A former financier looks at two best-sellers. (evaluation) Ken Uston.
Managing Your Money
It is truly a pleasure to work with Managing Your Money. This program is without exaggeration the easiest-to-use program I have ever encountered nand I have tested hundreds over the past year).
MYM is also fun to use. The investment expert, Andrew Tobias (author of the best-selling book, The Only Investment Guide you'll Ever Need), wrote all of the text for this program. Tobias's breezy, humorous style is refreshing and reassuring ("the first thing you need to know is that there is practically no way you can screw things up . . . . . ")
MYM does far more than simply perform the conventional home finance functions of keeping a budget and balancing a checkbook. It tracks net worth, evalutes life insurance needs, calculates gains and losses on investments, suggests income tax strategies, and even prints out your IRS Schedule D. MYM can also be used to calculate tax shelter and rental property rates of return. Managing Your Money is designed to be used without a manual; all the information you need is on the disks. Many software pwackages make this claim, but MYM actually succeeds.
MYM is a set of seven inter-related programs. You have the option of using some or all of the programs. The seven are: Reminder Pad, Budget And Checkbook, Income Tax Estimator, Insurance Planning, Financial Calculator, Portfolio Calculator, and Your Next Worth.
MYM also has an index, which has such interesting references as Fake disks For cocktail Parties ("if you want to show your friends how the program works without letting them see how rich you really are . . . or aren't . . . just make up a new set of disks and fill [them] with harmless understatements or exaggerations. When guests come, you can pretend you left the machine on by mistake.").
What I particularly enjoy about MYM is that it is just about impossible to get lost while using it. Nearly every time you have to do something, the options are listed at the bottom of the screen. For example, when you are asked for your "financial station," you have several choices, including Forbes 400, Wealthy, Rich, Well Off, Comfy, getting By, Pinched, Squeezed, Squirming, and Bereft.
The program is chock full of interesting information--some of it totally off-the-wall, such as a list of U.S. presidents and their cause of death (did you know that George Washington died of acute laryngitis, and both Thomas Jefferson and James K. Polk were done in by chronic diarrhea?).
Once you enter information for one section of MYM, the other sections automatically pick up that data. For example, if you write a $75 check to the Red Cross, the tax program knows that you have a $75 deduction, and the net worth program knows that you are 75 bucks poorer.
Following are descriptions of the seven programs.
Reminder Pad. You enter all important annual events (birthdays, anniversaries, etc.) just once. They are automatically updated so that you will be reminded of them every year for the rest of your life. One-time reminders, which disappear after the date on which they occur, can also be entered.
You are also given a "warning day" option. For example, if you entered a November 15 reminder with 1k warning days, the reminder would start appearing on November 1. An annual reminder would start appearing on November 1 of each following year.
MYM also generates its own reminders, such as when your stocks are approaching long-term capital gain status, or when they have achieved your price objectives.
The reminder pad also gives you advice with periodic little gems, such as, "There is no dignity quite so impressive, and no independence quite so important, as living within your means."--Calvin Coolidge.
budget and Checkbook. This section can be used to make cash flow projections, make a personal budget (optional), print checks, and keep track of expenditures by category. It is about the easiest and most comprehensive budget and checkbook program I have seen. It has dozens of pre-defined budget categories, which can be easily augmented or deleted.
Checks and window envelopes can be ordered so you can print checks and avoid addressing envelopes.
Income Tax Estimator. This program takes information from elsewhere in the program, asks you for additional detail, and tells you where you stand with the IRS at any time during the year. You can also enter hypothetical information to answer "what if" tax questions.
Life Insurance Planning. This program tells you how long you are likely to live, calculates how much life insurance you need, and tells you how much the insurance should cost.
In the life mortality sections, you enter your age, overall health, lifestyle ("homebody," "average," or "wild"), the percentage of time you use auto seat belts, and other factors. The message you receive looks something like this:
"You odds of dying this year are less than 4 in 1000. Your life expectancy is about 39 more years for a total of 78 years. Even so, you may need life insurance. To see how much, press F2."
Financial Calculator. This program is basically a pocket calculator with helpful prompts. It also helps you plan for retirement. Because MYM makes it so easy to compute the value of future savings and payments on loans and annuities, you are motivated to consider these factors and thus become a better financial planner.
The retirement program factors in such variables as taxable savings, pension plans, IRA and Keogh holdings, inflation rates, and your income tax bracket. It also offers gentle advice such as:
"It's not a cinch to outpace inflation by even 3% over the long-run. You have chosen yields that outpace your inflation assumption by more than 5%. We hope you're successful, but if you wish to change your entries, do so now".
the Portfolio Manager. This section keeps track of your investments. If you don't own stocks and bonds, but want to see how you would do with a hypothetical investment fund of, say $100,000, MYM will analyze your portfolio.
Your Net Worth. This program draws from all the other information in the program, asks you additional questions, and calculates your net worth.
Thus if you happen to need a statement of net worth for a bank loan or whatever reason, one quick print-out, and you are in business.
Summary
If you've been thinking "One of these days, I've got to get my finances in order," MYM just might be the program that will finally get you organized.
You will have to devote a few hours to getting started, and you'll need the self-discipline to put in an hour or so every week or two. But if you do it right, not only will you be able to save on taxes and other expenditures, but you could also do a much better job of providing long-term security for yourself and your family.
And you can use the program without fear. As MYM reminds us, "Remember, you can do almost nothing wrong. So don't be afraid to experiment. If you hit a wrong key, your machine will simply burp and wait for you to hit one that makes sense."
You Personal Net Worth
The objective of Your Personal Net Worth is to do what Managing Your Money does, but in a totally different way. For one thing, NW stresses that you must read the manual. Unfortunately, the manual is like an accounting textbook, full of big words, accounting jargon, flow charts, and chart of accounts.
NW is also a series of several interrelated programs that keep track of your bank accounts, your budget, and your investments and savings. You are provided with income statements, statements of net worth, a report of your credit card activity, a stock portfolio, and an inventory of your personal belongings.
Getting started with Your Personal New Worth is like studying for an accounting exam. You have to learn about things like temporary journal files, basic financial modules, and posted history files.
There are dozens of pre-assigned budget and other accounts, which are helpful. NW even has categories set up for American Express, Visa, and MasterCard. Also nice (if you happen to have a color monitor) is that the screens appear in living color, and you can easily change the colors of the border, background, and headings to suit your personal proclivities.
The program has a helpful menu system, which, combined with the judicious use of function keys, makes it easy to move from one section to another. But making the entries is far more difficult than with MYM, and the resulting reports are less helpful.
NW has an on-screen tutorial, which is supposed to make things easier. But the information in it is dry and boring, with none of the humor or interesting side comments of MYM.
Although the tutorial is somewhat easier to understand than the manual, that is no solace, because you are told not to use this information in lieu of reading (i.e., studying) the manual.
You get a free copy of an abridged version of Sylvia Porter's New Money Book For the 80's (the original, we are told, costs $24.95). When I saw the 1975, 1979 copyright to the book, I was a bit skeptical of the timeliness of this book for the 80's. Then I noticed that the first printing was in November, 1980 and felt a little better.
The tutorial states that the purpose of NW is to "provide a comprehensive, integrated, menu-driven, home accounting application package that is easy to use." On a scale of 1 to 10, I would rate the achievement of these objectives as follows: * Comprehensiveness 5 * Integration 6 * Menu-driven 8 * Easy to use 3
In short, Your Personal Net Worth will do the job, but it requires lots of effort and getting used to, it is a real chore to set up and not nearly as helpful as MYM (which, in my opinion, rates 9s in all the above categories).
Products: Andrew Tobias' Managing Your Money (Personal finance software)
Your Personal Net Worth (computer program)