Review Archives - Lazy Man and Money

The Best Personal Finance/FIRE Book You’ve Never Heard Of

October 29, 2018 by Lazy Man 7 Comments

You probably know that I’m not a fan of clickbait titles. That’s why I didn’t use a clickbait title.

Let’s make a deal. If you’ve heard of this personal finance book, you stick around as a reader. If not, I’m okay if you click away angry and never come back.

Have you ever heard of If You Made a Million by David M. Schwartz? It’s illustrated by Steven Kellogg who happens to have written and illustrated one of my wife’s favorite books, The Mysterious Tadpole. My wife read it when she was a little girl. Our own kids are very familiar with Alphonse.

By now you may have realized that If You Made a Million is not about helping adults understand money. It’s about helping children. But please don’t click away just yet. If there’s one thing I’ve learned over the last 2 years, it’s that adults can learn quite a bit from children’s books.

Let’s dig into what makes If You Made a Million so special. (By the way, I was not paid to write this review. I simply saw it at the library. I will however make a small commission if you purchase the book from the above link.)

If You Made a Million

Before I get started with the review, let’s get a very important number out there: 1989. That’s when If You Made a Million was written. Yes, the book is as old as Taylor Swift. It is also three years older than Your Money or Your Life, which is often considered the first FIRE book. It was also written 6 years before Suze Orman wrote her first book.

Being old doesn’t make things good. (This blog is living proof of that.) Let’s get to the actual content.

Overall, the book takes a child on a journey of earning and spending money. It starts with feeding a fish a penny, which will allow you to buy one of a shyster’s pebbles. It continues to educate children about coins with increasingly more difficult jobs and ways to spend the money. These first few pages are fairly boring, but they go quickly since there’s only a sentence or two on each page. It’s an important to build that foundation.

Once you get into earning a dollar, the book tells the story of compound interest. Here’s the first one:

At ten dollars, the compound interest story gets a little more exciting:

At one thousand dollars, the idea of checks and how they work is introduced. It’s simply much easier than carrying around a wheelbarrow of coins or even a bunch of bills.

At fifty thousand dollars, we learn about how mortgages work:

There’s a little more to mortgages. Specifically it shows how you keep giving money to the bank year after year for 40 years. The illustrations show the old man still physically bringing his check to the bank for his castle payment. It also explains that, this time, you are the one paying interest to the bank.

Finally we get to the FIRE part of the book. It only takes six sentences. The first four are:

“If you have some very expensive plans, you may have to take on a tough job that pays well.
If you think ogre-taming would be an exciting challenge, you can have fun and make a great deal of money, too.
Of course, you may not enjoy taming obstreperous ogres or building bulky bridges or painting purple pots.
Enjoying your work is more important than money, so you should look for another job or make less expensive plans.”

Remember what I wrote before about adults learning from children’s books? That last sentence is “Exhibit A” of that.

I promised you six sentences. Here’s two more:

Did you catch the financial independence message there? Having that kind of passive income gives you the option to not work at all, but maybe you should choose the work that interests you because doing nothing could be boring.

There’s a quick concluding page after that to get children’s minds thinking about what they’d do if they made a million dollars.

Final Thoughts on If You Made a Million

I found it surprising how well the math from 1989 holds up today. Obviously the banks aren’t paying 5.25% interest like the examples. However, we often work with similar (or even larger) interest rates assuming more risk and different asset allocations.

Also, the one million number at the end might not seem like enough today. However, it is $2,034,157.94 in 2018 dollars. You’ll often see $2 million as the target number for FIRE, so the one million number from 1989 is solid.

After the story ends, there’s a significant section of “A Note from the Author.” Here you get about 1500 words on each of the themes in the book: why money?, how banks work, interest and compound interest, checks and checking accounts, loans, and income tax.

Finally there’s a huge explanation on how he calculated some of the amazing numbers used in the book. These are things like a million dollars in pennies will stack 95 miles high and a million dollars in quarters would way as much as a whale. If you love geeky math, this is fun, but you could choose to skip it and still get all the financial lessons.

Now that you have a good understanding of If You Made a Million, I have two questions:

1. Are you going to live up to the deal and stick around as a reader?
2. Did you think my title was clickbait or just spot-on analysis?

Let me know the answers in the comments.

My 2015 Financial Year in Review

January 20, 2016 by Lazy Man 2 Comments

I thought about reviewing my 2015 finances at the end of the year, but I decided against it. I didn’t want it to get lost in the shuffle of all the other year-end reviews. Plus if you were anything like me, you were focused on the holidays. I didn’t have time to read too many article, much less in-depth ones covering a whole year.

Finally, I want to publish what I feel are my best articles when people are mostly likely around to read it. Now is a great time, because you can learn from my mistakes and have a terrific 2016, right?

I started to write this and realized that I had a ginormous amount to say on each area. It didn’t make a lot of sense to put it all in one article and lull you to sleep, so I divided it into a few different areas that I’ll cover over the next couple of weeks. (If you find this stuff boring, don’t worry, I’ll be working in other content as well.)

Here are the areas, I’m covering:

The first of the series will be posted in a few hours. I will update this post and link to the articles as they go live.

I’ve written most of the articles already and they have a common theme. They all start out with a challenging situation. In fact, the news on almost all fronts looks very bad. However, if you can make it to the end, you’ll find that overall each area has positives that may even outweigh the negatives.

It may sound trite to suggest that everyone should review their last financial year, but they really sound. If I didn’t have a personal finance blog, I doubt I would have sat down and wrote it out. I learned a lot by taking the time to put it on ~~paper~~ screen. I’m also a lot more optimistic on where my finances are going now that I’ve blasted through most of the challenges.

Amazon Echo, Revisited

June 2, 2015 by Lazy Man Leave a Comment

Last year (by a few hours), I reviewed Amazon Echo (read the review).

The Echo is an odd device that doesn’t seem to sit any existing category of consumer electronics. It is a digital information assistant like Apple’s Siri, Google’s “Okay Google”, or Microsoft’s Cortana. However, it isn’t designed to be portable. It also wasn’t released with a large base of knowledge. It is still far, far behind of the those Big Three phone platforms.

Instead of being portable it has very good speakers and microphones. It’s always listening for the key word, “Alexa” that tells it to pay attention to the next command. I’ve had it work from over 30 feet away when there are no other distracting sounds.

When I last reviewed the Echo, I was one of the first people to receive it. It couldn’t do too much more than play music. And the music was mostly limited to Amazon’s Prime library. It has Bluetooth, so I could pair it with my phone and run music through that. It works fine, except when you do that Alexa (the Echo) becomes kind of dumb. I can’t tell it to find the Aerosmith MP3s on my phone and play them.

You could do a few other things such as tell Alexa to set a timer or add an item to a shopping list. (Unfortunately, the shopping list wouldn’t work with Wunderlist, where I keep my lists).

In short, the Echo could do quite a few different things, but nothing particularly great. I bought in because I liked the concept and put some faith behind Amazon’s engineers being able to expand what it can do.

Since that review, Amazon has sent me regular updates of what they’ve added. Here’s a few of them:

Sports scores – This was kind of a no-brainer. I’m almost surprised it didn’t launch with them.
Traffic information – You have to set up your standard commute online first, but then you can simply ask, “Alexa, what is the traffic like?” Since I work from home, this isn’t particularly useful to me, but it could be handy for a few people.
Link Your Pandora account – This was a big one for me because I listen to Pandora more than my own music collection of MP3s.

I want to expand on that last one a bit. It is so much easier to ask Alexa to “play my Pandora” station than in it is to use any app. When I use the Amazon Fire TV Stick in my bedroom, I have to turn on the television, switch the source to the TV stick, and then navigate to the Pandora application. While the Fire TV stick has other advantages, score a win for the Echo for playing my music as soon as I can think about it.

These are all small changes to things that the Echo could do out of the box.

There’s one more big addition that has come about since my original review. The Echo can actually controlling items in your home.

For example Echo now works with Belkin’s WeMo Switch to allow you to turn on and off appliances. That might not be the most exciting thing in the world, but has been the basic building block of home automation for years.

The other thing that Echo can do is work with Philips Hue Lightbulbs. These bulbs are clearly for the “early adopter” audience. The bulbs change colors and can even sync with shows like 12 Monkeys on the Syfy network (which you should definitely catch). It’s out of my budget for the novelty, but it would be interesting to see my room’s change lighting with the action of my television. The Red Forest on the show was freaky enough without my whole room turning red.

The Echo can’t change the colors of the light bulbs right now. It is limited to turning them on and off and dimming them.

Again, this isn’t super-exciting, but it is baby steps. I don’t think locking and unlocking doors is too far away. If you have a lock that is wifi enabled, I would expect it to be coming down the pick any day now.

What I’m really hoping for though is for Alexa to read my email to me as I make breakfast. (If you are concerned about the privacy risk here, there are ways that it can be implemented without that issue.) I’d like it to work with my calendar. Tell me what appointments I have when I ask and add appointments when I tell it what to add.

If the Echo can work with my Pandora station there should be no limitation to working with my other accounts. Maybe in 6 months, I’ll be writing another review to tell you about it.

Who Wants In on the DRAFTApp Private Beta?

May 14, 2015 by Lazy Man Leave a Comment

This post is part of the #IwantDRAFT campaign with support from DRAFT, the app that uses crowdsourced data to help you understand and compare your portfolio, in partnership with Kasai Media. As always, the words and opinions, are mine and mine alone.

DraftApp

When I lived in Silicon Valley, I was fortunate enough to attend Finovate, a conference of financial companies, most of them very small start-ups. Companies like Mint and Lending Club cut their teeth there. I like to call that time in 2008 the Golden Age of consumer financial applications. As the years went on, companies seemed to put their focus on creating products that they could sell to banks. Those are great too, but they are a pain to write about. People can’t use them right away.

Over the last couple of days, a new company, DRAFT, has used Finovate to launch a new consumer-focused application for tracking your money. It’s 2008 all over again, and I mean that in an awesome way. They are opening up their private beta and all you have to do is give your email address to get in line.

So what is DRAFTApp? It’s a mobile application designed to help you manage your money in one place. It

One of the most interesting things to me is the crowdfunding aspect of draft. You can see this in the image. It gives you not only your returns, but also a comparison with the top 10% of DRAFTApp users. This really shines when it comes to understanding the investment fees that you’ll pay. I’ve seen hundred of charts about how fees greatly reduce investment returns… and perhaps I take it for granted that regular readers have seen some of them as well. Of course DRAFTApp highlights this as well.

I will be signing up for DRAFTApp just for this alone. (I’m going to bring down that Top 10% average… ha ha!)

One thing that I won’t focus too much on is the investment returns of the top 10%. By definition 90% of people are going to be disappointed in it. I had significant money in Europe, which didn’t perform well last year. I know my performance is going to be disappointing. I want to be careful to not let this disappoint change my diversification to chase winners.

That said, it is refreshing to have other options than just a comparison of my portfolio to the S&P 500. Many tools use a few basic indexes and in the last year, I didn’t compare well with that either. In most cases your portfolio isn’t an index, so I find such comparisons odd anyway.

There are a few more features that I could highlight, but I think part of the fun is discovering them on your own. So why not join the waitlist and give it a shot? You’ve got nothing to lose

Book Review: Failure to Launch No More

April 20, 2015 by Lazy Man 4 Comments

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?