WASHINGTON -- I rarely think in shades of gray when it comes to personal finance issues.
Yet because personal finance is so personal, some experts are leery of telling people, without any equivocation, what to do with their money. But offering a long list of pros and cons often leaves people unsure of what to do. My goal is to never leave you on the fence.
It's for this reason that I'm recommending "Worth It ... Not Worth It?: Simple & Profitable Answers to Life's Tough Financial Questions" by Jack Otter (Business Plus, $19.99) as the July selection for the Color of Money Book Club.
Otter, the executive editor of CBS Moneywatch.com, shares my aversion to shades of financial gray. Everyday, he writes, we face questions about our money. Most of these questions, he believes, can easily be answered.
"I'm not suggesting it's easy to get ahead financially," Otter notes. "What I am telling you is that there are right and wrong answers to most of the financial decisions life throws at you, and given the necessary information it's fairly simple to figure out which is the right call. Money is a very emotional subject, and we often get tied up in knots when wrestling with financial questions."
I love how Otter tackles common financial decisions in a "do-this, not-this" format.
-- Save for retirement now or later? "I know that in your 20s you feel as if you have no money, but consider this: You have no mortgage, no children, and before you know it, neither of those things will be true. Last year I made 13 times the salary I was paid for my first job. And my disposable income? About the same. ... Put a little cash away. Your 65-year-old self will thank your 25-year-old self."
-- New or used car? "A car loses a whole lot of value in its first two years of life, and the smart-money move is to let someone else pay that depreciation."
-- Buy or lease a car? "Buying a car is a better deal than leasing. ... Leasing a car is like always going to the more expensive restaurant, or making sure you never, ever, pick up an item at the sale price."
-- Stock or mutual fund? "It's no contest: mutual fund. Reasons not to buy individual stocks: The deck is stacked against you. Institutional investors, with their human and computer armies, constitute about 70 percent of the volume of the New York Stock Exchange. That means the guy on the other side of the trade knows more than you do. (And even he usually can't beat the market.)"
Copyright 2012 Washington Post Writers Group