Many Americans are struggling mightily with their personal finances right now. We aren't saving enough for our retirement, and our knowledge of investing basics is poor.

Recently, we learned from an SEC study on financial literacy in the United States that "American investors lack essential knowledge of the most rudimentary financial concepts." We also know that the condition of our retirement portfolios is downright anemic. The Washington Post reports that "53 percent of American workers 30 and older are on a path that will leave them unprepared for retirement." And just 14% of American workers, according to the Employee Benefit Research Institute, are very confident they will have enough money to live comfortably in retirement.

How is it possible that we have ended up in such a sorry state, especially when it seems like there's more financial advice targeted at ordinary investors than ever before?


This is the question that Helaine Olen attempts to answer in Pound Foolish: Exposing the Dark Side of the Personal Finance Industry. Readers of this book will find her central argument very persuasive, though some will likely be turned off by her politics.

Make a million by quitting lattes
Olen believes that the personal finance industry has misled Americans into thinking that anyone can become rich, if only he or she has the discipline to give up lattes and other minor luxuries, while also possessing the foresight to invest in the latest "can't-miss" financial scheme.

Sadly, what most personal finance and investing gurus had to offer over the past decade was no match for "stagnant salaries, income inequality, and a society that offered a shorter and thinner safety net with each passing year," Olen says. Ultimately, the biggest winners from the ever-growing proliferation of financial advice were the gurus themselves. The rest of us, according to Olen, saw our financial situations become increasingly precarious.

Olen presents compelling evidence for her view that the overall economic environment is deteriorating for ordinary Americans. She notes, for example, that spending on housing, health care, and education represented 75% of the average family's discretionary income in the 2000s, as opposed to just 50% in 1973. Meanwhile, median household income fell by 7% between 1999 and 2010, and the nation's median net worth dropped by 38.9% between 2007 and 2010. In the face of such big trends, most financial advice is powerless, according to Olen.

A sucker's born every minute
Oblivious to the big picture, Olen says, personal finance gurus, like Suze Orman, Dave Ramsey, and Robert Kiyosaki, continue to peddle their dubious schemes en route to amassing colossal personal fortunes. Of Orman, Olen writes that she didn't earn her money "by investment savvy or astute savings strategies but by convincing many of us that we were so helpless we needed the help of her books and product lines."

Olen is indefatigable in taking on this rogues' gallery of personal finance gurus, one by one. For example, her takedown of Kiyosaki, the founder of the Rich Dad, Poor Dad empire, is simply devastating. She tells us about all of the bizarre stories surrounding the Rich Dad's actual identity. At one point Kiyosaki addressed the confusion by saying, "Is Harry Potter real? Why don't you let Rich Dad be a myth, like Harry Potter?"

Olen's take-no-prisoners approach to the various personal finance gurus can feel a bit heavy-handed at times. Summing up her profile of Orman, Olen describes her as "the ultimate saleswoman who has gone from selling subpar pancakes to peddling financial platitudes." At times, it feels as if people Olen doesn't like are either fools or charlatans. And the ones she admires - like Massachusetts Senator Elizabeth Warren and retirement expert Teresa Ghilarducci -- are wise and saintly.

Starting a conversation about money
Some readers might strongly disagree with Olen's politics. She admits that she is sympathetic to the Occupy Wall Street movement, and believes that the government should be the "backstep enforcer of everything from the rule of law to insurer of last resort." Personally, I think that politics lurks behind most financial discussions (no matter how much we protest to the contrary), so I didn't mind her stridency. I can see why many folks, however, might be skeptical of her view that we need some sort of big-government solution to many of our personal finance woes.

This isn't a perfect book, but it's a very, very good one that I highly recommend to anyone who is interested in personal finance and investing. Olen presents an extremely compelling thesis, which is backed up with a lot of quantitative and qualitative evidence. She's also a gifted storyteller with a highly engaging writing style.

And even though she can be harsh at times in her treatment of the financial gurus, I came away feeling that she cares deeply about ordinary Americans who are struggling at this moment in a very tough economic environment. Her heart is in the right place, and she is wise to conclude that "all things will become possible" if we can begin an honest conversation about money.

If you're behind in saving for your retirement, you might be interested in our free report: "The Shocking Can't-Miss Truth about Your Retirement." To learn more, simply click here

The article How the Personal Finance Industry Is Failing America originally appeared on Fool.com.

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