There are few things I enjoy as much as reading the latest information that’s shared in the world of finance. Recently, I read two new books that I recommend to those who share my love of financial literature. Below are my reviews and some important takeaways from the books.
Chess Grandmaster Susan Polgar and Certified Financial Planner Douglas Goldstein, host of the personal finance radio show “Goldstein on Gelt,” have collaborated to write a delightful book, “Rich as a King: How the Wisdom of Chess Can Make You a Grandmaster of Investing.” While the book certainly won’t make you a grandmaster investor, it’s an excellent beginner’s book for either a young adult starting out on their financial journey or a novice investor. And you don’t have to be a great chess player for it to be helpful.
The strength of the book is its entertaining-yet-informative style, using dozens of analogies between chess and investing and life in general. It’s best at helping us understand the importance of having a well-developed, overall financial plan, not just an investment plan.
For example, the book provides lessons about the need to address such issues as the potential for dying early (the need for life insurance), being disabled (the need for disability insurance), longevity risk (the need for fixed annuities) and saving (the need for an emergency fund).
It also addresses many basic personal finance issues, such as avoiding credit card debt, saving early and as much as possible, taking advantage of 401(k) plans and avoiding withdrawal from them except in emergencies. It even addresses many of the behavioral errors we make, including overconfidence, and the problems such errors can cause.
Ignore The Noise
While the investment advice is also very basic, it’s both important and sound. For example, the authors explain why you should ignore the noise put out by market forecasters and hot tips from family or friends, as well as the importance of diversification (using funds rather than individual stocks) and of favoring low-cost investment vehicles. But the investment side is not the strength of the book.
The bottom line is that if you’re looking for a basic personal finance book for yourself or as a gift, “Rich as a King” provides much valuable advice in an entertaining and informative way, making it a great choice for someone who might not otherwise read what for many is a dry, though important, subject. Chess players who know little about investing, and investors who know little about chess, will both benefit from the book’s simple wisdom.