There are four stages of competence in a learning process:

1. unconscious incompetence
2. conscious incompetence
3. conscious competence
4. unconscious competence

Reviews of this book on Amazon.com website tend to fall into two categories: written by people who got an "eureka" experience while reading this book, and by people who got disappointed by this book and believe they wasted their money and time on it.

The people in the first category are those who got from the stage 1 to the stage 2. They finally realized why their whole life up to this point was a constant struggle for money. They finally see that there is a way to exit that Rat Race.

The second category of readers consists of people who are already in the 4th or at least the 3rd stage of learning about personal finances. They manage their own finances successfully, and most financial ideas are just obvious to them. They are unconsciously competent, so they don't see anything useful in this book. Because of disappointment, some of them are trying to discredit Mr Kiyosaki, for example: they question authenticity of all those dialogs between Robert and his Rich Dad. But it doesn't really matter whether they're authentic or not. Those dialogs might be totally fictional as well, because it's not important. The purpose of this book is to open the eyes of the poor people and motivate them to get the control over their own lives. And that's what this book does very well.

Anyway, don't take the financial advice literally. The 401(k) is not as bad as Mr Kiyosaki describes. Also, savers are not losers.

This is the best book for people who struggle with their money and don't even know why their life is so miserable. For most of them, this will be a life-changing book.

This book was originally written about a hundred years ago. The beauty of this book is that it is very concise and very short (and cheap - below $5). It's about the everyone's right to be rich. No one has to suffer in order for you to get rich. The way anyone may get rich is only by having certain beliefs about money and wealth. Change your beliefs, and you'll inevitably get rich soon. It is a very simple straightforward book that anyone can follow. Most important of all, this book will help you look at your own life from aside, set your priorities straight, and start doing what you always dreamed about.

The Richest Man in Babylon was first published in 1929 by George Clason, but written as if it had been translated from tablets taken from the ancient city of Babylon. This timeless classic makes basic financial principles extremely easy to understand. Most basic financial principles explained in the most easy way. In essence: save at least 10% of what you earn no matter what your current situation in life, invest, learn to use compounding and you'll get financially free and secure. Highly recommended, especially for teenagers.

This book is a must read. It is a summary of findings from statistical research of Dr Stanley about characteristics of the wealthy. It goes against popular myth as to who are the wealthy and why. Apparently, most of them are just simple folks living their frugal life. They don't drive expensive cars, don't wear expensive clothes, they don't live in expensive houses. They spend money only on necessities, they just save at least 10% of what they earn and invest for many years to achieve financial security. At some point they just inevitably get rich.

This book is a followup to The Millionaire Next Door. The first book is the answer to the question "who is the average millionaire?", and this one is the answer to the question "what personal characteristics has the average millionaire?".

Both books about American millionaires describe how the average millionaire gets wealthy. Apparently most of them live very frugal and simple lives. Exactly as being promoted by the book Your Money or Your Life. Live below your means, work hard, be frugal, save, invest for long-term. Live your own life, not the life of the others. All those millionaires seem to live just "next door" but at the same time in some very different world. Their meticulous and pedantic approach to finances pays off in the long-term very well.

This book presents a lot different approach than the Rich Dad, Poor Dad. Live frugal, save, invest in bonds (avoid stocks and risky investments), and somewhere down the road you'll be able to retire early and live frugal and simple life in retirement. This book promotes simple living. It is good to cool down the over-motivated reader after reading Rich Dad, Poor Dad. For many people it was also a life-changing book.

What differentiates this book from the other books about simple living, is the practical nine-step program, to help get the reader from his current position to the stage when he controls his money. In nine steps the author will guide you to a different, more purposeful life and understanding what really matters in life.

The central idea of this book is that we all trade our life energy for money to make a living. In fact most people are not making a living buty making a dying. Most people struggle from paycheck to paycheck in a never-ending vicious cycle. Untill they understand what is the cause, they will not be able to break free.

The conclusion is: Your money is your life. You trade your life for money at your job to have means to sustain your life and some more to save for retirement and/or spend making your dreams come true. But most people spend their lifes on things they just temporarily want and don't even need. Every single hour of your life is important. You can express hours of your life in dollars, because by spending money you are spending your life. So the next time you think about buying another doodad, you'll recalculate the price from dollars to hours of your life, which you spent to earn that money. Whenever you get the urge to buy a new toy, ask yourself "Is this toy really worth that X hours of my life spent in that job?". Unless you love your job (most of us don't), your answer will be "NO!". Next time you'll think thoroughly before spending money on any of those things you want but don't really need. You'll really appreciate the value of your life and every little thing you spent money on. People who don't care about money, don't care about their lifes. But you wont be one of them anymore.

The older edition of this book is still available, check this link: Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence.

Eric Tyson is a professional financial advisor. He wrote this book in quite easy to read and entertaining way. But if you don't have the motivation to even start managing your finances, you won't get it from this book. So get motivated first by reading one of the books mentioned above. If you're already highly motivated, you'll read this one fast. Most probably, you'll skip parts that don't concern your life situation. Most important to remember though, is that the author of this book tells only the generally accepted by financial professionals approach to financial instruments. For example:

• Start contributing to your 401(k) as soon as you start working.
• Invest for long-term.
• Don't tap it in emergency situations.
• The younger you are, the more aggressive investments you may invest in, like mutual funds investing in emerging markets.

From practical point of view it's a bit different:

• Start contributing to 401(k) only when you build your emergency fund and safety-cushion fund first. Contribute only if your employer match is at least 25% - otherwise you're putting your money into your employers pockets.
• Investing is always for long-term, but life situations may change it any time - remember that and think about possible scenarios in your life and how to hack your 401(k) to get the max out of it.
• Use 401(k) funds in emergency situations (but only after your emergency fund dries up).
• The younger you are, the less experienced you are - start with safest investments first. Then, as your financial awareness and experience progresses, you may start switching funds toward more risky (or generally perceived to be risky) investments. It's like learning to ride a BMX bike - the more experienced you become, the more risky stunts you can perform. But for some reason financial advisors want young people to kill themselves financially by recommending them to invest in the most risky investments right at the start.
• Most employers offer a very poor choice of investments inside 401(k), usually some underperforming mutual funds - practically, it's better to invest in Money Market fund only, and after several years do a rollover to a Traditional IRA account or better yet to a self-directed 401(k) plan in your own small corporation where you have a better control over investments.

The Personal Finance for Dummies is, as the name implies - for dummies. This book is for the so-called "professionals". It's for educated idiots: doctors, lawyers, engineers, accountants. For people who graduated from college, for whom the only carrier in life is climbing up the corporate ladder. It's not for the people who have the courage to start their own corporation, it's not for the people who use every possible way to legally avoid taxes, and it's not for the people who are able to develop an entrepreneurial spirit. It is not for the people who instead of climbing the corporate ladder prefer owning the corporate ladder with all those well-educated "professionals".

But no matter which group of people you've chosen to belong to, it's still good to read this book, mostly because of the part about budgeting and saving. Just remember to use your critical thinking all the time.

This book is a very good primer on bonds. It does a great job explaining the various types of bonds available: treasury, municipal, corporate, convertible, mortgage backed securities, etc. Even if you intend to invest in stocks only, you have to understand bonds, because it will help you analyze debt structure of any corporation. In short, you need to understand everything that may impact your stock, and bonds and corporate financing in general happen to be very, if not the most important thing.

The Rule #1 book is a very well organized investment guide. The book is worth reading for several things: the MMMM formula (Meaning, Moat, Management, Margin-of-safety), and the way to calculate in seconds the discounted cash-flow formula in your head, without using any calculator. Also, how to recognize Moat and what numbers on financial statements are the most important - The Big Five: ROIC, BVPS, EPS, Sales and free cash-flow.

The way Phil Town made his fortune is quite questionable. He says he borrowed about $1000 from a credit card to invest and just about five years later he had a million (CAGR=(1,000,000/1,000)^(1/5)-1=2.98=298%). That's about 300% after-tax gain a year. Quite impossible with a meager 15% annual return he promises in the book. He admitted though, that he was a venture capitalist for some time and made some money in real estate. Also, he says he was just plain lucky when he started investing in late nineties, just before the stock market took off. In the book he doesn't recommend investing in what he calls Risky Investments which made him rich.But instead he promises a 15% annual return. BTW, Warren Buffet anualized rate of return is between 20 and 30%.

Anyway, the ideas and investment principles is what matters here. Even if that 15% is also impossible, it's still worth trying. Those who try may gain a lot or nothing. Those who don't try will have nothing for sure.

Written in a narrative way. It's more a motivational book than an investment guide. According to Peter Lynch, most people is in a better position to spot a great investment than Wall Street professionals. Most valuable concept of the book is the categorization of the stock investment opportunities and approach to stock picking and business analysis. Although, the latter is shown only in examples.

It's worth to mention that Peter Lynch was one of the first to use PEG ratio. In essence PEG investors buy a stock with PEG ratio below 1 and sell when PEG is greater than 2. Although there's not a word about PEG in the book, Peter Lynch compares PE ratio to growth rate instead. Buy when PE is less than EPS growth rate, sell when PE ratio is more than 2 times EPS growth rate. Practically it is the same as using PEG ratio (buy when PEG<1, sell when PEG>2).

Peter Lynch was probably even better stock investor than Warren Buffett ever was. He was a mutual fund manager, so the gains were mostly from capital gains on stock sales. In comparison, Warren Buffett usually buys whole companies and most of their free cash-flow goes to his company Berkshire Hathaway to invest. He controls the cash-flow, while Peter Lynch as most of us individual investors practically didn't have any control other than voting rights. What is more, as a mutual fund managers he couldn't afford to invest in something else than stocks or keep money in cash for years waiting for the right opportunities as Warren Buffett does.

This is the only one book about Warren Buffett authorized by Warren Buffett. The author is a mutual fund manager of the value fund. That's why a huge chunk of this book is devoted to praising value investing with the emphasis on the "value" word.

The most valuable part of this book is the practical side of Warren Buffett investment picking and analysis. The four tenets checklist (page 59) of 12 steps describes it all (later detailed in chapters 5-8). The four tenets are:

• Business Tenets
1. Is the business simple and understandable?
2. Does the business have a consistent operating history?
3. Does the business have favorable long-term prospects?
• Management Tenets
4. Is management rational?
5. Is management candid with its shareholders?
6. Does management resist the institutional imperative?
• Financial Tenets
7. What is the return on equity?
8. What are the company's "owner earnings"?
9. What are the profit margins?
10. Has the company created at least one dollar of market value for every dollar retained?
• Value Tenets
11. What is the value of the company?
12. Can it be purchased at a significant discount to its value?

It's a bit funny how fast the author switched to praising other famous investors in the chapter 10 (Managing Your Portfolio). Except for the several rules in the table on page 160, there is not much valuable information for the individual investor here. Almost everything else in this book is just extolling virtues of Warren Buffet.

Even several steps in 12-step checklist on page 59 should be corrected. For example long-term prospects (business tenets, step 3) is not as important as competitive advantage as Warren Buffett himself stated in one of his letters to shareholders. Although the investment philosophy of Warren Buffett is better covered by Rule #1 it is still worth to read this book because of the biography of one of the greatest investors of our times.

It's just another book on value investing. As an investment guide for beginners is not as good as Rule #1, but it is still worth reading for easy explanation of investing concepts as: catalysts, categorization of stock opportunities, valuation methods (sum-of-the-parts, DCF, acquisition value), margin of safety, etc. All of that quite well organized and put in a very understandable way, although not for beginners. It seems to be a bit overloaded with examples.

The "Five Keys" remind of "Four Tenets" from The Warren Buffett Way with addition of catalysts:

1. Is this a good business run by smart people?
2. What is this company worth?
3. How attractive is the price for this company, and what should I pay for it?
4. How realistic is the most effective catalyst?
5. What is my margin of safety at my purchase price?

The whole book seem to be packed with valuable information, one the practical examples is the list of 15 Business-Quality Red Flags in Chapter 2 (page 44). Another example is the description of SEC forms.

Although most value investors emphasize investing only in good businesses with a good and honest management (qualitative analysis), most books on value investing somehow skip the part evaluating management. It's good, because most probably it would be a waste of paper and readers time.

This book is a summary of about 5 years-long research of 21-person team. Out of over a thousand companies the team carefully selected 11 companies. They were looking for what caused the companies to make such huge advance and remarkable transition. Some of their findings are quite counterintuitive. It turns out that the most important for every company is not the industry and competitive advantage, but the top quality management team. Especially the leader (CEO) must possess special mix of personal characteristics and professional abilities.

The book doesn't belong to category of investment books, but it is one of the most important books for every investor. After reading this book, an investor will be able to quite easily categorize the CEO to one of the Five Levels. But most important of all, he will be able to practically recognize a true leader from a hired manager.

This book describes seven shady accounting maneuvers and tricks often called creative accounting.

In authors own words: "Financial shenanigans are actions or omissions intended to hide or distort the real financial performance or financial condition of an entity. They range from minor deceptions (such as failing to clearly segregate operating from nonoperating gains and losses) to more serious misapplications of accounting principles (such as failing to write off worthless assets; they also include fraudulent behavior, such as the recording of fictitious revenue to overstate the real financial performance). Since management is clever about hiding its tricks, investors and others must be alert for signs of shenanigans."

This book shows how GAAP rules can be twisted to mask poor financial performance and boost the price of stock.

The seven financial shenanigans are:

1. Recording revenue too soon
2. Recording bogus revenue
3. Boosting income with one-time gains
4. Shifting current expenses to a later or earlier period
5. Failing to record or improperly reducing liabilities
6. Shifting current revenue to a later period
7. Shifting future expenses to the current period as a special charge

The seven accounting tricks are just basic accounting maneuvers to watch for on the financial statements. There are many more ways managers can deceive investors. Reading this book will wakeup an accounting detective in you. And that is the most valuable lesson from this book.

It's worth to mention, that the author of this book is a psychiatrist. He developed the concept of a three-legged stool - if any of its legs is weak, the stool will break when used.The three principles (legs), called the three M's, are:

• Mind: psychology of the trader and emotional discipline
• Method: stock picking and selecting proper technical analysis tools
• Money: money management and diversification

The book consists of three parts: psychology of the individual trader and mass psychology, technical analysis tools and money management. The first part of the book is the most valuable. The money management is also very helpful. Many other authors mention the "importance of money management" but don't tell you what it is or how to do it. However there's not much about Kelly formula (optimal f) in this book either. Apparently even Warren Buffett, as admitted by Charlie Munger, unconsciously was using Kelly formula for years. In essence, you bet more on the least risky investment with the highest potential. In a book about trading this should be covered in detail.

This is the first of 3 Market Wizards books in which Jack Schwager interviews top traders in the financial markets about their backgrounds, experiences, and techniques. Published in 1989, just two years after the stock market crash of October 1987. As a former commodity trader, the author used his experience and knowledge to ask the right questions.

As stated by one of the readers in a review on Amazon.com: "the basic concepts revealed by the Wizards are Discipline, Capital Preservation, Risk Management, Individual Responsibility, Flexibility, Intellectual Honesty and Consistency."

Published 5 years after the Market Wizards. This book delves more into trading systems and psychology than the first volume. As one of the reviewers on Amazon.com stated: "Anyhow, remember more than HALF of these people have since gone the way of Livermore and blown up and those that haven't are RETIRED and teach at high costs."

Jesse Livermore was an early 20th century stock trader on Wall Street where he made and lost his fortune several times over. Most notably selling short in stock during stock market crash in 1907 and 1929. It is said that Livermore committed suicide in a bathroom of the Pierre Hotel and died a penniless man. His fictionalized life was depicted in a book Reminiscences of a Stock Operator by Edvin LeFevre and Roger Lowenstein.

Whatever happened to all those traders interviewed by Schwager is not important. But the fact is that only a few traders make money consistently. Most traders make money writing books and selling investing newsletters with the exception of those who make money in a not quite legal way, for example front running or insider information.

Published about 11 years after the Market Wizards. The author interviewed hedge fund managers who manage hundreds of millions or billions of dollars. The strategies are of no value to the individual trader. Some traders refused to disclose their trading systems. But it's worth reading anyway as the reader can benefit from learning their logic of thinking.

Quite astonishing is the fact, that most of interviewed traders - people on the practical side of trading/investing - don't support the Efficient Market Theory.