Diana Clement: Your guide to making a pile

Millions of successful investors worldwide began investing after curling up with a good book on personal finances.

Surprisingly, the best seller at the specialist Good Returns Bookshop is Slash Your Taxes Now!, by Peter Sibbald. Sibbald's book has certainly saved me hundreds of dollars, but it isn't my favourite. That honour goes to the Motley Fool series of investment guides.

With so many personal finance books to choose from, which one should you go for? To give you a helping hand, the Herald asked some of New Zealand's financial gurus to name the books that taught them about money.

Buffett: The Making of an American Capitalist (Main Street Books), by Roger Lowenstein $40.99

* Recommended by Jeff Matthews, senior financial adviser at Spicers Wealth Management.

"Buffett: The Making of an American Capitalist shows if you are pretty smart and you work hard then all things are possible," says Matthews. "I've read it five or six times and it reconfirms to me that there is no such thing as a free lunch. There aren't any easy ways to make money quick. You need to be in it for the long haul.
"This book is a story about the world's greatest investor," says Matthews. "Warren Buffett's father lost his job and savings in the 1930s Great Depression.

"From an early age, Buffett was obsessed with money-making. His favourite book was One Thousand Ways to Make $1000, which was a lot of money for the 1930s."

By the 1950s, Buffett was managing hundreds of thousands of dollars for friends, family and other businesses. Today, shares in his company, Berkshire Hathaway, sell for US$82,700 ($123,000) each, says Matthews.

"Apart from learning about his investment strategies and some of his great investments, the book gives a great insight into a man who, despite his great wealth, lives in the same modest home he bought in Omaha in 1958 for $31,500.

"Buffett has remained a man of integrity with an honest and unassuming touch."

One Up on Wall Street, by Peter Lynch $34.99

* Recommended by Carmel Fisher - managing director of Fisher Funds Management.

"I often cite One Up on Wall Street as the most important investment book I have read," says Fisher, "largely because I read it at an important time in my career." Fisher had an accounting degree under her belt and knew the theory, but lacked first-hand knowledge from portfolio managers who had actually beaten the market.

"I then read One Up on Wall Street and it put the theory into perspective for me. I have found that many of Lynch's investment golden rules have become entrenched in my own investment philosophy.

"While Lynch and [fellow guru] Warren Buffett operated in the US share market, which has some significant differences to the New Zealand market, much of their investment philosophy represents common sense and wisdom achieved from decades of hands-on experience, useful for investors the world over."

In One Up on Wall Street, says Fisher, Lynch argues that investors should stick to what they know, and that the only way to beat the market is by ignoring the herd and investing in companies you understand.

Rich Dad, Poor Dad (Warner Business Books), by Robert Kiyosaki $32.95.

* Recommended by Lisa Dudson, financial author.

Rich Dad, Poor Dad is probably the most successful personal finance book of all time. What Dudson likes about the book is that it tells readers how to go about getting a financial education and why they should. What's more, it exposes myths such as getting a good education will make you wealthy.

The book focuses on what the rich teach their kids about money - that the poor and middle class do not. Kiyosaki's own father, although middle class, was always poor. His best friend's father was rich and Kiyosaki studied the man's strategies and turned them to his advantage.

"Getting a financial education is such an important thing for New Zealanders and this is why I like this book so much," says Dudson. She is also a great fan of The Cashflow Quadrant, by the same author.

The Naked Leader Experience (Transworld Publishers), by David Taylor $27.99

* Recommended by Craig Paddon, New Zealand Property Investors' Federation president.

Craig Paddon came from a property investing family and learned the tricks of the trade from his parents. However, he believes there's always room to grow as an investor and reads self-help-style books to improve his investing skills.

"I have come across a lot of people who have read a lot of investment books but haven't gone through with any investments. They are looking for the next book and the next book," Paddon says.

The Naked Leader, says Paddon, includes tips, strategies and guidance for changing your life. Each chapter can be read alone or the book as a whole. The book helps a would-be property investor or share market investor turn talk into action. "The book helps you put systems in place to go out and start [investing]." Paddon, a lawyer by day, has also found it beneficial for the running of his business.

More Money, Less Debt! (Consumers' Institute), by David Hindley and Grant Harris $19.95

* Recommended by Raewyn Fox, chief executive of the NZ Federation of Family Budgeting Services.

This is a no-nonsense, idiot-proof guide to getting out of the red fast. Most people have debt - be it mortgages, credit or store cards, hire purchase, car loan and so on. Debt can be used to improve your lifestyle, but when it gets out of hand, here's a book to turn to.

The book covers everything from strategies to exit the red, freeing up extra cash, borrowing to invest, dealing with debt collectors, your legal rights, where to get help, and more.

It is written in easy to understand language and gives practical advice which can benefit anyone who has, or may consider having in the future, a loan, mortgage, credit card, student loan or any other form of debt.

"The advice in this book very closely resembles the advice our budget advisers offer and would benefit people who feel they could manage their financial affairs well themselves if pointed in the right direction," says Fox. "It also includes a section on who to turn to if you find you do need help."

In an Uncertain World (Random House Trade), by Robert Rubin $35.99

* Recommended by Michael Cullen, Minister of Finance.

"The book I am most enjoying at the moment is by President Clinton's former Treasury Secretary, Robert Rubin," says Cullen. "It is eerily reminiscent of the debate going on in New Zealand."

One of the architects of the longest and most successful boom periods of the 20th century, this book reviews Rubin's career and offers a world economic preview.
The book covers the author's 26 years at investment bank Goldman Sachs and his time as Treasury Secretary. It explains complex political events of recent history in lay language.

"In both countries, the centre-left parties [Labour, the Democrats] are defending fiscal responsibility and the long-term interests of the nation against the obsession of the centre-right [National, the Republicans] with tax cuts. Rubin's arguments are overwhelmingly convincing," says Cullen.