Sleep in Saturday is when I write about something I consider fun – a book review, a new project, or something random from my past.

//ws-na.amazon-adsystem.com/widgets/q?ServiceVersion=20070822&OneJS=1&Operation=GetAdHtml&MarketPlace=US&source=ac&ref=qf_sp_asin_til&ad_type=product_link&tracking_id=chiefmomoffic-20&marketplace=amazon&region=US&placement=159184679X&asins=159184679X&linkId=953d6b062ae843567b4f26ae309c1242&show_border=false&link_opens_in_new_window=false&price_color=333333&title_color=0066C0&bg_color=FFFFFF

I have to say that I, overall, absolutely hate this book. It’s sad, because Helaine does have some good points – especially in later chapters. She spends much time at the start trying to tear down the so-called financial gurus (Suze Orman, Dave Ramsey, etc.) in a bid to sell books off their names. And in the latter half of the book she tries to convince you that investing will never work and the government should take over. Your financial troubles aren’t your fault: even if there was “that ill-timed home renovation” or “the house that might have been a bit of a stretch”. You would get the impression that there’s no sense in even trying to save for retirement or for financial emergencies, because life will just come and smack you around, and the world/big businesses will make sure you fail. So why try?

She also contradicts herself quite a bit, and says things that aren’t true. For example:

The Statement The Contradiction/The Truth
Argues Dave Ramsey’s approach to deby elimination is “rubbish” because it costs you more money (Pg 66 – “…many of Ramsey’s lauded debt strategies don’t even work on a basic mathematical level!”) The next page she admits there is one small study in 2012 at Northwestern University showing its more important to build up willpower than rely on the numbers. Actually there is also a study from Texas A&M showing that meeting small goals helps you meet a larger goal faster.
Criticizes The Millionaire Next Door for saying everyone can be a small business owner (Pg 54  – “Most importantly, (millionaires) were risk takers who started successful small businesses, smoothing Stanly and Danko seemed to imply we could all do.”) The Millionaire Next Door is a research project on actual millionaires and the lives they lead. It’s not a “how to” book, but rather a “how did they” book. He found the wealthy small business owners owned “dull normal” businesses like garbage firms, dirt providers, and auctioneers who saved money, and that people with high incomes like doctors/lawyers tend to under accumulate wealth. He also found that the millionaires led an ordinary life, looking for good deals and not overspending despite them having the money to do so.

After the part of the book criticizing all the famous personal finance personalities, she does start to make some good points. For example:

  • Companies pitch variable annuities at many times where it doesn’t make sense (pg 102)
  • Jim Cramer and Mad Money are ridiculous, and should be treated as the entertainment he is rather than investment advice (Buy! Sell! Horns! Lights!). Ric Edelman makes the same points in his book “Rescue Your Money”
  • Large companies like Prudential, et. all can be infantilizing when it comes to the topic of women and money. Apparently Joan Cleveland from Prudential recommends turning everything over to a financial adviser (provided by Prudential, I’m sure) on Page 151. Because women don’t have a handle on basic investing products. Ugh, this is so aggravating! So instead of learning about the products, the womens should just turn over their money to the nice banker man who will hold their hand and charge them 2% fees to manage their assets. No thank you!
    • Fidelity’s third tip here is to “Turn to a pro” – which of course Fidelity will be happy to be for you! After all why learn to manage the money yourself.
    • Morgan Stanley assumes you have a financial advisor, you just might be reluctant to reach out to them with questions. They also reassure you that you don’t need to be an expert, just know enough to make sure you’re getting good advice
    • Prudential’s overall website is actually pretty good, surprising given the quotes. I really appreciate that their pitch for a financial advisor is contained within buried links
    • Interestingly Vanguard doesn’t seem to have anything on their site geared specifically toward women. Maybe because they see them as just…investors?
  • Her points about real estate and paying for it the old fashioned, traditional way that didn’t cause a bubble or the near-collapse of our financial system (20% down, 15 or 30-year fixed rate mortgage when you have a healthy emergency fund/plan and aren’t planning to move for 7-10 years is the way to go!)
    • Although this quote is ridiculous – Pg. 191, “But no one mentions little details like the fact that…land and residential units can be among the most illiquid of assets. They don’t say you can suddenly lose your job or encounter an expected medical expense and not be able to keep up with your mortgage.” I don’t know what she reads because I literally see these things mentioned ALL THE TIME. One day I’ll write a post about my ten years in this house and the ups and downs of it all.
  • Corporate sponsors just might not be the best source of financial education for our young kids. They have an inherent conflict of interest in that they make most of their money off the financially irresponsible. Also, having one class or a few classes in high school is likely not the most effective financial education. Sure, you can apply lessons in managing a checking account or credit card pretty quickly. But 401ks, mortgages, 529’s, emergency funds, etc. are all years down the road. A single class one time may set you on the right path but it’s unlikely to change your financial life unless you’re inspired to seek out more research as a result.

Unfortunately, all this good content comes after the shooting of the straw men. She rails against the personal finance crowd selling products with their names (like financial planners, budget worksheets) – I’m not sure if she things they’re running a charity? And I really don’t like how essentially no one is responsible for their own finances. Yes, I know bad things happen to good people at bad times. Heck, my husband almost died of septic shock, leading to a month away from home in the hospital and rehab, many surgeries, months of physical therapy, etc. He also lost his job three months after I bought my first new car and started my MBA. But did I sit around complaining “poor me” or “why me”? No, because that wouldn’t help anything. And fortunately I had always saved so these potentially devastating and bankrupting events were more giant roller coasters – a wild ride but still safe and it all came out OK in the end.

All in all, I may recommend taking this book out from the library if you want to get angry, or if you like to shirk responsibility for your finances. Otherwise, skip it.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s