The past year has not been nice to the investing public. The financial crisis, extreme volatility in oil prices, and other economic issues have caused the stock market to tumble, wiping out thousands of dollars from portfolios large and small. Some individuals feel they have a knack for choosing tomorrow's winning stock and one woman is so confident in her Wall Street Midas Touch, she has written a book and operates a web site dedicated to choosing winning investments. The book is titled Put Your Money Where Your Heart Is: Investment Strategies for a Lifetime of Wealth, an investment book by Natalie Pace.   
 
Basic Contents of This Book:

This 250- page book is divided into the following sections:

Preface: An Enthusiastic Recommendation from a Nobel Laureate
Foreword: Becoming a Conscious Conduit of Financial Energy
Introduction: Make Love With Your Money
Part I: Get Educated
Part II: Get Involved
Part III: Get Savvy
Part IV: Get Rich and Stay Rich
Afterword: The Path to Wisdom
Appendix: Free Investment Club Startup Kit
About the Authors
 
This investment book presents four sections that feature different aspects of investing and it starts, appropriately, with a section about investment education. This opening chapter begins with Natalie talking about her own life and how her divorce helped lead to her new career as an investor. She then offers her own formula for choosing the best performing investments and advises investors to pick companies that they know and love rather than supporting just any old company for the sake of making a quick buck. She also makes mention of some hot industries in which to invest and talks about some of the important financial data to investigate before investing in any company.

Part II then talks about what to do with your money. Starting with some advice on the proper allocation of one's monthly take home pay, this section then moves on to talking about broker selection, the benefits of joining an investment club, and socially conscious investing that avoids buying stock in companies with questionable ethics.
 
In Part III, this book jumps around a little, talking first about some common investing terms (like P/E ratio, small cap stock vs. large cap, etc.) and then talking briefly about options. This section then goes off on tangents and discusses the Enron disaster, ways to tell that a CEO is using your money against the best interests of the business, investment strategies during natural or human- caused disasters, and common investment mistakes.

Part IV of the book deals with ways to better ensure that your wealth doesn't decline. It offers some simple advice on the perils of loaning money to family members, establishing a stock trading strategy, and the considerations to make when deciding on a specific company and/or country in which to invest. The book ends with an appendix that directs readers to the author's web site.

Final Thoughts:

Investments have certainly taken a hard hit in the past year. Investment values were already starting to slip, but once the financial crisis hit, the stock market was practically in a state of free- fall. Most everyone- from mutual fund owners to active stock investors- sat by helplessly as their portfolios lost a good deal of value. Even some of the best investment managers could only cover their eyes and wait for the crisis to subside.

Because the financial news has been mostly negative in the past year, it isn't surprising that many newer authors have been touting their own investment plans. Some of these authors have taken a conservative approach that moves a larger percentage of investments into cash and other safe areas. But others feel they have a special gift for choosing stocks, even in times of crisis. Natalie Pace easily fits into the latter category. She wrote this book to show that you, too, can find the right companies in which to invest by taking a slightly different approach than that commonly offered by other investment professionals.

What makes Natalie's plan so special? Well, most of what she talks about in this book is really nothing new. It makes sense to buy low and sell high, and seeking out companies who are leaders in their respected businesses and loved by their customers is also a sound strategy for choosing an investment. Where Natalie Pace moves in different directions than other financial professionals is with her advice on investing in things you love and with her advice on how to allocate your income among different categories. Her first piece of advice is to invest in what you love. Her theory is that the things you love and enjoy most are going to make great choices for investing because, if your heart is already in the right place, then great things will follow.

With personal finances, she again takes an approach that is very different from other investment professionals. She recommends dividing money up as follows: 10 percent to charity, 10 percent to education, 20 percent toward entertainment and fun (divided equally between present fun and future, larger levels of fun, like expensive vacations), 10 percent on investments, and 50 percent spent on ALL living expenses (debts, food, gas, clothing, and other essentials). Instead of paying the bills first, she recommends the opposite: Spending the money on yourself first, and paying the bills and essential expenses last. Her feeling is that everyone should invest and have fun. The bills will get taken care of in due time, so they are not worth worrying about. And if living expenses are presently greater than 50 percent, then an individual should immediately begin to downsize and take the necessary steps to cut debts or increase income so that they can fall below the 50 percent threshold.  

Natalie Pace is certainly enthusiastic as she writes and she does seem to have a genuine desire to help others succeed. But the advice in Put Your Money Where Your Heart Is cannot be taken completely seriously by most individuals. Let's start with the piece of advice in the previous paragraph. I can agree that her formula for spending and saving is certainly one that would make most people feel very happy and content. But it seems a little unrealistic to me. Most people already spend more than 50 percent of their take home pay on basic expenses and there is little or no way to reduce these expenses very much. Most would have a tough time falling below this 50 percent level either through increased income or debt/expense reduction. But the author makes it sound relatively easy- like anyone can do this. She doesn't offer an alternative plan, so I can only assume that she is sticking to her plan and her theory that anyone can adjust their lifestyle to fit this allocation model. She mentions, for example, moving into a smaller home or getting a roommate to share expenses, but these options are not practical for every person. I also question her advice on giving 10 percent of pay each to education and charity. This sounds good, and there are many charities that would greatly benefit if everyone were this generous. But this seems like a little bit too much to me. I don't know many people who can afford to part with ten percent of their income for education and another ten percent for charity. Most families would have to take the money from essential living expenses if they tried to accomplish these goals.

In addition to the problem I have with the advice on personal finances, some of the material in this book is over- simplified and a little misleading. For example, in one section the author is talking about what an investor with one hundred thousand dollars in debt should do if they inherited one million dollars. One could pay off the debt, but Natalie recommends that instead the person invest the money because if they can earn ten percent (which is pretty easy to do), they would gain one hundred thousand dollars which could then be used to retire the debt, leaving the one million dollar principal intact. This is misleading, of course, because it fails to consider the interest on the debt. In reality, considering how high the interest rate is on the debt, most people would actually be better off paying off the debt first and then investing the remainder.

In yet another example, Natalie talks about buying stock low and selling high and she suggests that the stock you buy because you think it has reached a low point is the stock someone else is selling because they feel it has peaked. This is misleading once again. While it is true that most investors try to buy low and sell high, people actually buy and sell for different reasons. One investor might be in great need of cash and so he/she sells shares knowing well that they could rise higher still. Another person might feel that a certain stock is going to continue to increase in value, but sells anyway because an even better stock is offering more promising returns. To try to say that everyone who sells is dumping stock that they feel has reached a price peak is simply not true. They are many reasons why people sell and, likewise, multiple reasons why people buy.

Another thing I do not like about Put Your Money Where Your Heart Is would be its tendency to scatter its material. One moment, the book is talking about options investing. Then, it is giving a rundown on the warning signs that Enron was up to no good. Then, it talks about investment in times of war and terrorism. Some more continuity and organization would have made this a better book. It would also benefit from some more specific guidance on investment choices, and how to make the best possible choices.

In spite of the flaws mentioned above, there are, however, some good things mentioned in this book. I like the author's advice on having fun and not pinching pennies when it comes to enjoyment. I also agree that many people have over- extended themselves when it comes to properties and other expensive assets and they probably should try to cut back. What I don't like is how the author makes all of this sound so easy. If it was really this simple, I think people would already be doing many of the things she mentions in the book.

Overall, Put Your Money Where Your Heart Is: Investment Strategies for Lifetime Wealth is a book with some good advice combined with some misleading statements. Investing in what you are passionate about does not guarantee great returns and the financial talk in this book seems to be a little too geared toward emotion than practicality. Still, I found enough useful material to give this book a three star rating. It isn't the best book in its class, but it does offer some good general tips on investments and other related topics.    

Recommended: Yes