Review: A Million is Not Enough
The title almost gives away the whole book. If you are looking to retire a million is not enough. There’s a popular retirement guideline that you can safely withdraw 4% per year to live on in retirement without running out of money (there’s some people who say 3.5% is a better number now). That means that a million dollars will give you around $35,000-$40,000 of spending money per year. Despite that popular guideline, A Million is Not Enough suggests that it will generate $50,000 for 25-30 years. Is $50,000 going to fund your ideal retirement? Not likely.
This book is aimed at the Baby Boomer generation. In fact, the author subdivides the Boomers into three groups, the last of which extends ten years past the typical Boomers (those born in 1971). The book starts off by trying to get you to map out your retirement and giving you a guide to doing it. Makes sense, you need to know where you are going before you begin your journey. Next up, the book takes you through calculating your net worth. After that, it takes you through calculating your monthly spending.
The next section of the book is about saving money and how it compounds towards retirement. It gives a number of tips on how to be frugal. One that I liked is “mow your own lawn.” Even if you make $100,000 it’s worth it rather than paying someone else $40/hr to do it. Most people would say that the person earning $100,000 is making $50 an hour, but after taxes it’s less. More importantly, that person is still likely to make a $100,000 whether (s)he mows the lawn or not. The person typically isn’t replacing a work hour when (s)he mows the lawn, but instead replacing an hour of watching television. Need more reason to mow your lawn, it’s good exercise. A Million is Not Enough gives you about 40 pages of these tips. The idea is that if you implement the tips, you’ll find a few hundred extra dollars a month to invest to get you above that million dollar mark for retirement.
The next section of the book is about investing and understanding your risk tolerance. It then transitions to portfolio analysis for each of the three Boomer types. This includes specific companies and funds to invest in, which seem dated 5 years later (anyone investing in Dell as they try to take it private?) Quite honestly, Farr should have stuck with index funds with low expense ratios that stand the test of time.
In the next section, the author takes you through a few real-world examples of different types of Boomers. One of the examples is a man named Henry Rollins who is unfortunately not the Henry Rollins of “Liar” fame.
As we get near the end of the book, Farr gives some advice on the psychology of investing. It focuses on recognizing bubbles. The book ends with a chapter on how to pass money on and creating a legacy.
All in all, my “skim it” review tells me it’s a solid book to build a good foundation for Boomers. If you take the general ideas of tracking net worth, budgeting, frugality, and investment, you really can’t go too far wrong. Then again, it’s not like Farr breaks any new ground in those areas. Slow and steady wins the race and A Million is Not Enough embodies that mantra.
The hardcover version of this book that I’m giving away originally sold for $24.99 in 2008, but if luck is on your side, you could get it free.
How to win A Million is Not Enough
The verbose explanation is at the book giveaway announcement. Here’s the short version. Leave a comment. Better comments increase your odds of winning. Use a real email address so I can get your mailing address if you win. I won’t spam you. I’ll try to be quick with the shipping, but there are no guarantees.
Get your entries in before Sunday July 14th at 11:59PM ET.