Book Review: Failure to Launch No More

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I usually start every book review of mine with an usual disclaimer... I usually don't like reading books. My reading speed is extremely slow and I'd prefer to have all the information distilled into 10-20 pages rather than 200 or more.

I often come away thinking that the cost of reading the book is not actually the money spent on the book, but the opportunity cost of my time to read it.

The book I am reviewing today is different.

Failure To Launch No More by Martin Dasko is well worth your time to read it.

I read it in around two hours... as I was doing a little multitasking.

What about the cost of the book? As a fan of the awesome Studenomics website, I subscribed to his mailing list. Dasko sent out an email about a number of things, but in it he mentioned that the Kindle price was a "damn buck."

The price is a little more now, but my thinking still hasn't changed... if you don't have a couple of hours and a couple of damn bucks lying around, just quit trying to launch a company or sell a product.

Since there's little cost, the next question is, "How good is the book?"

The short answer is that it is very good if you read it in the right context. It isn't trying to be How to Win Friends & Influence People or The Power of Habit. Don't expect something that was painfully researched in detail for years and years. It is designed to get you motivated to get off your butt and launch your business... with a focus on practical advice.

I'm usually not into motivational books. They seem to be heavy on "follow your passion" and telling you what you want to hear. Failure to Launch No More takes a practical approach to starting your business. It forces you to look at your financials to see if you can actually live while you are getting going.

My favorite part of the book came early on. Who do you get advice about your business from?

Many people turn to family or friends, but they can be terrible resources. They discourage you from taking a risk so you don't get hurt. Or conversely they may overpraise you, setting you up for disappointment times get tough.

I often write about multi-level marketing/pyramid schemes and people often look for advice here too. In most cases family and friends give accurate advice to stay away. Thus from my perspective I was ready to say that Dasko gives poor advice.

He follows it up in the book with who you can get great advice from. It is suggested that someone with no vested interested in your success or failure is usually a good sounding board. He takes it a step further and says that you should listen to critics:

"We need to hear the truth sometimes. Thank a critic for being honest."

This is the kind of practical advice that goes beyond the simple motivational speaking to get that project launched.

There were at least another half-dozen points in this book that I found enlightening. After nine years of blogging and doing a ton of research on these kinds of things, I'm very happy when I learn one or two truly enlightening things a day.

It is well worth it to read something that wasn't just re-hashing the same old crap... and even better that it didn't take all day.

If you've got a couple of hours and $10 you could go to the movies and watch people blow stuff up. Or for half the price, you could get some information to put you on the path to financial freedom. Suddenly, spending a couple damn bucks on
Failure To Launch No More seems like a good idea doesn't it?

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Posted on April 20, 2015.

How Much Money Do I Need to Retire?

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That's the title of the book that Todd Tresidder gave me at Fincon 13. I was so excited to read it that I churned through it on the flight home. Many months later, I am finally putting together the book review. That's how busy I've been with the new baby. Let's hope my memory is good enough to do the book justice.

At first glance, the book's size and scope reminded me of Mike Piper's Can I Retire? Piper's book is 100 pages, and Tresidder's is 120 including appendixes and his biography. This book is part of his "60 Minute Financial Solutions" series. I think it takes more than 60 minutes to really digest How Much Money Do I Need to Retire, but I'm a slow thorough reader and I was focusing intently on the details in order to write the review.

How Much Money Do I Need to Retire? is quite different from Piper's Can I Retire?. While Piper concentrates on investments, Tresidder's approach is more concept-oriented. In particular, Tresidder seems to advocate an unconventional approach that I've written about in my early retirement plan posts. I'll get into more details in that later.

How Much Money Do I Need to Retire? is divided into three parts or retirement models. However, in reading the book, it felt that there really are two distinct models. These models serve as blueprints for building a successful retirement plan.

The first model is conventional retirement planning. If you are a regular reader of personal finance, you most likely know what this is. The idea is to get a big nest egg of cash and draw from it, typically using the rule of 4%. Tresidder points out a number of problems with this method. The biggest problems center around having to make guesses at things you can't possibly know. For example, it is really hard to know what your expenses are going to be when you retire. Who knows what the cost of health care will be? As you get closer, it becomes easier, but from a distance, it is very much a crap shoot. The same is true with investment performance. Even if you retire at 65, you might need that money to last another 20 years. What's the rate of the return of investments going to be over that time? What if you live another 35 years instead of 20?

There are so many variables and any one of them can drastically alter any retirement plan. Even that 4% rule is coming under question. A small difference there makes a big deal in figuring how big of a nest egg you'll need. Tresidder does a much, much more thorough job of explaining this in the book.

Another alternative model is to use a cash flow model for retirement. Essentially the idea is to have enough money coming in from various sources to pay for your lifestyle. The money could be coming from dividends, interest, annuities, Social Security, income producing real estate, or royalties (for those in such fields). It can even be a business (or hobby business) that you can run somewhat passively or that you truly enjoy. If you have enough of these forms of income, you don't really need a big nest egg (granted you'll need a nest egg for dividends and interest, but not the others).

Sometimes it pays to be smarter and not rely so much on the terrible interest rates that banks are giving and put more emphasis on Lending Club where I'm getting closer to 7%. I'm not saying you should put $100,000 in there, but if you were to have similar returns, you could use that to passively earn around $7,000 a year (of which inflation would eat away some). If your bank is paying you close to 1% then you'll earn $1,000 a year (and inflation would likely put you at a loss). It's a big difference.

The other half of the coin is matching your lifestyle to fit this cash flow model. Keeping expenses down just a little makes a huge difference in one's ability to reach financial independence. You don't have to live his minimalist lifestyle, but if you are able to find happiness in the things money can't buy, you should be able to keep expenses down.

If your cash flow income passes your expenses... guess what? You can pretty much retire. You want to make sure that you are prepared for emergencies, but for the most part you don't need to have that big nest egg. You don't need to worry if the 4% rule will hold up. You don't need to worry about that burn rate.

Over the years, I've gravitated to this cash flow way of thinking about retirement. That isn't to say that we don't have 401(k)s and IRAs and we are still building up that nest egg. We are taking a hybrid approach that I will go into more in tomorrow's post.

Not to sound like the Dos Equis guy, but I don't recommend a lot of books, when I do I'll be recommending How Much Money Do I Need to Retire?

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Last updated on March 2, 2014.

Confessions of a Professional Blogger Reviewed (Book Giveaway!)

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If I've said it once I've said it at least a half-dozen times, I don't like to do book reviews. I have about 1.2 gigabytes of reading a day from the internet, so the last thing that I look to do is read a book. I'm also not the fastest of readers. It adds up to spending a lot of hours of preparation before I can even sit down and write the book review.

However, when I saw that Miranda Marquit was running an Indiegogo campaign to support her upcoming book, I was intrigued. If you don't know Marquit, you probably don't read too many personal finance blogs. She's written for so many of them, that she's become almost synonymous with personal finance blogging.

Before I get to her book, Confessions of a Professional Blogger, I have my own confession to make. We have traveled in different personal finance circles for years and only briefly crossed paths in one small email chain back in 2008. The Indiegogo campaign gave me an opportunity to support her work, which was my way of saying, "Thank You. I See You."

That introduction opened the door to meeting her at Fincon, an annual personal finance blogging convention. And that led to us coming to agreement where she'll be contributing a couple of articles a month here.

It's Networking 101, but more importantly it is an example of how seeming small gestures can lead to big things.

With that little bonus out of the way, it's time to get to the book review itself. I initially thought the book was going to be how to run your own blog (getting a domain name, installing a content management system such as WordPress, designing a theme, getting plugins, etc.). I was wrong. Then I thought it might dish on some dark practices of bloggers such as ridiculous SEO articles like this one. This was a little closer but I was wrong here too.

It is a book mostly about being a freelance writing for blogs. If you are looking for a guide for how to make money writing articles for people with successful blogs, it is a must-read. Confessions of a Professional Blogger walks you through the whole process of getting recognized, building up a resume, deciding on which jobs to take, and more. What I liked best about the book was the pragmatic approach. Sometimes you have to pay the bills and sometimes that means taking jobs a little out of your comfort zone. As you get experience and recognition, you'll be in a better position to turn down less desirable gigs.

The book extends beyond blogging and even freelance writing by giving advice on the business itself. For example, there's an excellent section comparing the differences between owning a blog and writing for a blog. It's been a long time since I've written about all the things I do running a blog, but there is a huge difference between that and writing for a blog that someone else owns. Each has their own pros and cons, which are well-covered in the book.

That said, there's a lot more to writing than just pumping out a few articles. Marquit coves that in detail as well.

Finally, I really liked various part that dealt with... ummm... I'll just call it "life." Some examples:

  • There is going to be a time when writing or blogging doesn't come easy. When you reach that point, should you quit, outsource some help, or find another solution.
  • What do you do when you realize that there are 10,000 articles about how to save money on gas? (Hint: you need to add your own spin.)
  • How do you manage cash flow of getting paid by different publishers on different schedules? What kind of business trade-offs do you make to ease the bumps of collecting money?
  • How to be more productive, from planning your posts in advance to something that you wouldn't expect (in this kind of book)... eating and sleeping well to keep you in top form.

It might sound like the book is 1,000 pages, but it is quite a quick read. It's a great accomplishment to be able to fit all that information in a small space. As a professional blogger, I'd like to say that I knew everything in there, but I still learned quite a bit. Specifically for my situation, I learned about what I can do to create a good work environment for my writers if I really go full multi-author blog someday.

If you ever thought about making money online and didn't know how to get started, this book will build a foundation and get you headed in the right direction.

Update: I've been able to work out deal with Marquit to give away a book to one reader of Lazy Man and Money. To enter, leave a comment here. The better the comment the more likely I am to give you a few extra entries. (I like to reward those who create or add to the conversation vs. the "give me book" grunts in the comments.) The last date to enter is Feb 16th, 11:59PM. Contest is open to those in continental US (as I'm not sure that Marquit is willing to ship the book to Fiji).

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Last updated on February 10, 2014.

The Economy of You by Kimberly Palmer Review and Giveaway!

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A few weeks ago, Kimberly Palmer of US News & World Report's Alpha Consumer blog fame reached to me to tell me she's got a new book coming out. I very much enjoyed her first book, Generation Earn (read my review), so I jumped at the opportunity to read and review this book early.

The The Economy of You is about starting a side-gig to have a back-up income stream. Here's a little video from Palmer herself explaining the book:

That's been a core tenant of Lazy Man and Money since 2006, when I coined the term "alternative income stream." As a software engineer, I had seen many jobs outsourced to countries such as India. They could get a team of software engineers for what it cost to pay me a fair wage in the United States. It didn't seem wise to bet the house on a software engineer career to last 35 years until I retire at age 65. That's what got me interested in learning to invest, thinking about becoming a landlord, and other ways to make income as passively as possible. Lazy Man and Money was supposed to be a place for like-minded people to brainstorm ideas (and it is that), but it also turned into one of those income streams itself.

The Economy of You feels to me like two books in one. As Palmer said in the video, she interviewed over 100 people about their side-gigs. A large part of the book is dedicated to snapshots of profiles of those people... the guy who started his cake business, the woman who runs a Yoga studio. The names and businesses come at you quick. Personally, it wasn't my style and I didn't feel like I gained much from the stories. Palmer at one point describes herself as a right-brained person, and I'm not that. Maybe if you are right-brained, the profiles of successful side-giggers will be of interest.

The "other" book is what I found most helpful and I hope that Palmer will extract this stuff, possibly creating a Palmer Planner in her Etsy shop. Sprinkled through out the book were a few sections that gave actionable items. For example there's the Dozen Successful Strategies of Side-Giggers, The Economy of You Handbook, and Five Common Pitfalls to Avoid. In just a few pages, you get the combined wisdom of 100 successful side-giggers along with a guide to get you started. This is why you should buy the book.

However, for one lucky reader of Lazy Man and Money, they won't have to buy the book. They'll be getting it free. Kimberly Palmer has agreed to let me give away a copy. If you are interested in receiving a copy, leave a comment and maybe you'll be the winner. I'll pick the winner randomly, but I reserve the right to give you 3 or 5 entries if you leave a good or great tip on side-gigging with your comment. Giveaway ends on Tuesday Jan 22, 2014 at 11:59PM ET.

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Posted on January 16, 2014.

The American Girl’s Guide to Money Reviewed. Wait, What?!?!

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Recently my wife sold a few American Girl on Ebay for her mother. While doing the research to find out how to price them she found that they can be hundreds of dollars. I think my wife ended up selling 5 of them for close to $500... used, without the boxes, and some not in the original clothes. Years ago when we were dating, I remember her (much younger) cousins getting American Girl dolls and clothes for Christmas. When looking through the catalog, my wife was taken aback by the outfits that could be $40 or more. Her quip to the girls was, "I hope you get an American job that pays American money for this stuff."

No doubt about it, the entire American Girl entire franchise is expensive. I hear they don't make it easy with each girl having a friend that you have to have and other accessories.

So it was with great interest that my wife came across the book: American Girl: A Smart Girl's Guide to Money. We joked that it must be one page long with only four words, "Don't buy our products!" However, since it was only a couple of dollars, and it qualifies as research for this article, I picked it up and read it.

Yes, Lazy Man, who is going to have a second son (and no daughters), is going to review a personal finance book for teenage girls by a company that sells their products at what I'd politely call a "premium price." Everyone saw that one coming, right?

As it turns out, the book isn't four words long. It's 95 pages, with a bunch of colorful illustrations and big print... the kind of presentation that might be appealing to the target audience of teenage girls. It makes it a very quick and easy read.

For such a small book, it's packed with information. In fact, if you can overlook the fact that it's written for teenage girls, I'd say it's the perfect book for teaching kids about money. In fact, I think I know a few adults who could learn a thing or two. This is saying something, because I really, really wanted to hate this book.

The book starts off pretty slow with pictures of girl's faces showing various emotions about money. It quickly picks up and gives a few girls' opinions on allowance and some tips on how to ask for more (the right time to ask, how to justify it, etc.).

Then it goes into starting a business (so you can afford American Girl Dolls no doubt). This includes giving details on how to identify what kind of business you are best suited for, keep track of profits, marketing, working with partners, pricing product, creating invoices, and ledgers.

The next section is about shopping smart which in several cases makes a pretty good case against buying American Girl products. They focus on needs vs. wants in one paragraph, but another page is the best example of contradicting their doll business. Specifically, it depicts a situation where the girl has a purple plastic monkey that's super "cute" and she knows she's going to regret buying it. (Maybe girls don't regret buying American Girl dolls.) It asks questions of what you are going to do with that monkey. What would your mom say about buying the monkey? Are you still going to be using the monkey a month from now, or is it going to the toy bin graveyard? Imagining life without the monkey would it be any worse? And picture a bike that you were saving for that you will make you happier than the monkey.

The section also deals with how to avoid some basic marketing ploys, using debit and credit cards, creating a habit of saving, and budgeting, balancing a checkbook, and even investing.

The book closes out with a little bit on donating to charity. It also included one page that I particularly liked about how $20 can mean different things to different people and even different things to you based on how you acquired it and what the expectations were. Almost every blogger I know treats the first $100 they make blogging like gold. They should celebrate it. It's extraordinarily difficult to make that first $100. It reminds me of how excited my wife gets when she makes a few dollars flipping an item we found at a yard sale on Ebay. I should mention that she's a pharmacist, so a couple of dollars is literally a drop in the bucket compared to her normal earnings.

The book isn't a complete guide, but it's not supposed to be. For its intended audience, it is pretty close to perfect. It teaches just enough without getting too long that the audience would simply not read it. I had fully planned to give the book away when I was done with it. I still might. However, I'm leaning to keeping it for my sons. Hopefully they won't get made for treating them like teenage girls.

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Posted on September 12, 2013.

The Money Code Reviewed (with Bonus Free Book and $25 Giveaway)

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The Money Code

The Money Code

I get a lot of books. It costs very little for the authors/publishers and blogger reviews help build a good buzz. I could spend the next 3 years reviewing a book a week and still have books left over. So why am I reviewing The Money Code today? Two reasons:

1. They've offered to give a reader a free copy + plus a $25 Visa card
2. It is a really good book.

To be entirely honest I only picked up The Money Code because it was a short 129 pages. Flipping through it, a large number of them are blank due to the chapter breaks. Much of the important content in the book was formatted with easy to read information boxes and bullet points. The whole thing was wrapped in a fictional story that tied the ideas in the book together.

About fives minutes into reading the book, I had the idea that author Joe John Duran was essentially selling what could be three or four 800-word blog posts for $14.95. However, as I read the book, I realized I was a dope for thinking such things. (Do people still use the word dope in that context, or is that too "Bugs Bunny"?)

It turns out that the book is very densely packed with a lot of good information. I don't read too many personal finance books (I prefer blogs), but I bet few cover the psychology of money better than The Money Code. Being an analytical person, I often gloss over the psychology of money. It just not part of my money mind.

What's a "money mind"? Glad you asked. That's the concept in the book that I found the most valuable. The theory in the book is that people fall into one of three categories:

  1. Fear (The Protector) - These people tend to hoard money, because they are fearful that something down the road will require it. On the plus side, they make for very good savers. On the minus side, they miss out on much of what life has to offer
  2. Happiness (The Pleasure Seeker) - These people spend, spend, spend to make themselves happy. Think Carrie's shoe habit in Sex and the City.
  3. Commitment (The Giver) - Do you have that relative that always gives money even though you know they really can't afford it? I do. They would fit into this category.

Now not everyone is 100% all of these, but usually one is more dominant than the others. You aren't necessarily born into a money mind; it is often shaped by experience. When I was unemployed by the dot-com bust around 2001, that pushed me towards a fear money mind, which still dominates my money thoughts today. That's why I write a personal finance blog. If I won the lottery, I would be more happiness and commitment money minded.

If you want to know what your money mind is, go to Find Your Money Mind. Also Honest Conversations has a lot of the tools and information in the book.

It is useful to know not just what your money mind is, but also what the money of mind of your spouse or partner is. If they are different and opposed as in the fear and happiness money minds, arguments on money are likely to ensue.

This money mind discussion covers only one of the 5 money lessons that make up The Money Code. I found this lesson to be by far my favorite and some of the others to be less interesting.

As for the narrative of the book itself, the money lessons are wrapped around a fictional character named Jack who is trying to figure out if he should spend the money to go on a vacation, which he feels will help him through a tough split with his wife. While it's not the same thing, my wife and I were planning on whether we should spend a large amount of money for one of her professional conferences this year. Usually she can go for free, but with the job change, reimbursement wasn't possible this year. Complicating things is our first baby that is four months old, it's not as easy to just fly across the country as it was in past years. In the end, we came up with a similar solution to Jack, go on the trip, but avoid the huge conference fees by going to other related events and avoiding the J.W. Marriott host hotel for something a lot cheaper.

The lessons that Jack learned also were applicable in dealing with our decisions to buy new cars too. Maybe, it's just great timing that these things come together or maybe the ideas in the book are universal enough to apply to a broad number of financial situations. I'm leaning towards the later.

As for the value of the book, it was well worth $15 in new things that I learned. That's significant because I've been writing about personal finance for more than 6 years now. I don't often come across new concepts. In addition, there's this little blurb on the back: "All book profits will go to causes that improve the lives of people around the world." That's a pretty loose statement, but when you read about the author's life, it really makes sense. Joe John Duran grew up in possibly the worst conditions possible, in an abusive family, in an African war zone (probably not the best term for what it is, but the most concise I can think of), with divorced parents. Today he's got his millions after having sold his company to General Electric. With MBA degrees from Columbia and Berkeley, I think it is safe to say he's a smart guy and probably worth reading.

If you want this book, you are going to have to wait. It isn't available until next Tuesday (January 22). The Money Code is available on Amazon for $10.17 (as of now). You can follow the book on Twitter (don't all your inanimate objects Tweet?).

As for the giveaway, leave a comment if you want to enter. Also be sure to leave your real email address so that I can contact you if you win. I'll rate all comments, giving anywhere from 1 to 4 entries with more thoughtful comments getting more value than ones that are simply "Show me the money." The winner will be randomly drawn from those entries. Comments posted before next Friday, the 25th at 11:59PM ET are eligible and I'll announce the winner soon after (most likely via Twitter). Prize fulfillment is being serviced by the media relations company.

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Posted on January 18, 2013.

Money Rules by Jean Chatzky Reviewed

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Money Rules by Jean Chatzky

Money Rules by Jean Chatzky

What's this? Two book reviews in two weeks? Are you really reading Lazy Man and Money? Have I gone mad?!?!

For years I've shunned book reviews. Why? Reading a book in addition to all the blogs and other things I read daily is a lot. It takes me 6 to read a book on a good day (I'm not a fast reader), and then writing up the review can take a couple more. It's a commitment and not one that fits well with my cat-like attention span.

So why am I reviewing another book this week? There are two reasons. One is that it's from Jean Chatzky. Despite the fact that I've been waiting three years for an email interview that her publicist promised, I think she's got some of the best advice of any personal finance guru. The other reason I'm reviewing it? It is 109 pages and just about every page consists of just a few sentences. Some are simply pictures. I didn't time myself, but I'm guessing that almost anyone can get through it in about 40 minutes.

Today's book is Money Rules: The Simple Path to Lifelong Security by Jean Chatzky. The book itself consists of 94 rules. I'm surprised at the number. You'd think they'd stretch it to 100 or 101 for marketing purposes. It seems like it wouldn't have been that hard to come up with a few more. Since the book is so short, this review will be as well. The 94 tips in general are pretty good ones, but ones that many would expect to know. For example, there was one about smoking, essentially pointing out the monetary costs to it. I'm on the fence about criticizing it because if it weren't there, the book might seem incomplete, but by including it, it went a little bit into the common sense territory. I think the best tips were the ones that pointed out the psychology behind spending or saving.

I didn't find myself agreeing with all the tips though. Tip #19 suggested that you carry $100 bills rather than $20 bills because psychologically it is more difficult to spend that big bill. If you combine that with rule #18, which says that you'll spend less if you pay in cash rather than credit, you may find yourself not being able to purchase things like lunch. Not every place takes $100 bills and some places limit the change that they have on hand. Another of the rules, #39 was so vague that I don't understand it all, "Always get three bids. Never take the high one." It's in the spend wisely section, so I guess this would mean that I should get three bids for landscaping and never take the most expensive one. That seems to be over simplistic. I'm sure there's a case where the most expensive of three landscapers does offer a better level of service.

Oh and I like do with all the books I review, just to prove that I did read the book I'll point out the page with the error. Page 101, which has tip #88 should be "leaving $20,000 to your kids", not "leaving $20,000 to you kids." The irony that I'm a great proofreader of other people's writing and a terrible one of my own is not lost on me.

The Bottom Line: I'm of two minds on this book. On one hand, there's great value in having something concise and to the point. On the other hand, it's not a lot of information for $13. I could see it as a gift for someone graduating college. It's got enough of the beginner tips, and it doesn't require a commitment to read. It also says, "I spent nearly $15 on you and I care about your financial future", so that's a good thing.

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Posted on April 3, 2012.

Millionaire Fast Lane by MJ DeMarco Reviewed

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Last year at the Financial Blogger Conference, every attendee received a package of stuff. It was the typical conference swag that you get. I got some funky sunglasses from Credit Karma and some other stuff that I probably won't use. One of those was a book called The Millionaire Fastlane by DJ DeMarco with the slogan of "Crack the Code to Wealth and Live Rich for a Lifetime." I didn't give the book much attention. (To be fair, I have literally dozens and dozens of personal finance books that people send me that rarely get opened).

With a picture of a Ferrari on the front and the "fast-lane" push, I figured it was a "get rick quick" scheme. (Note: Current printings of the book do away with the car on the cover.) Then I read the profile on the back about how he bills himself as the "Get Rich Slow" anti-guru, who has a passion for fast cars. I added it to the pile of books to read "someday." A few months later, I got an email from my friend Jeremy at Gen X Finance and he had asked if I looked at the book. I told him that of course I didn't. He said that it was much better than he thought. I trust his judgment so I got the book and opened up the first page and read a few of the testimonials. One of them talked about "leaving his J-O-B lifestyle", which is a no-to-clever acronym that multi-level marketers typically use for Just Over Broke. I thought "Great (sarcastically), this book has it all now..."

Nonetheless, I gave it a few pages, and then a few more. In a few hours, I was telling my wife how this could be quite possibly the best personal finance book I've ever read.

At over 300 pages it is long. It is also extremely dense... and by that I mean, I found myself reading every sentence in detail. What kind of detail? Well on page 147 at the end of chapter 21 there's a typo where DeMarco wrote, "Thing big to earn big", where he clearly meant "think." (I'm not picking on him for a typo, I'll probably have a half dozen in this review. I just wanted to be clear that I read every single letter in the book.)

The book itself is divided into 8 sections. However, I might have divided into two halves. The first half I'd describe as explaining why people aren't millionaires. The second half explaining how to get that millionaire mentality.

The First Half: The Financial Paths People Take on their Journey to Wealth.

The book has a running metaphor of a person driving on a highway. Seems appropriate enough since wealth is a journey (unless you win the lottery) and DeMarco admits to loving cars. There are various lanes you can get in, but DeMarco starts out with something that isn't even a lane... the Sidewalk.

The Sidewalk

The Sidewalk path to wealth (and by wealth DeMarco typically means 5-20 million dollars) is one where people make poor decision after poor decision sabotaging themselves. These are people who use credit to buy whatever they want whenever they want. These are people with "negative net worth or no savings." These are people who are glad to be done with school, because they don't need no more learning. I think he says that you typically find a lot of these people on Judge Judy or Maury Povich (don't quote me on that one).

Some of the people on the Sidewalk are there due to bad circumstances. In the end, it doesn't matter because the wealth journey is thousands of miles long and you are not going to get there by walking.

The Slowlane

DeMarco dubs the Slowlane, the typical personal finance stuff that you might read on this website. It's the plan of saving in 401K plans and Roth IRAs. It's relying on compound interest to provide you with a couple of millions... at age 65 where it won't buy much due to inflation and you will be too old to enjoy it. (DeMarco is a major buzz-kill when it comes to the Slowlane.) It's listening to people like Suze Orman, who makes her money via book sales and pre-paid debit card deals, not by funding 401k plans and Roth IRAs.

Even worse with the Slowlane, there's plenty of dangers. You may not live to 65 to spend your money. The economy may collapse leaving your years of savings not being worth what you thought they'd be. In any case, most of the people in the Slowlane don't ever own a Lamborghini and that's simply not the life that DeMarco wants.

The Fastlane

These are people who have 5-20 million dollars... or are on the way to getting it. These are the CEOs of companies. These are people like Justin Bieber and Alex Rodriguez. These are the people who invented urinal cakes that you might see on The Shark Tank.

How do all these people make money? They either have massive scale or massive magnitude. All these people impact millions of people. That's a huge scale. However, someone investing in real estate could make millions with a small scale of a dozen properties at a high magnitude (profits on housing is generally far greater than Justin Bieber CDs).

The Second Half: How You Get on the Fastlane to Wealth.

The second half of the book takes where the first leaves off and explores various businesses that have both scale and magnitude. This includes the following:

  • Setting up a corporation
  • Avoiding toxic decisions
  • Risk analysis
  • Creating a decision matrix (which is similar to my article: Finding the Perfect Home: Use a Worksheet)
  • Using your time effectively (tip: avoid waiting in line for a Black Friday deal, the money you save isn't worth rich people's time)
  • Getting the right education
  • Staying motivated

There's a lot more. One set of chapters deals with the things that a business needs to be "Fastlane successful." These Fastlane Commandments were particularly worth noting. I don't want to give them all away, but he does give one example of a Slowlane business. A Subway franchise would be a Slowlane mentality, because you can't grow scale or mangitude. Your scale is dictated by your location (for the most part). Your magnitude is dictated by Subway's pricing. A Subway franchise owner will make a predictable amount of income, but it is very, very hard to make it grow exponentially.

Where Robert Kiyosaki rightly gets criticized for giving vague advice, DeMarco is very specific. He goes into detail on how the Internet is an Interstate of Fastlane. There are a couple of others, but again, I'm going to make you read the book. There's a lot about branding and marketing. There's information on how to have a unique sales proposition (i.e. why should people choose your business over someone else's?)

The second half of the book really jumps around covering many topics. It's not as disorganized as I make it sound, but I would probably change the order of a few things. Also, the book does get repetitive in some places. It feels like it could be cut down a good 40-50 pages if the redundancy was removed.

The Millionaire Fastlane's Breaks down MLM as a Business

Scattered in the 300+ pages of the book there are a few about multi-level marketing, a topic that I tend to cover a lot since I realized how many people are losing money on it. I was pleasantly surprised to find it in there. I won't give you any details on what DeMarco says about MLM today. That's a longer article that I'm putting on the docket for Friday. Yep, I'm a tease.

Criticism

While I really feel this is one of the better personal finance books I've read, the one criticism I have is that DeMarco is very much against the Slowlane. I'm all for debating conventional wisdom. However, we can't all start companies and make products that impact millions of people's lives. I'm not saying that we shouldn't strive for the Millionaire Fastlane, but that we should have a strong Slowlane plan in place. If the Fastlane plan doesn't work, you won't end up on the Sidewalk.

As long as you recognize that, I think buying this book is a sound purchase.

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Book Review

Posted on March 26, 2012.

The Lazy Couponer Reviewed

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The Lazy Couponer

The Lazy Couponer

A couple of months ago, I mentioned how I came across a book called The Lazy Couponer by Jamie Chase. Since we shared a similar background, Lazy folk from Massachusetts, I kindly asked her to do a guest post for me. Those tips became the article: Top 10 Couponing Tips from the Lazy Couponer.

I promised Jamie Chase a book review and finally, I'm making good on that. (Though admittedly, you'll get more couponing tips from the previous aforementioned post.) The biggest thing that attracted me to the book was her unique approach to Extreme Couponing. Extreme Couponing on TLC is fun to watch because you see people get $600 worth of stuff for 12 cents and laugh a little bit at their hoard of 212 toothpastes. Just because I like to watch something on television, it doesn't mean that I want to live that life. I'm okay with only having 5 toothpastes at any given time. I don't want to spend hours collecting and looking through coupons to match up the best deals.

Chase's approach is much more practical. She comes from an approach of needing a couple of items and figuring out how to get them mostly for free. For example, this can include combining a store coupon and a manufacturer's coupon on an item at CVS along with a total order coupon like a "save $4 when you spend $20", which is fairly common for CVS (we got two of them last night for example). Some, actually most, of the couponing scenarios are a little more complicated than that. As Chase explains the key is to start off small and not try to absorb all the deals and all the coupon policies from all the stores. It's a recipe for disaster for a coupon newbie (like myself).

I learned a lot of things in this book. However, if I had to pin it down to three things that stand out, I'd go with:

  • I learned that CVS, Rite Aid, and Kmart actually have value due to their coupon policies. I had previously considered WalMart and Target the best drug store alternatives. (Well, I like to use military commissaries, but this isn't an option for most people.)
  • I learned that for something that seems simple, handing a coupon to a person, there's an awful lot of terminology to understand.
  • Finally, I learned that there are a number of websites with databases of what coupons are floating around there. If you just collect the inserts, you can use these websites to search for the deal, the insert, and the combination to best make it work.

Despite the title of The Lazy Couponer, I have to be honest... there's a fairly steep learning curve and it is a little overwhelming. I can see why Jamie Chase teaches a class in it. It seems like it might be best absorbed in small steps. For the frugally-minded folks, this book is probably worth more than its weight in gold. For those who are entrepreneurial-minded, you might find that learning to coupon effectively is a skill that distracts you from your main focus.

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Book Review, Review, Spending

Posted on March 5, 2012.

Debt Free For Life: David Bach on Bankruptcy

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A publicist for David Bach reached out to me last month to ask if I would be interested in reviewing his new book: Debt Free For Life. Usually, I pass. Reading a book and writing a quality review takes a dozens of hours for me. This request was different for a couple of reasons. One, it's David Bach, one of the best known personal finance authors. The other was the request itself. It wasn't to review the whole book - just one chapter.

The publicist clinched the deal when she mentioned that the chapter would be about bankruptcy. That's one area of personal finance that I never write about here on Lazy Man and Money. The idea is keep yourself out of situations where the b-word is mentioned. Still, for the purposes of being complete, it is something that should be covered. At the risk of angering PETA, this kills two birds with one stone, metaphorically one of my favorite things to do.

The chapter on bankruptcy was a little dry - which is to be expected. A chapter on bankruptcy isn't going to compete with Dancing With the Stars (unless you are dork like me). I don't know about you, but if I was facing bankruptcy, I'd put a high value on the information being valuable, not the entertainment value of the information. Here are a few of the points that David Bach covers:

  • The best advice he has to those who may be considering bankruptcy - Here's a hint, seek professional advice early - do not wait. (He couldn't emphasize the importance of this more.)
  • The two chapters of bankruptcy applicable to individuals - Chapter 7 and Chapter 13 - Most people identify bankruptcy with Chapter 7, a total declaration of being unable to repay. Fewer people know about Chapter 13, which allows for a more flexible repayment schedule.
  • The factors to look at before applying for bankruptcy protection - Such factors include: how much you owe, your income, the types of debt, the assets you own, and what your future plans are for the next 5 years.

Much of the chapter focuses on the final point. However, I learned some really interesting things about bankruptcy such as how you can keep your multi-million dollar home in Florida and Texas. Just make sure you live there 3.5 years before you declare and make sure you talk to a lawyer. Perhaps a more relevant tip is that retirement accounts can be protected. This is no only yet another reason to max out your retirement contributions, but also a warning not to tap that money to pay down credit cards.

Finally, the chapter ends with Bach making some very important points. Briefly paraphrased, filing for bankruptcy doesn't make you a bad person. It can cause depression and it may be wise to seek council beyond a financial and legal. He makes a great point that bankruptcy is temporary and that it too will pass.

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Book Review

Posted on March 28, 2011.

 
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