1001 Financial Words You Need to Know - Books in Brief - Brief Article - Book Review

HR Magazine, March, 2004 by Leigh Rivenbark

1001 Financial Words You Need to Know

By David Bach, Oxford University Press, 2003, 237 pages

List price: $17.95, ISBN: 0-19-517050-4

The woman just didn't believe David Bach, no matter how often he said it: You cannot buy an individual retirement account (IRA). She swore that she had "bought an IRA" each year for the past decade. Bach, an author and financial seminar leader, eventually convinced her that she hadn't bought any IRAs but had only invested in them. Her ignorance about how IRAs work had cost her money.

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That story illustrates why Bach wants readers to learn 1001 Financial Words You Need to Know. The sooner you understand what the terms mean, he says, the sooner you can start saving, making and moving money effectively.

This book is a dictionary of financial terms salted with pithy sidebars on financial topics including how to determine if you have a credit card problem, decide what insurance you need and understand your credit rating. Bach also explains the "latte factor" that shows how the $3.50 spent daily on a latte could turn into tens of thousands of dollars if invested instead. An item on the top 10 "money mistakes" nails speculation, credit card debt and 30-year mortgages as among the chief culprits sucking up money. A guide to choosing a financial adviser includes questions to ask and tips on checking advisers' backgrounds.

But the bulk of the book is the dictionary, with its brief definitions and examples of usage. Some terms, like IRA, are familiar but might be misunderstood, as the IRA "buyer" found. Other terms are new and unfamiliar, such as "Patriot bond," a specially inscribed savings bond, first issued in late 2001, that allows investors to "show their support for the nation's antiterrorism efforts."