Generation Debt: A review June 2, 2009
Posted by BDO in Reviews.Tags: beating, book, college, consumer, Debt, economy, generation, government, high, review, school
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Generation Debt is a well researched description of the current state of the economy from the perspective of a generation that is just entering the work force. Though the book is very partisan leaning, there are nuggets of actionable truth that we can all agree on for all generations.
The state of the economy:
This perfectionism and pressure came with a steady diet of luxuries unheard of in previous times…Now we are smacking into the awareness that not only can’t we afford all the stuff we were raised with, we may never be the stars we were told we were, or achieve what our parents had. It would be hard for any American generation to accept… – Anya Kamenetz (pg 122)
We can all agree that the consumption of debt by consumers, businesses, and governments have altered the opportunities available for future generations. Our record spending has committed us to paying back massive sums of money that will be inherited by our future generations or stifle the current growth of this generation. Either way, the effects of this massive spending are just barely being experienced by “Generation Debt”.
The state of government affairs:
…the realities of poverty and disadvantaged in America today are very different from what they were when New Deal programs were first designed…Extended deficit spending can actually stunt economic growth, leaving everyone worse off. The budget needs to reflect a more fair division of national resources between the young and the old, the poor and the well-off, the past and the future. – Anya Kamenetz (pg 185)
Given our current state of the economy, we must all come together with a list of those things we are willing to give up as a “right of being an American”, so that the future prosperity of America can be sustained. Our current spending by all is unsustainable. We need to come to the realities of the situation and all make the hard choices of sacrifice until we get our debts repaid.
High School and College aged advocacy:
Its lobbying clout is dwarfed by that of the big student loan companies – it spent just $20,000 on lobbying in 2000, compared with $1.5 million spent by Sallie Mae. – Anya Kamenetz (pg 217)
Students are being priced out of college, or they incur massive debt in the name of a good education. However, for all the studies and payback, good jobs with that education are not being realized. What is the answer to rising college costs? Price caps? More grants? Those who are students, how are you staying away from so much debt? Share your thoughts.
Generation Debt was a great book to understand the many aspects to a very controversial topic about debt, benefits, needs, the American dream, and the realities that exist between all those ideas. I would recommend this book to help get a good grasp of the issues for further study.
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Book Review: A Kid’s Guide to Managing Money May 25, 2008
Posted by BDO in Reviews.Tags: book, Debt, family, finance, guide, joy, kid, kid's, manage, money, review, wilt
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A Kid’s Guide to Managing Money by Joy Wilt
The title supposes that kids are the only audience for this book. However, that is far from the truth. I found this book long ago when I was kid. I loved this book so much that I read it multiple times while growing up. And now, finding this book in my church library raised so many good memories that I had to take it home and read it again. I found that about the only thing childish in this book were the cartoon pictures. The lessons being taught in this book should be explained to every young adult leaving the nest and then reviewed annually.
The book is broken up into 4 parts: how money began, needing money, getting money, and using money.
The first two parts are a good review on how we got to the current state of monetary policy.
The third part teaches some basic lessons regarding simple ways a child could earn money. Again, this isn’t a list just for children. Many of things listed in the book for children are done every day by adults, like yard work and selling used gear (i.e., eBay). The multiple lists of ideas to help create extra revenue are, at a minimum, worth the read. Ideally, some of the ideas should be put into practice to help you generate income. The idea lists could even help you live on only one income, if that is your family’s goal.
The fourth part teaches the fundamental knowledge of creating a spending plan. It then guides the child through the hard decisions when there is not enough money for all things the child wants to do. Boy, is that not just a childish problem! To solve this problem, this book recommends for the child to:
1. Write down a list of desired items and then accurately place them in a “Needs” list or a “Wants” list in priority order.
2. Purchase only the “Needs” items first.
3. If there is money left over, purchase items on the “Wants” list in priority order.
4. If there are still items that “must” be purchased, then: make more money, reduce spending, or save money and buy the items later.
What awesome counsel this book gives to children!!! If only we, as adults, could learn these simple rules and abide by them, instead of getting complicated and damaging our finances with debt. Never does this book recommend to the kids to take on debt to purchase any items. Nor does the book endorse buying itmes without them being planned for. This is a zero-based budget book. It helps teach children that if their budget goes below zero, they must work harder or delay the purchase. I love it!
This book also has great advice on spending the money appropriately.
If you have kids, or want to relearn a great deal about finances, I highly recommend this book to you for practical and wholesome financial advice.
What other great kids’ finance guides are on the market?
What kind of financial training have you conducted with your kids?
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Book Review: Half Price Living May 17, 2008
Posted by BDO in Reviews.Tags: book, Debt, family, finances, half, living, one, plan, price, review, spending
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Half Price Living by Ellie Kay
Half Price Living is a very practical and educational book. This is a short read that inspires you to have the confidence to achieve the goal of living on only one income.
Today, we find many families have the husband and wife working all day while the children are raised by child care providers or substitute teachers. Having our kids raised with someone else’s values is another negative result of overspending. When we can’t control our spending and go into debt, it requires more money to pay off the debt and to squeak out a meager quality of life. Many families usually decide that if both spouses work, they could possibly “make more money” to pay off debts faster and get back to normalcy. However, they find after 10 or more years that both spouses are still working and their kids are already raised by someone else with someone else’s values.
We must first admit that we have a spending problem. Then we need to recognize that with a little forethought, knowledge, and a spending plan we can survive and thrive with one income and have a close family that shares in the values we find important.
Ellie Kay’s book shares many creative and insightful ideas on how to make our goal of a one income family a reality.
It will be tough to beat debt and prepare for one income, but with discipline, God’s blessing, and a good plan, we can do it.
Have you read Half Priced Living?
Are you a one income family? How are you surviving and thriving?
_________________
Book Review: Ordinary People, Extraordinary Wealth February 24, 2008
Posted by BDO in Multimedia, Reviews.Tags: book, extraordinary, finance, ordinary, people, review, success, wealth
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Ordinary People, Extraordinary Wealth by Ric Edelman has a lot of advance ideas about securing your future with investing. It was a great read and very user friendly, but not really the place for this forum.
The biggest news I learned coming out this book was the idea of holding onto a mortgage (debt) instead of paying it off. The author recommends putting more money into investments, vice paying off the mortgage. Mr. Edelman points out that given how the current tax code is arranged, your mortgage interest is deductible which makes it negligible compared to the amount of money you can make in many other investment products, i.e. stocks or bonds. Also, given the fact that once you pay down more principle on your home, you will not be able to see that money unless you take out a home equity loan, (debt) or sell the house; either is a very difficult decision. This difficult decision in turn tempts many people of going to other forms of quick cash, like credit cards which gets us back into our slavery of debt.
The author shows that most investment products are much more liquid for those times you need the money and earn a higher interest rate than your deductible mortgage. Therefore, by the numbers, it makes sense to not pay off your mortgage.
In addition, below is a video describing this message:
In the end, it is your decision. You can have the piece of mind that the house is paid off, or the extra cash from earned interest for emergencies or retirement.
What have you decided as far as paying off your mortgage?
Have you seen success in paying it off? Have you seen success in earning interest in your investments?
Book Review: Debt is Slavery February 23, 2008
Posted by BDO in Debt is Slavery, Reviews.Tags: book, Debt, financial, freedom, review, slavery
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Debt is Slavery by Michael Mihalik
The lessons learned from this book are basic, but sound. This is another great book to start our financial education. First it starts with the explanation of why debt is slavery to so many people in this world. Then it goes right into ways we can change the way we think about money. From understanding that marketers are trying everyday to separate us from our money and make us a slave to things in our driveway, to understanding that we must recognize the difference between an income producing asset and income wasting asset.
Also, saving is heavily emphasized in this book which is a great idea. We do not save enough. The best way to get into the habit of saving is to set up and automatic payment to a savings account. That way without forcing ourselves to remember to save, the computer already transfers money into the savings account of our choice. This book goes as far as challenging us to save up to 50% of our income in some type of savings account, which would not be a bad thing.
Go ahead and try this book out at your local library or purchase it here.
Have you read this book? What did you think of it?
Also, Millionaire Mommy Next Door has a great review of Debt is Slavery by Michael Mihalik.
My Millionaire Next Door February 13, 2008
Posted by BDO in Money Received, Money Spent, Reviews.Tags: book, Debt, millionaire, mindset, review
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The book The Millionaire Next Door by Thomas J. Stanley, PhD and Williams D. Danko, PhD creates the foundational research into the lifestyle required to beat debt. Through their research, they found that the majority of the wealthy individuals in America are not the Hollywood types that we dream about being someday. They are your neighbors that understand money is suppose to be a tool and not a slave master. These neighbors have the following concepts mastered:
“1. They live well below your means.
2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth.
3. They believe that financial independence is more important than displaying high school status.
4. Their parents did not provide economic outpatient care.
5. Their adult children are economically self-sufficient.
6. They are proficient in targeting market opportunities.
7. They chose the right occupation.”
If we are to master this tool called money and use it in such a way to help us beat debt, we must understand the above concepts and be able to alter our mindset/financial decisions. Unfortunately, most of us are not born nor raised to understand this very emotional tool called money. With good books like The Millionaire Next Door we can help train our mind and discipline our spending to master money into beating debt.
I would highly recommend this book as a start to your financial education. It is a great book to help you realize the mindset needed to achieve financial freedom from debt.
Have you read this book? What have you learned from this book that has helped you succeed?
A Kid's Guide to Managing Money (Ready-Set-Grow Series)
