Ric Edelman founded Edelman Financial Services many years ago after spending several years working as a financial journalist. In his work as a journalist he became very concerned that so many financial advisers seemed to be more concerned with their own commissions than with the needs of their clients. He determined to start his own Financial Services Company that would be dedicated to always serving the best interests of their clients. Three times he has been named the #1 financial adviser in the US by Barron’s. He has weekly radio and TV shows and is a New York Times best-selling author.
The subtitle of The Truth About Money is “Everything You Need to Know About Money”. While it might not be everything, it comes pretty close. The Truth About Money is almost like a text book on personal finance. But not a text book in the sense of a stuffy, boring tome. What I like about Ric’s writing is the way he takes complex financial topics and reduces them to a very simple explanation that anyone can follow.
In many ways The Truth About Money is like a reference book that you can place on the shelf and refer to again and again as need arises.
Need to understand what an ETF is? Should you be buying long-term care insurance? The tax implications of that gift great aunt Suzy wants to give you before she dies? IRA’s, 403B’s, 401K’s, SEPP’s, and a bunch more acronyms. Are annuities a good deal? These questions and hundreds more are answered.
The book is arranged in very short bite-sized chapters. In addition, at the beginning there are guides that point you exactly where to turn if you have questions like “Understanding Your Credit Report”, “Facing Unemployment”, or “How to Buy Your First Home”.
Where we part ways
I thought Ric’s advice was excellent throughout most of the book. There is one point though where I cannot agree with him. He makes the case that it is a wise financial move when getting a mortgage to spread your payments out over the longest term possible and make only the down payment required to avoid having to pay PMI. In addition you should never make extra payments or make any attempt to pay the mortgage off early. By attempting to pay extra on your mortgage you are tying that money up in your home. If you should need extra cash for some kind of serious emergency, you might only be able to get it out by selling your home. He provides 11 reasons for keeping a large mortgage, but his primary concern is the lack of liquidity that comes from having your money tied up in your home.
In a pure mathematical discussion I understand his point and he may be right. As a Christian though and viewing my financial decisions through the lens of scripture, I cannot promote the idea that debt is ever a positive. No where does the Bible say being in debt is a sin, but there are many verses that indicate that debt is unwise.
I think there is a spiritual and a psychological benefit to being completely debt free that transcends the mathematical discussion. On this point we will have to agree to disagree.
A primer on personal finance
This book would make a great reference manual to keep on your shelf. Whether you are interested in financial planning, investments, real estate, taxes, retirement, insurance, or estate planning The Truth About Money is a good resource. While it covers a wide variety of topics, it probably focuses most on understanding the complicated world of investing. What I like most about the book is he takes the terms and concepts involved and explains them in a very simple, easy to understand fashion.
I have been listening to Ric’s weekly radio program for several weeks. One of the things I respect the most from listening to his philosophy is he seems legitimately driven by helping anyone that comes his way. Many financial advisers have minimum amounts of money you must have before they will talk to you. Edelman Financial Services has very low minimums for investing and provides many services for free. I respect his desire to help as many people as possible.
If you are looking for a comprehensive primer on personal finance, The Truth About Money is a good choice.