Can you read yourself rich?

The economic crisis has prompted many people to seek help from personal finance books, with Amazon reporting a significant uplift in sales. Classics of the genre promise a quick route to riches, while recent examples, written since the start of the downturn, tend to be more cautious and realistic in their claims.

Times Money has looked at the five bestselling financial self-help books at Waterstone’s and asked financial planners for their views on the key ideas, rating the books from one to five stars. All have a snappy style and are accessible to the novice, but some are considerably more helpful than others.

Note that the recommended retail prices shown can be beaten easily. All the books are selling at a discount at Amazon, and the fifth, by Richard Templar, is half price at Waterstone’s.

Rich Dad, Poor Dad by Robert T. Kiyosaki
Sphere, £8.99
This 1997 book, the centrepiece of the author’s self-help empire, tells the perhaps allegorical story of two fathers: Kiyosaki’s own and his best friend’s. The former, poor dad believed in working hard for a company and keeping “secure”. He died penniless. Rich dad chose to own businesses and boosted his income “passively” by investment, becoming one of the richest Hawaiians and leaving tens of millions of dollars.

Kiyosaki admires the “positive-thinking” guru Napoleon Hill (see below) and touts mantras such as “I choose to be rich and I make that choice every day”. The focus is on getting rich, rather than being comfortable. He explains that his “personal basis” is property.

Expert’s verdict
Zac Ghadially, of Yellowtail Financial Planning, says: “Building an investment income stream can work, but not for everyone. Also, we are advising people to scale down on property at the moment — to use it to meet their life goals, but not as an investment.”

Times Money rating (out of five): 1 star

How to be Smart With Your Money by Duncan Bannatyne
Orion, £12.99
This new book has the advantage that it was written for a British market with the credit crunch in mind. It offers a comprehensive guide to earning, spending, borrowing, investing, saving and budgeting — with sections on choosing a savings account and buying a car, for example. It also has a list of questions to ask when shopping for a loan. There is no get-rich-quick carrot or big “secret” to success.

Bannatyne takes a more cautious line than Kiyosaki, writing, for example, that “the golden rule of investment is to spread your risk” — a strategy dismissed by the American as for people who “go nowhere”. He emphasises that readers should stop worrying about money and start to think about it and make changes.

Expert’s verdict
Mr Ghadially agrees that thinking about money is the first step to healthier finances, and says that Yellowtail asks its clients to complete a written review — something readers of Bannatyne’s book can do on a shoestring using its budgeting charts.

Times Money rating: 5 stars

Think and Grow Rich Napoleon Hill
Vermilion, £8.99
This was first published in 1937 to spread the author’s “secret” to those who, without it, might “go through life as failures”. The secret is never spelt out but will “jump from the page”, apparently. The book is big on popular psychology, particularly positive thinking and the importance of identifying goals.

Hill’s style is rambling, with lengthy diversions on telepathy and the “transmutation of sex energy” — something apparently achieved by the author’s namesake, the French Emperor. The tone is old-fashioned and some of the specific advice is out of date.

Expert’s verdict
Jason Witcombe, of Evolve Financial Planning, says: “We start with the premise that everything is possible. Clients come to us in a financial mess because they don’t know what they want from life. Any book that makes you think about that is a good thing.”

Times Money rating: 2 stars

The Naked Trader by Robbie Burns
Harriman House, £12.99
The cover of this 2007 edition sets the laddish tone, showing the author naked at his laptop.

Burns says that anyone can make money trading shares. He explains how by outlining the mechanics of trading online and listing “winning strategies” and rules, with the classic caveat: “Only play with money you can afford to lose.”

Much of the other advice is conservative, too. For example: “My research involves finding out everything I can about a company before I consider buying.” He does offer some more original tips, such as to consider shares in companies moving up from an AIM listing to the main stock market.

Expert’s verdict
Mr Ghadially has doubts about “anyone” being able to make significant sums in the markets. He adds: “If he had a ‘system’ to make easy money, he would not be writing books.”

Times Money rating: 3 stars

How to Spend Less Without Being Miserable by Richard Templar
Pearson, £9.99
This is another book that is written with the recession in mind and offers 100 money-saving tips. These range from the very general, such as “get organised” and “remember the glass is half-full”, to specifics such as suggesting that you go out later in the evening to reduce your beer bill. Some suggestions are a little extreme. For example, readers are advised to fill old jars and bottles of premium-brand products with supermarkets’ own-brand alternatives to trick fussy loved ones into eating them.

The theme is lifestyle, rather than broader personal finance, so there is no overlap with Bannatyne’s book. Overall, the advice is uncontroversial, but may irk readers who are already fairly savvy. For example, a reviewer at Amazon.co.uk writes: “There is absolutely nothing in this book to justify its existence. It is full of banality, such as do not shop when you are hungry and use any vouchers you might have. This must be some kind of joke. Avoid at all costs.”

Expert’s verdict
Mr Witcombe says: “Your grandma told you ‘look after the pennies and the pounds will look after themselves’. It’s not true. You have to look after the pounds first — addressing big issues such as debt. It’s good to reduce day-to-day spending by cutting out things such as coffee, but do not put off going for a drink with friends. You won’t be happy and that impacts on everything, including your finances.”

Times Money rating: 2 stars

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