Sleep in Saturday is when I write about something I consider fun – a book review, a new project, or something random from my past.
Overall I have to say this is a very good introduction to the basics of personal finance and “retirement”. I put retirement in quotes because Chris isn’t just advocating the usual work until 65 and then stay home all day image that many people have when they think about retirement. Instead he encourages people to think about financial freedom and what they want to do with the next phase of their lives. The stories he tells in the book are truly inspirational- like someone who made under $50k a year who could quit working decades in advance of a traditional age, or the couple Michael and Donna who discovered a beloved aunt was eating dog food because she couldn’t afford anything else. I also liked the story of James and Judy, who seemed to embody the proverbial “Jonses” the rest of us are supposed to want to keep up with. Great house, nice furniture, awesome vacations, and they’re going to need to work until they die to pay for it.
By the way, you may think the dog food story is an exaggeration, but I don’t think so. My mother used to work in an AARP product call center and there was one woman’s story who stuck with her. The price of the product had gone up and this woman was calling to complain. Of course, like many AARP members she was on a fixed income. She told my mother how all she ate was one small bowl of food every day, because she couldn’t’ afford to eat more. That stuck with her – and with me. Neither of us want to be that person, and the dog food story reminded me of that. So it does happen. If you visit elderly relatives make sure to take a peek in their cabinet to be sure they have enough food.
The book isn’t all stories though – there’s a lot of facts about retirement, insurance, debt, emergency savings, and investing. There are two common complaints about Dave Ramsey’s investment philosophy that I didn’t see in the book – promising a 12% return and an 8% withdrawal rate in retirement. I didn’t see either of these mentioned, with Chris instead choosing a more general educational and inspirational tact rather than hard calculations. However, another complaint I see about Ramsey recommending loaded mutual funds and expensive financial advisers – that’s in there. So be forewarned. The educational facts are rather basic, so if you’re already familiar with the basics of personal finance and retirement you likely won’t learn anything new here. But if you pick it up from the library like I did, you can still glean a few gems and feel inspired to take action to help achieve financial independence.
Now I’m going to give a few more insights from the books, “The Good, The Bad, and The Ugly” style:
- Excellent brief coverage of basic financial topics
- Inspirational stories to help motivate you to take action
- Presents financial independence as an option, not as something dramatic or unreachable
- Gives good steps to take at every age
- Uses helpful acronyms to help you remember certain concepts
- Good place to start if you’ve never read a financial book before
- The beginning of the book is a bit heavy on religious talk, and that may be a turn off. I will say that it doesn’t continue through the rest of the book.
- The financial information is basic. Very basic. If you’ve read financial books at all most of this book will be a repeat of things you already know
- At the end he drops a bombshell about his personal story, how he has a son with a rare genetic disease that may not live to see 15. It’s almost an afterthought, and I wish he had put it earlier in the book and written more about it. All of us parents can empathize with caring for an ill child, and it would be an excellent example of why you need to save for emergencies.
- It gets really dry about halfway through. You can tell he’s trying to make it interesting but it’s a lot of financial information, and not so inspirational
- Lots of football stories – in practically every chapter. Plenty of baseball analogies too. This makes the book feel like it’s not geared toward women (although if you’re a woman who likes football & baseball, you’re all set here)
- He doesn’t talk about index funds at all. If this was the only book you’ve read you would think only mutual funds exist (with loads, likely)
- He recommends financial advisers without discussing the downsides, what to look for, or when you might not need one. Instead it’s “everyone needs a financial adviser”. I would have liked to see more critical analysis or what to look for.
So all in all, if you can overlook the religious and sports references, and you won’t jump into loaded mutual funds and financial advisers without more research, this wouldn’t be a bad book to pick up to learn the financial basics. The stories are definitely inspirational and memorable, although parts of the book are dry. I wouldn’t recommend buying it though, and you definitely should read other financial books from a more independent viewpoint to learn more about how to evaluate financial advisers and about index funds.