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The Simple Dollar

Book review: 'Smart Is the New Rich'

Every Sunday, The Simple Dollar reviews a personal finance book or other book of interest.

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7 | Save, Invest, Retire
Romans identifies three steps to a prosperous future: budgeting, saving, and investing. As you become more prosperous, your focus moves from the first to the second, then from the second to the third (I think we’re undergoing that second transition right now). Romans argues that no matter wherever you are along that spectrum, you should strive to spend only 70% of your income, striving to save or invest 20% of your income and then giving the remainder to charity.

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8 | Family Money
Honesty, honesty, honesty. That underlines this entire chapter. If you’re deceptive about your money with yourself, you’re going to wind up in financial trouble. If you’re deceptive with your spouse, you’re endangering that person’s financial future and doing what you can to make sure they don’t trust you when this duplicity is discovered. Honesty makes it all better – if you make a spending mistake, admit it.

9 | Health Care
Here, the politics come out a bit again with some discussion of the upcoming health care changes in the United States – something I’ve been hesitant to talk about because I’m pretty confident that what we actually have in 2016 or so won’t look like what we think it’ll look like right now, so why speculate? Still, I do agree with Romans that changes in some regard are coming, and I also agree with her that health care expenses are a huge problem. The best thing you can do is stay active and focused on your own health – eat well, get exercise, and do what you can to stay healthy.

10 | Small Business
A good small business rests on a good business plan, good relationships with the community, and startup funds that aren’t personally strangling you or strangling the business. If you have those elements in place, you’re much more likely to succeed than if those elements do not exist.

11 | Government
Quite frankly, I didn’t like this final chapter. It provided a healthy dollop of politics in a book that didn’t really need them, and that’s my biggest criticism of the book. Although I enjoyed pieces that showed how government and personal finance are connected, I didn’t like when the book kept going and moved into the stuff of political debates, which are endless and divisive. You’re not going to convince a conservative to be a liberal and you’re not going to convince a liberal to be a conservative. Rather than demonizing each other, let’s seek out some common ground and focus on making that common ground an absolute home run instead of arguing about minor social issues while trillions of taxpayer dollars vanish down a rathole.

Is Smart Is the New Rich Worth Reading?
If you can get past the politics, Smart Is the New Rich is a very solid, well-written, entertaining, and thoughtful general personal finance book. It ties specific personal finance issues to some general societal concerns quite well.

I just wish the author had chosen to keep the more politically-edged elements out of the book. While some will enjoy them, I just felt that it was out of place and is likely to distract some from the good personal finance message in the book.

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