November 15th, 2008 — Book Review
Douglas Andrew’s book targets the baby boomer generation and tries to convince them that it is not too late to become a millionaire and avoid living on soup kitchen handouts to survive retirement. That’s a pretty tall order and a lot of authors have failed at this exact same premise. While Andrew’s book is well written and contains some good advice, there is just not enough here to make it stand out from the other books in this overcrowded field.
The first part of the book is dedicated to the art of financial planning and if you can wade through it to get to the parts you really want to read – bravo. Personally, he spent far too much time covering this area and it started to feel a bit like filler halfway through. With a catchy title, most readers are going to want the goods pretty quickly and forcing them to sit through half a book of financial planning advice is not a good idea if you want them to stay connected.
He constantly stresses frugality and the importance of not consuming. Well – good luck with that. We all have to consume, and if we didn’t the economy would implode. I’m certainly not saying we should all throw caution to the wind and spend every last dime, but over-frugality doesn’t make much sense either. It’s the happy medium that counts when it comes to managing your finances, not the extremes.
Once he does finally get to the point, you’re treated to advice that you should rip your money out of its nice safe little IRA and throw it into life insurance investments. It doesn’t take long to wonder whether the author has a vested interest in this since the tone of the book shifts to a full on sales pitch. While life insurance investments can be useful, it’s certainly not a good idea to go blow your entire IRA on them. Another disturbing point is the fact that he acknowledges that tax laws for life insurance investments “may” be changing and he “thinks” that if you invest now, you’ll be grandfathered in.
I’m sorry but “think” is not enough to get me to cash in my IRA, thank you very much. While he does include some figures to illustrate his points, in my opinion, this is simply far too much to ask of any reader. In addition, while he did cover the importance of annuities, and other safe investments, there was no attention paid to the importance of having more than one source of income.
Baby boomers are being phased out rapidly from companies all across the country and many are finding that financial ruin is looming after being laid off. There is also a lack of advice on how to leverage debt (which is vital for readers that may not have plush savings accounts) to create more income for retirement.
The book failed on many fronts, and honestly, I cannot recommend it to anyone.
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November 12th, 2008 — Book Review, Personal Finance, Wealth
Thomas J. Stanley’s follow-up to his well-received book The Millionaire Next Door, follows a pretty interesting premise. It basically picks the brains of millionaires to find out how they got their wealth and how they keep it. It certainly offers an interesting read and I do recommend it, but not as a book that is going to teach you how to go out and make money today. It serves its purpose as a guide to help you understand how the rich think, but if you’re looking for step-by-step advice on how to make more money right now, it falls a bit flat.
This is basically a series of interviews that cover how some people managed to get rich. Unfortunately, it really doesn’t go very in-depth into these techniques. Instead, we get a whole chapter devoted to the process of picking the right spouse. What’s love got to do with it indeed? This rather antiquated view of picking the kind of spouse that will support you and be advantageous to your career is a bit out of place in today’s society. While there is a lot to be said for marrying someone who is going to stick it out with you, it lost me when it got down to bypassing the standard reason that most people do get hitched - love - and boiled it down to a merger.
Next up, the author discusses the importance of picking a vocation that you can truly be passionate about and one that is not already too filled. This is all well and good if you’re just starting out, but the primary audience for this book is most likely already well established and it’s a little too late to start thinking about changing horses in midstream. I would have liked to have seen more discussion on alternate streams of income that can supplement your existing paycheck.
Frugality plays a big role in this book as most real millionaires don’t live high on the hog. If they did, they wouldn’t be millionaires for long. The problem is most of us already get that. We know that if you spend money like water, it won’t be long before the tank runs dry. That knowledge is as old as the hills and about as useful. It is all well and good to teach reader’s about being frugal and not overspending, but this is a concept that most of us over the age of 30 (again, the intended audience) already get.
Due to this reason, this book is best classified as an interesting volume on how rich people think and it is well suited for those who are just starting on their financial journey. For those of us that were hoping for a book that would unlock the secrets of how these people made their money, it falls a bit flat. It’s still worth the read, but only as a reaffirmation of what most of us already know. It certainly won’t show you how many of these millionaires managed to spin straw into gold, and that is what most of us want to know.
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October 21st, 2008 — Budget, Debt, Financial Security, Investing, Personal Finance, Real Estate
Every day, the news about the economy seems to be getting worse and people across the world are concerned that they will be personally affected by the changes. In many cases, they already are when you consider how the cost of living has gone up, gas prices that seem to have no ceiling and continued natural disasters that threaten the stability of many areas.
There are many ways to stay financially solvent in bad economic times, and although it may not be easy for some, it can be done. The most important step is to curtail unnecessary spending, but this does not need to mean unyielding frugality, particularly if you manage your finances wisely. The stock market has been volatile, but there is still money to be made there as well, with smart investing.
If you do not yet have a personal financial advisor, this is a great time to get one. They will be able to assist you in navigating the world of investments and saving money in these times. For those that are deeply invested in the stock market and concerned about the direction it is taking, this is a very wise step indeed.
However, there are a few things that you can do on your own to keep your finances running smoothly. Instituting a budget is a great idea at this time, especially if you have issues with overspending. Mark down the necessities that have to be paid each month and then see how much you have left over. This is money that could go to work for you right now, as well as in the future.
Interest rates on savings accounts are not the best right now, but some gains are better than none at all. Having a savings account, or at the very least, an emergency fund, is a smart decision in today’s economy and can protect you in the event of the above mentioned disasters, or if a personal crisis strikes. Paying down any high interest rates debts should be a priority right now, especially if they are draining your finances every month. If you do have a problem with a high debt to income ratio, you may want to consider a consolidation loan to keep those interest rates in check and to help you save money each month.
If you want to keep growing your finances in hard times, there are several methods that can be utilized. The most common one that many investors turn to is housing, especially given the state of property values and the amount of foreclosures. This is a great time to pick up an extra house if you have the funds, and this can easily be turned into a rental property that will generate income.
Navigating the waters of uncertainty is never easily, particularly when bank failures are the talk of the entire world. However, if you watch your spending and take the time to see how you can make your money work for you in these times, you can come out on top.
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October 12th, 2008 — Personal Finance
Have you seen gas prices drop in your area? We have, my family out in Florida has. How far down has it dropped in your area? Let us know - leave a comment! Enjoy the weekend reading.
Life | Personal Finance:
Frugal Finds | Save Money:
Retirement:
Investing | Stock Market:
Thanks to the following carnivals for hosting us this past week:
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October 5th, 2008 — Personal Finance
Hello and welcome to the Money and Frugalness edition of the Sunday Money Madness Roundup. Several categories are presented below to help break up the collection of weekend reading links. Pull up a seat, grab your coffee and peruse to your heart’s content.
Save Money | Frugal Tips:
Debit Cards | Credit Cards:
Home | College | Retirement:
Debt | Debt Leveraging:
Money | Wealth:
Thanks to the following blog carnivals for hosting us this past week!
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