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The Simple Dollar

Book review: First Generation White Collar

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

By Guest blogger / January 9, 2011

First Generation White Collar: A practical guide on how to get ahead and not just get by with your money, L. Marie Joseph, CreateSpace, December 2010, 114pp.

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As soon as I read the title of this book, I knew I had to give it a read-through.

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You see, the phrase “first generation white collar” pretty aptly describes me. My parents were decidedly blue collar, as were their parents. I was lucky enough to attend a good university, where I majored in a field (computer science) that stuck me behind a desk rather than on a factory floor or in a sorting room. I earned a salary, not an hourly wage.

In short, I’m that titular first generation white collar.

This book, by L. Marie Joseph, has the rather clear subtitle A practical guide on how to get ahead and not just get by with your money, which really strikes to the heart of the challenge of being a first generation white collar like myself. The problem for me was that my wonderful parents, in a desire for me to have a great childhood, often spent whatever extra money they brought in on things that would brighten my life, from a Nintendo to a trip to a baseball game and all sorts of things in between. In other words, I learned that when you had excess money, you should spend it before it’s gone. My parents absolutely had their heart in the right place, but the end result of their love and their financial situation is that, although I had a grasp on frugality, I didn’t have a grasp on money management and how frugality fit into that picture.

I’ve heard that same story repeated by a lot of people. It’s a story that this book seems to have been designed to address. It’s a story that the author, Joseph, also shares.

1. Debt
The logical place to start with a book like this is with debt, which is exactly where Joseph begins. Those who are first generation white collar often have little grasp of personal finance management and see debt as merely a convenience, thus burying themselves in it before they realize what’s happening. Joseph covers many different kinds of debt here, but one topic that I rarely see addressed in personal finance that’s focused on here is retirement debt – in other words, borrowing ahead against your retirement plan. This is a very dangerous route to follow, simply because almost all retirement debts come packaged with a lot of strings, such as a requirement that they be paid back in full if you lose your position.

2. Saving
Right off the bat, Joseph advises a 70/30 split. In other words, learn how to live off of 70% of your take-home income and apply the other 30% to savings. There are a lot of ways to split up that savings – Joseph suggests (among many plans) that you give 10% to emergency savings, 10% to retirement (such as in a Roth IRA), and 10% to saving for future purchases (like a new car, appliances, vacation, etc.). Again, Joseph offers a straightforwardness and a look at the topic of saving through a new lens in that a portion of your savings is intended to be eventually spent on a larger purchase. By saving now, you’re significantly reducing the long term cost of major purchases such as these.

3. Investing
Yes, investing often comes in the form of CDs and stocks and gold and bonds and real estate, all of which are discussed here. The part that interested me, however, was turning your savings into an investment in a business that you can easily run yourself to break free from the nine-to-five. A good business is simple: it simply has to take care of something that busy people with money in their pockets don’t have time for, but it happens to be something you enjoy. Walking dogs. Watching children. Keeping the books. Preparing meals. It’s all about taking command of that one thing of ordinary life that you enjoy that others perhaps don’t enjoy as much or don’t have time for in their lives.