Finance Seminar

Abstract: I survey the advice given by the fifty most popular personal finance books and compare it to the prescriptions of normative academic economic models. Popular advice frequently departs from normative principles derived from economic theory, which should motivate new hypotheses about why households make the financial choices they do, as well as what financial choices households should make. I cover advice on asset allocation, savings rates, the advisability of being a wealthy hand-to-mouth consumer, non-mortgage debt management, simultaneous holding of high-interest debt and low-interest savings, and mortgage choices.