A money management reference book.

* IN THE GURU GUIDE TO MONEY MANAGEMENT, authors Joseph H. Boyett and Jimmie T. Boyett state that there are more than 8,000 personal finance and investment books in print, with over 300 published in 2002 alone. What exactly is the advice that all of these "experts" are trying to disseminate?

Is there a common theme? Is the advice redundant, or does each author provide unique, and possibly conflicting, advice? Is the counsel practical or too complex for an ordinary person to follow? Are the ideas sophisticated and insightful or simply common sense? In their book, published by John Wiley & Sons, Inc., Joseph and Jimmie Boyett try to address such questions.

The Boyetts are experienced writers of this genre, having previously written The Guru Guide to the Knowledge Economy, The Guru Guide to Marketing, and The Guru Guide to Entrepreneurship. In their Guru Guide books, they attempt to summarize and synthesize the best of what has already been written on a specific topic to create a succinct and comprehensive literature review. Given the deluge of money management publications, this new installment is an appropriate addition to the series.

In The Guru Guide to Money Management, the Boyetts make no pretense to having read all the literature published on personal money management. Rather, they have whittled down a vast collection of writings to a manageable size of 80 different money management "gurus" and their publications, representing the best and most popular, including pieces from Jane Bryant Quinn, Suze Orman, David and Tom Gardner, Arthur Levitt, Charles Schwab, and Peter Lynch. Topics covered include budgeting, insurance, debt and credit, calculating one's net worth, finding the appropriate bank, money-saving strategies, mortgages, and retirement.

Because many of the topics are rather straightforward, there's rarely significant disagreement among the gurus. For example, the experts all concur that one should pay off high-interest debt (e.g., credit cards) first. Further, it's no surprise that most gurus agree that index mutual funds are a superior investment to managed mutual funds; dollar-cost averaging is a simple but shrewd investment strategy; and one should take maximum advantage of retirement plan contributions.

The more intriguing reading is when the gurus disagree. In these rare instances, the book does a fine job of comparing the various perspectives and explaining the differences. One example is the assorted opinions on asset allocation relative to age, the classic "rule of 100," which suggests the percentage of one's portfolio invested in bonds and/or cash equivalents should be equivalent to one's age, and the remainder (i.e., 100 minus one's age) invested in stocks. The book then provides modifications of this rule from various gurus. One notable exception, Charles Schwab, offers a much more aggressive approach to investment allocation. At age 50, Schwab recommends being 95% invested in stocks. Even at age 80, Schwab suggests having 40% invested in stocks, twice the amount computed by the "rule of 100."

Unfortunately, a book summarizing the personal money management literature is bound by its very nature to have two shortcomings. First, it contains numerous discussions and techniques that are little more than common sense. Much of money management advice can be summarized as "be prudent, be thrifty, and begin saving early in one's life." The second inevitable weakness is that the book includes some of the psychobabble inherent to money management literature. The chapter discussing the "proper relationship with money" is particularly replete with esoteric concepts and advice, such as, "Money behaves like a person, going to people who are strong and powerful, respectful of it, and open to receiving it," or, "The road to financial freedom begins not in a bank or even in a financial planner's office...but in your head. Think millionaire thoughts, not poverty thoughts." Fortunately, there are areas of the book that are more substantive, such as the extensive discussion comparing the legal differences between credit and debit cards.

The Guru Guide to Money Management is an admirable taxonomy of the personal money management literature. Readers who desire quick advice without sifting through supporting analytical proofs or theoretical discussions will find it very useful and practical, and even those with expertise in money management will find the book interesting or will at least be challenged by a different perspective.