Automatic Wealth for Grads

Title: Automatic Wealth for Grads

Author: Michael Masterson

Pages: 6 discs?

Genre: Self-help, Personal Finance

Grade: F

Synopsis: Michael Masterson is a self-made millionaire who shares his secrets in this book on how new graduates can also become self-made millionaires by the time they are thirty.  The secret is to have your income increase exponentially, start your own business and sell it for millions and buy and sell real estate until you are rich.

My Review:  I like to think that I would have been a skeptical reader of this book in 2007/2008, but in today's economy and marketplace, the instructions and estimates in this book are laughable.  As an example (These aren't direct quotes, but my interpretation): "we'll be conservative and assume that you will only profit 12% per year in the stock market, but really you should be able to make around 25%."  Or another, "Real estate investing will allow you to profit between 25 and 50%, while the best option of all is to start your own business (not a restaurant) where you can profit 50%!"  I found Masterson's tone annoying, his list after list of what you should be doing ridiculous and most of all, I felt that the entire book was based upon unsustainable tenets.  All you millionaires by thirty out there will disagree with my review, but I haven't come across too many lately (ps. even if your starting salary is only $20,000 you should be making $150-$250,000 in a few years if you are diligent!).

Your Money or Your Life

Title: Your Money or Your Life

Authors: Joe Dominguez & Vicki Robin

Pages: 336

Genre: Self-help, Personal Finance

Grade: A

Synopsis: This book outlines a 9-step program that empowers the reader to reach FI (financial independence, financial intelligence and financial integrity). The steps consist of finding out how much money you have made throughout your lifetime and then comparing that to your current net worth. The next steps are to track your spending from month to month and to determine whether or not you are getting the actual monetary worth from the money that you are spending. The goal in all of this is to be able to find and reach your personal crossover point, where your investment income equals the income that you need to have to live (see http://www.yourmoneyoryourlife.org/).

My Review: I really enjoyed this book. I had heard that it was one of the most recommended personal finance books out there, that has largely stood the test of time (almost 20 years, at least). I started a few of the exercises, but decided that it would be more beneficial to get my hands on a used copy of the book and then to read this with Alison and go over the exercises together. I liked the focus the book had on reducing our personal consumerism. We have been brainwashed into thinking that it is critical for us to consume in order to the economy to continue to grow. This mindset is detrimental to ourselves and in many ways to the environment. I had always envisioned reaching the crossover point right around the time that I was to retire. I now see that with intelligent financial management, this point can be reached much earlier and then allow us to have financial freedom for a longer period of our life. It's worth it to me to live frugally and be smart with my money in order to have more time (and money) to put towards my dreams later on in life.

From the Book: "(p. xviii) This shift has arrived none too soon. Americans need to transform the way they think about, spend and save money--if only for their own security. The savings rate in the United States has dropped from just below 5 percent when the book was first published to below zero at the time of this writing. The sirens of consumerism have but us into a deep sleep. The apparent deep pockets of Uncle Credit Card allow us to indulge in living far beyond our means. According to a 1997 Public Agenda report, nearly 40 percent of Baby Boomers have less than $10,000 saved for retirement. The old norm of increasing savings in the good times to offset the inevitable fallow years has been reversed. Overspending increased during the economic expansion of the '90s. It was this head-in-the-sand attitude about savings that most concerned Joe in the years before he died in 1997. Drenched for decades in information about the national and global economic ups and downs, he found Americans myopic about the long cycles of the markets and economy."

"(p. 15) Americans used to be "citizens." Now we are "consumers"--which means (according to the dictionary definition of "consume") people who "use up, waste, destroy and squander." Consumerism, however, is just a twentieth-century invention of our industrial society, created at a time when encouraging people to buy more goods was seen as necessary for continued economic growth."

"(p. 117) You come to differentiate between a passing fancy and real fulfillment, that point of perfect balance where desires disappear because they have been completely met. Any less would be not enough. Any more would be too much. A fulfilling meal is one where all the flavors, smells and textures blend perfectly and your appetite is satisfied without even a trace of teh discomfort of having overeaten. In the same way, a fulfilling car is one that meets your transportation needs perfectly, that you will enjoy owning for many thousands of miles, that doesn't insult your wallet or your values and that, with good maintenance, will be both reliable and a pleasure to drive. Your internal yardstick would dismiss any superficial desires to impress others, to relieve the boredom of driving a two-year-old car, to own a Mercedes because you want the status symbol or to have a blue convertible that matches your eyes. Those are all external yardsticks. If an experience or a purchase is truly fulfilling, the desire disappears for a long time. You are satisfied, contented, at peace."

The Complete Tightwad Gazette (Vol. I)

Title: The Complete Tightwad Gazette (Vol. I)

Author: Amy Dacyczyn

Pages: 300

Genre: Personal Finance, Self-Help

Grade: B+

Synopsis: Amy Dacyczyn (aka the Frugal Zealot) published The Tightwad Gazette as a newsletter from June 1990 to December 1996. This book was created as a collection of all the tips and stories from the newsletters. It is split up into three parts (of which so far I have read only one) of about 300 pages each. The book covers ways to save money in hundreds of unique and imaginative ways.

My Review: This book has a long waiting list at the library so I was only able to cover Volume I during my allotted time. I think that it's probably for the better to split it up anyway. I really enjoyed the tips and tricks in the book and plan on utilizing many of them in my life. In fact, I'm going to try and post frugality/personal finance tips and tricks weekly on Lurp's Lounge (my regular blog). I took copious notes from this book and plan on sharing many of them with you, gentle reader. If you ever find a used copy, pick it up and it will quickly pay for itself as you practice increased frugality.

From the Book: "(p. 54) Tightwaddery without creativity is deprivation. When there is a lack of resourcefulness, inventiveness, and innovation, thrift means doing without."

"(p. 152) The manufacturing of most goods harms the environment in one way or another. The culprit is not the factory, but it is we who buy what it produces. Therefore we should think carefully about items we purchase."

"(p. 216) Jim purchased a brand-new book called How to Fix Damn Near Anything. In horror I discovered a $15.95 price tag on the inside of the jacket. Upon interrogation he confessed that he purchased it at the thrift shop for $.25." (My note: I actually purchased this book at full price for my birthday last year. How embarrassing.)

"(p. 228) So how do we sort it all out? The relationship between ethics and thrift can be summed up in just one sentence. It is wrong to save money at the expense of others. Period."

"(p. 232) The dieter will fail as long as he hates low-calorie food. The would-be athlete will fail as long as he hates exertion. The tightwad wannabe will fail as long as he views frugality as a lifestyle he has to endure, or was forced into by circumstance."