This review was written several weeks ago, but I shelved it for fear of making anyone cranky. Things have changed. The Law of Attraction cultists are out in force, and they're gunking up my site with comment spam. Now I'm having my say — I'm fighting back.

The Secret is a best-selling motivational book (and DVD) published last fall. I didn't hear about it for a long time because I live in an intentional media vacuum. After a couple people recommended it, I read it. Twice. Not because I liked it, but because I can't believe that people still fall for this crap.

What is the "Secret" of The Secret?

The "secret" is the Law of Attraction, which is not actually a law of anything. The Law of Attraction states that your life is a result of the things you think about. From a psychological perspective, this notion has some merit, and if the book explored the existing literature and research on the subject, I might not be writing this review. Continue reading...

Several months ago I mentioned in passing that my wife and I keep separate finances. I promised to eventually explain why, and to discuss the pros and cons of doing so.

Our story

When I was a boy, my parents fought about money often. And loudly. They had joint finances, but it didn't seem to matter. Each accused the other of being financially irresponsible. (Both were right.) Their example left me disenchanted with the notion of mutual money management.

During the years Kris and I dated, we had our own accounts. From the beginning, I was a spendthrift and Kris was a saver. She always made smart financial decisions. Because my money was my money, and her money was her money, my poor choices did not drain her savings.

"I'm going for a walk," I announced to Kris at about 10:30 Saturday morning. Though it was cool and rainy, I needed some exercise. It's been a while since I made my three-mile stroll through the neighborhood. But before I could get out the door, I decided to change into warmer clothes.

I went upstairs and rummaged around to find the perfect pair of pants. I sorted through my sweatshirts, looking for my favorite. When I couldn't find it, I had to settle for second best. I put it on. Then I decided that the wind would be too cold on the back of my neck (I just had a haircut), so I pulled off my sweatshirt, put on a turtleneck, and then put on the sweatshirt again.

Now that I was dressed, I had to find my shoes. My lawn-mowing sneakers were by the front door, but I couldn't find my walking shoes. I eventually found them in my office. I put them on. I grabbed my iPod from the kitchen table. My gloves were there, too, and I paused for a moment to debate whether I needed them. I decided against them.

Sabino sent me an MSNBC article about the unfolding subprime lending crisis. The piece provides a glimpse at the deceptive practices used to prey on people like Kerrie Russo, who chose to refinance her mortgage on a promise of lower payments. When she failed to read her loan documents closely, she found herself deep in expanding debt. Though the mortgage broker lured her into this loan, she signed the papers. Because she didn't know how to protect herself, she faces a financial crisis.

Learning to avoid problems like this is an essential component of financial literacy. It is your responsibility to protect your money. Here are seven skills that can keep you safe from hucksters:

1. Ignore anything that sounds too good to be true

There are no short-cuts to wealth. If the son of a deposed Nigerian bureaucrat e-mails you offering to pay $100,000 for a few hours work, you know you're being scammed. Beware of similar deals on a smaller scale. If a mortgage broker tells you that you qualify for a more expensive home than you expected, double-check her figures with another broker, or with an on-line calculator.

I've accumulated $3500 and I don't know what to do with it.

As you may recall, I am carrying the remainder of my credit card debt in the form of a home-equity loan (or HELOC). The current balance on this debt is $15,000 and I'm paying a 9.25% finance charge. I intend to have this debt eliminated by March 2008. It's an ambitious goal.

In order to make this happen, I've had to forego investing in my Roth IRA. I established this retirement account last spring, but only put $650 into it before focusing on the HELOC. Now I have the money to fully fund it, but don't know whether to do so, or to continue attacking the debt aggressively. There's a time-pressure to this decision: Roth IRA contributions for 2006 must be completed by April 17th.

I've made great progress with my personal finances over the past year. I am paying off debt. I established an emergency fund. I even opened a Roth IRA. But I'm not out of the woods yet — I still do stupid things from time to time.

Spending for the sake of spending

For example, I just returned from a trip to the bank. I deposited a couple of checks which caused my balance to increase to what, for me, is an enormous sum. (Next week I'll share my dilemma over what to do with this money.)

Rather than come directly home, I had to stop at the comic book store. This isn't necessarily bad. I've been training myself to buy only comics I genuinely want, not to buy for the sake of buying. Today there wasn't anything that I had to have. I should have left empty-handed. I didn't. Instead, I found a couple of books that looked mildly interesting. I spent $50. Continue reading...

Cap at Stop Buying Crap recently asked: "When did you start caring about your finances?" This is an interesting question. I've always believed that my finances were important to me, but I never actually acted on this belief until a few years ago.

My parents set poor examples for managing money. In high school, I ignored the mandatory personal finance class. When I was offered credit cards in college, I signed up, and I used them, and began a lifestyle of debt. For the first few months after college, I was in a lousy job, and felt lucky to have a credit card with a $10,000 limit. I maxed it out buying clothes and paying for hotels and taking cash advances for living expenses. I bought a new car.

By the mid-nineties I was deep in debt, but I didn't have the discipline to stop myself. I paid minimum payments. When my credit limits were raised (always a joyous day), I viewed it as a license to spend. In 1995 I got a $5,000 windfall. Rather than pay off my credit card debt — which had swelled to $20,000 — I bought a new Macintosh Performa 640CD DOS-compatible personal computer and loads of games to go along with it. I bought new clothes.

One of the most puzzling things about money is knowing where to begin. You get out of college and suddenly find yourself in the real world, with a job, with rent, with student loans, and wonder how you're going to make ends meet, let alone save for retirement. Retirement seems so far away. It's easy to just forget about it.

Ignoring retirement could be one of the biggest financial mistakes you'll ever make. Compound returns favor the young. Time is money. Invest now and your 40-year-old self will be grateful. But where do you start?

Frances Leonard's 1995 book, Time is Money, is an excellent introduction to retirement for people in their twenties and early thirties. Leonard preaches the important message: start now.

Ramit Sethi, author of I Will Teach You to Be Rich, recently shared his thoughts on a New York Times profile of Russ Whitney, a real estate mogul who charges thousands of dollars to learn the secrets of his success. (Whitney helped inspire Casey Serin's foreclosure odyssey. John T. Reed has extensive information on Whitney, not all of it negative.)

Ramit's post prompted me to read the original New York Times article. I began the piece planning to offer my own criticisms of Whitney and his get rich quick schemes. But two-thirds through the article, I realized there were actually two stories here: one about Whitney's brash hucksterism, and another about the people — like Casey Serin — who are so desperate to get rich now that they lose touch with reality.

Midway through the article we meet Tracie Taylor, who is leading Millionaire U, a three-day real estate training course for "advanced" students. Most of the students don't actually know much about real estate, so Taylor is giving them the basics. She's also touting goals, positive thinking, and visualization (all excellent tools when used correctly).

On Monday I mentioned that it pays to shop around for the lowest price. This skill is specially important when making large money decisions. You should always shop around when purchasing a car, obtaining a mortage, or hiring a contractor. We've discussed getting the best deal on a car before. We've touched on mortgages, and are sure to discuss them more in the future. Today I want to share my approach to finding a contractor.

The New Roof

We bought our first house in the spring of 1993. The roof was in bad shape and needed to be replaced before we could close the deal. Fortunately, we had a good working relationship with the seller: he offered to grant us a $2,000 credit if we would take care of finding a roofer.

I had never done anything like this before, nor had any of my friends. I looked in the phone book and found a local roofer. When I called, he could sense that I was confused, so he talked me through the process, asking about the size of the house, the slope of the roof, the material we wanted to use, the condition of the existing shingles. He gave me a quote of $2300.