Lazy Man and Money

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

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An updated version of American Girl: A Smart Girl’s Guide to Money can be found at Kid Wealth.

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 mad for treating them like teenage girls.

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.

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.

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.

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.