Top positive review
7 of 7 people found this helpful
Terrific introduction to managing money and life.
on November 7, 2003
The authors practice what they preach, and they preach a very thought-provoking new way to look at how our lifes revolve around money. New readers will appreciate their discussion in analyzing careers and values in terms of "life energy." Many will also come to see how hidden costs to particular jobs can be an added drain to financial and personal well-being. I see lots of friends scratching their heads and wondering where their fat paychecks have gone after subtracting the cost of commuting time, required work wardrobe, car maintenance, and gas. This book contains snippets of stories about individuals that faced money dilemmas and how they gradually overcame their fear, ignorance, and misconception about money.
The one major downfall in this book comes at the end, with the discussion of where to invest one's money. After a flawed attempt at miniming the dangers of inflation and a well-deserved jab at conflicted brokers, the authors advocate investing everything in treasury bonds, simply because it's the least volatile financial investment. While we currently live in a time of relatively low inflation, there is no guarantee this will remain so, given the ever-growing weight of the national budget deficit and the trade deficit in the U.S. and political and economic instability around the world. The authors brushed aside inflation by pointing out the possibility of product substitutions. However, general inflation occurs when prices of all products rise simultaneously, not just with one particular product. Just ask anyone who lived through the late '70s/early '80s on a fixed income. The yields on treasury bonds have been dismally low, barely over inflation.
It is also wrong to assume that living expenses will stabilize or fall during retirement. The cost of health care is rising. Given that it is nearly impossible to obtain adequate medical insurance in old age, a single major catastrophic illness can easily wipe out a one's nest egg. Housing costs in major metropolitan areas are also rising faster than inflation, except in rent-controlled areas. Rent alone in my city can easily run up to fifteen hundred dollars a month. Relying on only treasury bonds will not be the solution.
This book sets down an excellent fundamental discussion on how to view money and career, and assessing living costs. Readers looking to manage their own money should supplement this reading and gain a more sophisticated understanding of the financial market with books like "One Up On Wall Street" by Peter Lynch and "The Warren Buffett Way" by Robert Hagstrom.