Judging by the quality and helpfulness of the books they write together, Ben Stein and Phil DeMuth are a great team.If you are interested in money, and everyone is, you will certainly benefit from their books.They have shown how, given enough time and discipline one can "time" the market (not by day trading), how to become a successful income investor, how you can get from wherever you are to a comfortable retirement, and now they provide us with a book for young people beginning their work lives.The financial life they describe begins with understanding what the workplace is about and how salaries should be viewed.They begin by helping the reader view their income and expenditures (consumption) as a lifetime cycle.When we are young, we consume more than we make, but we are consuming our parents' resources.At the mature end of our lives, we also want to consume more than we make because we want to retire.To make that happen, something has to happen during our working years other than buying everything we think we want or suppose we need.The authors point out that we cannot wish life would return to the way our parents knew it or as we dream it should becomes.". . .we have to plan for life as it is today, not as it was yesterday."
Once we can see the future as an economic life cycle, the authors give us some insights on how to maximize lifetime wealth.It is about getting an education in a marketable field that will keep you in demand rather than indulging yourself in an expensive college education (both in dollars and in years) that will not lead to gainful employment.Graduate school might even make some sense, if you use your education wisely.It has to do with being a good employee, of making and keeping great connections in life, of keeping your reputation and character in order so people will admire, trust, and recommend you to their friends and employers.
Stein and DeMuth then take us through life in decades.They take us through what work life will likely entail in one's twenties, thirties, forties, fifties, sixties and provide a series of chapters on each decade.Then they provide a chapter on what one's investment considerations are likely to be during that specific decade including the positives and the pitfalls.They also provide chapters for each decade on life as a married (with kids) or as a single (never married or divorced).
As they point out often, and they should, the key to having a real financial life where one can sleep at night and feel good about one has done for his or her family, is to get control of your finances early in life and to be disciplined about saving, spending, and work.Savings put aside early has the power of compounding and can weather the changes in the economy more easily than the same amount of money put aside later in life.
Learning to consume (spend) not only within one's income, but within a realistic life economic plan will bring great rewards.Not only will you have the money you need, but as others see how you live they will admire you (yes, some will be jealous, but they won't really matter that much), and employers will trust you.You will reap many dividends beyond the interest and capital gains your savings earn.
The chapter on how to have babies is particularly useful, because it deals with the whole parenting experience as it impacts your finances.Yes, we want our children to have the best life possible including the best education.However, there are serious implications about when your expenditures on their education will have the biggest impact on their life and your later life.Unless you are very wealthy, the authors recommend living where the public school system still works rather than spending their college money in k-12.And they view college as an earning asset that the child should have a share in paying for since they will be getting the benefit.One should not impoverish one's later years when one will need money in serious ways and the child will likely take their schooling more seriously if they have a share in paying for it.
I also appreciate the way Stein and DeMuth talk about the way income likely will occur during your working life and what happens to most people in the workplace as they make changes to have children, as they age, and as their specialized knowledge that made them value becomes obsolete.This is material everyone needs to read and understand as they begin their career and as they go through these changes to get a handle on what is actually happening to a career they thought was on a one way ride to the stars.
The advice the authors give on retirement is quite sound.I also recommend that one get their "Yes, You Can Still Retire Comfortably" if you are far enough along that this is a serious consideration for you.These two books are quite powerful when read together.
Yes, I wish I had done better in my economic life.Most people do.Almost everyone makes mistakes and has setbacks, but knowing what should be done and what one should be aiming for has great power and is incredibly helpful to reorienting oneself after an economic body blow.Oh, and speaking of setbacks, the authors also have helpful discussions on insurance.
I recommend this book for you.For you to give to your children and even to a serious minded individual in his or her late teens preparing for college.But don't just hand them the book.Make a plan to read chapters and have a lunch together to discuss what you have read.Let them disagree with the authors and explain why.Don't rush to correct them, because the important thing is to keep them open and talking.If you shut them down you will not only not know what they are thinking, they won't listen to you when you really want to help them and they need your help.
A terrific book.Strongly recommended.
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