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Book Review: The Secret Language of Money

How to Make Smarter Financial Decisions and Live a Richer Life

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The Secret Language of Money
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The Secret Language of Money is a light, easy read with some good advice if you can stomach the pop psychology approach. What David Krueger and John David Mann have done really well is make the very serious work of learning how to make better financial decisions entertaining.

The Money Story Is an Idea That Resonates

The intent of The Secret Language of Money is good (to enable people to make wiser financial decisions) but the execution is off-putting. The authors' insistence on illustrating almost every point with one or more real life examples and breaking all the text into web-worthy snippets becomes irritating.

As a reader who immediately buys into the primary assumption that money is not just money but something we all imbue with personal emotional significance and that we all have our own money stories, I don't need all the psychological explanations; I just want the authors to get to it; how do I change my money story if I want to?

As you would guess, the pages of psychological explanations are wasted on me. I think we generally spend too much time looking for neat ways to rationalize our behavior, especially behavior that is stupid, antisocial, or selfish. And here’s a whole bunch of handy explanations all in one place. I bought that 60 inch plasma TV because Mom always loved you best. Woe is me. Sigh.

Sometimes, Freud said, a cigar is just a cigar. And sometimes, I think, a stupid decision is just a stupid decision.

Valuable Insights About Money & How We Handle It

That's not to say that this book is not worth reading. There are valuable ideas here that a person can use to start thinking about their financial situation and learn how to make sensible financial decisions (rather than just letting our emotional, reptilian brains, as the authors put it, do whatever they want to do) and they’re presented in a very entertaining way.

For instance, throughout the book the authors provide quizzes and worksheets to help readers understand their own money stories and start making the changes to their money stories that will make them more successful. There are also plenty of checklists and guidelines that readers can apply to their own financial decisions, such as "Common Investing Pitfalls and Their Remedies" and "Guidelines for Establishing a Healthy Money Life". There are even money exercises for couples designed to get them talking about money and how each of them handles it.

Too Much Psychology?

But some of the book's chapters disintegrate into lists of psychological problems and prescriptions. After an entertaining description of the tulip mania of the sixteen century and Dr. Vernon Smith's trading experiments that showed how bubbles are created, Chapter 7 is a list of eighteen "common mental biases" that cause us to make bad financial decisions – which to me, was not only much less entertaining but rather a waste of time.

If your horses are gone from the barn, shouldn’t you go looking for them rather than standing around discussing how they got out?

To be fair, however, the book's primary author is a former psychiatrist so I suppose he would want to discuss the mental aspects of our financial decision-making process, and if you are like me, an impatient reader who just wants to know and apply the theory, the book is so well-organized that it's easy to do that.

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