Book Review: Real Money: Sane Investing in an Insane World by Jim Cramer

People love or hate Jim Cramer. There doesn’t seem to be a middle ground on the guy. Either Mad Money is the greatest show on earth, or it’s horrible. It reminds me of the sentiment fans had for Dale Earnhardt, Sr., Bobby Knight or Hillary Clinton, there’s just nobody out there with a “eh, he’s okay” opinion of Cramer. Put me in the Cramer camp. Although I’m not a regular watcher of Mad Money, I do enjoy it when I catch it. Cramer makes finances fun, which is tough to do for most people. He’s also one of the most honest financial people that I’ve read and watched. Seriously, watching a guy throw a chair across the room before talking stocks is entertaining. If I can learn something while being entertained, even better.

In the interest of keeping my sanity, I’m going to do all of my book reviews within three paragraphs. What the book was about, why I didn’t like it and why I liked it. Simple enough.

The gist of it - Real Money: Sane Investing in an Insane World is Jim Cramer’s second book, but the first book where he actually discusses the techniques of making money in the stock market. Just a warning though, this book is for people that want to take an interest in investing. If you can’t or won’t do an hour of homework per stock, per week then Cramer is happy to show you the Mutual Fund door. He teaches the basics of stocks and shows how to make a decision when buying or selling. (It’s all about the homework.)

Why I didn’t like it - It’s tough to pick negatives, since I really enjoyed the book. However, Cramer focuses on Buy & Homework instead of Buy & Hold. That might be a better definition of how the average trader should look at things, but he fails to point out there are other reasons for investing in stocks, like reaping the cash benefits of dividends. He also claims that $2,500 will get you started, but if you follow his diversifying advise, you really need closer to $10,000 to start a portfolio.

Why I liked it - Jim Cramer has a knack for putting financial terms into plain English. For the first time, I understood how and why stocks behave like they do. In fact, I felt a bit stupid for not understanding the concepts sooner, but I thank Jim. He also is the first “stock guy” that has flat out said that a lot of stocks on a daily basis, and especially securities, are exactly the same as gambling. That puts the risk into perspective for people that have been taught that everything is fine as long as they buy and hold.

I look forward to reading his newest book, Mad Money: Watch TV Get Rich.