getting out of all debt as Dave Ramsey. She accepts a mortgage, for example, as normal. She’s certainly concerned about paying off debt and spending less than you earn, she’s just not as passionate as Ramsey.

Suze has also written a book on women and money which is quite similar to Jean’s. Again, I prefer Jean. But if you don’t like the former, try this one.

She has been criticized for recommending a riskier investing strategy than she herself uses. However, I think it’s understandable because when you have as high a net-worth as she does, you don’t need to take on as much risk.

Robert Kiyosaki for….?

I have a hard time recommending Kiyosaki. Not all of his stuff is bad, but you have a limited amount of time. Why spend it sorting out the good points when you can find them or other good points from other writers?

Things which bother me about Kiyosaki:

1. He very strongly emphasizes real estate and entrepreneurship (and seems to criticize other options). I think that both of those are great ways to make money, but I also think that they’re better for some “types” than others. I don’t want to manage real estate. I find the thought stressful. And I don’t think I’d be happy running my own business in the long run. Yes, I run a blog and a consulting business, but that’s enough for me. Besides, I absolutely love working at libraries. Why give up my passion?
2. He has bashed mutual funds and the like as “risky” (I believe that was the word he used, if not, it was the implication). Of course there is risk involved, but there’s plenty of risk in real estate and entrepreneurship as well. I don’t think that sensible investing strategies are riskier.
3. And there appears to be question as to whether Kiyosaki actually made any money with these techniques or just by being a guru. He’s also admitted that “Rich Dad” is a metaphor. So, if he didn’t make money this way and “Rich Dad” doesn’t exist, then there’s also no proof the system works. At least not from his end.

You can still find inspiration and good stuff in his books. I just don’t recommend them because you can find that inspiration in plenty of other books without the bothersome elements. I think that Lazy Man did a good job of extracting three good points from Kiyosaki’s most famous book.

Other Gurus

Those are the 4 main PF gurus whose books I’ve read. I’ve glanced at other books, but other than John Bogle’s Little Book of Common Sense Investing for people learning about index funds, I can’t recommend any other books or gurus from personal experience (I’ve read some more, but didn’t find them terribly moving).

Perhaps it’s rare that as a PF blogger I haven’t read more, but I read a lot of book reviews, especially on The Simple Dollar and a lot of blogs, so I get the main point of many books and just don’t have the time.

Which gurus do you prefer?

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