A gift of financial counsel

The Baltimore Sun

Something old, something new, something borrowed, something to read?

Gail from Pasadena is looking for a good book as a wedding gift. Seeking suggestions, she writes:

"Our nephew is getting married at the end of May, and, in addition to the usual mixer, blender, whatever, I'd like to give him and his fiancee a good book on money and finance. They're in their mid-20s."

Helping a young couple get started on the right financial footing is an excellent idea. Years ago, I gave my newly married sister Making the Most of Your Money by Jane Bryant Quinn for Christmas. I suspect as she tore open the wrapping she was hoping for a 5-pound box of chocolates, although she appeared happy with the 900-plus-page book.

Personal finance books outnumber stocks in the S&P; 500 index, or so it seems.

All of them tend to fall into three categories, says James Angel, an associate professor of finance at Georgetown University.

"There are the 'How to Get Rich in 30 Seconds' books. Most of those are frauds. There are the 'How to be a Good Consumer' books. Things like how to buy a car and not get ripped off stuff," Angel says. "There are 'How to Invest Wisely' books. It's a fairly glutted market. Most of them say pretty much the same thing - use common sense, don't get in hock with credit-card companies and make sure you don't spend all your money on lattes."

Here are recommendations to help Gail cut through the stacks:

Virginia financial planner Barry Glassman suggests Personal Finance for Dummies. "She needs to get over the title. Tear off the front page if necessary," he says. "The Dummies book is packed with great basic advice and information. It's easy to understand and a terrific resource to have on the bookshelf - with a fake [cover] that says Citizen Kane."

Angel likes A Random Walk Down Wall Street by Burton G. Malkiel. It's required reading for his MBA students.

"It's a fun book to read. It's not filled with a lot of equations and such. It gives you a good intuition about how markets work and how to think about investing," he says.

Christine Fahlund of T. Rowe Price Associates suggests financial planner Sheryl Garrett's On the Road: Getting Married or On the Road: Starting Out. "Sheryl has really focused her career and business on the middle market and real people as opposed to people of high net worth," Fahlund says.

Both Fahlund and Bel Air financial planner Doug Robinson say lessons from Andrew Tobias' The Only Investment Guide You'll Ever Need have stuck with them for years. Robinson likes the book's irreverent tone. "It's written by a guy who is very successful ... sharing his hard lessons learned," he says. "It's the one financial planning book ... for the general public over the last 17 years that has earned a place on my bookshelf."

The two books most often mentioned are The Richest Man in Babylon by George Clason and The Millionaire Next Door by Thomas Stanley and William Danko. Both are more inspirational than financial primers.

Frederick financial planner Deborah Voso says the Babylon book would interest even those who don't like to read. "I often have given it as a wedding present," she says. And Millionaire Next Door reveals that "the millionaires in this country are ordinary people doing wise things with their money," she says.

Gail doesn't have to limit herself to books. How about a magazine subscription?

"The thing about personal finances is the world changes. We have to keep changing with it," Angel says. "The tax code changes every other week. New products come online. Credit-card companies find new and clever ways of charging us fees. A newfangled mortgage comes out. Should we get one? It's a never-ending process."

Magazines such as Kiplinger's, Smart Money and Consumer Reports Money Adviser can help a young couple keep up with the whirlwind. Plus, the pair will remember Gail's generosity each month.

If Gail doesn't mind splurging, she can buy the newlyweds a couple of hours of a fee-only planner's time. The Garrett Planning Network, at www.garrettplanning.com., helps locate planners working on an hourly, fee-only basis. Expect to pay $150 to $300 an hour.

Questions? Comments? Write personal.finance@baltsun.com

MORE AMBROSE Find Eileen Ambrose's column archive at baltimoresun.com/ambrose

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