It is no secret that most Americans suffer from a lack of proper financial education. The statistics on individual debt and lack of savings are truly shocking. The good news is that today there are plenty of great resources for getting a basic understanding of personal finance. How Money Works: Stop Being a Sucker by Tom Matthews and Steve Siebold is precisely that.
How Money Works is a brief, colorful introduction to personal finance. And it must be stressed that it is an introduction. At 128 brightly and cartoonishly illustrated pages, the book covers a lot of ground but is written like a textbook. This is by no means a problem, but it should temper your expectations.
The first few pages introduce you to a diverse cast of characters, from George the 67 year old retiree to Hector the young small business owner. Each has a quirky illustrated avatar that engages in question and answer dialogues with the authors of the book. This is mixed in with more in-depth coverage of such topics as compound interest, the rule of 72, and indexed universal life insurance. There’s definitely some solid material covered in the book and covered well, but it can also come across as very hokey.
It is best to approach the book as a primer, something marketed towards a younger audience to teach them the best practices of personal finance. Older or more experienced readers may also glean a thing or two from the book. But it will depend a lot on individual tastes whether the cartoonish presentation comes off as palatable or saccharine.
Even if it’s not for you, however, the absolute worst that can be said about How Money Works is that it is very basic. But that may be just what many people across the country and the world need. It can be thought of as an alternative or supplement to the “rice and beans” mantras of Dave Ramsey.
Overall, How Money Works is definitely a good place to start thinking and reading about finance, especially if you have no background in the subject. The book’s little exercises and question and answer style also make it an effective educational tool. The seven steps to summit financial security is a particularly useful exercise.
How Money Works: Stop Being a Sucker is available for purchase here.