Sunday, February 5, 2017

Your Money Or Your Life: The Ultimate, Final Review

Readers! This is the final installment of our in-depth, chapter-by-chapter analysis of You can buy YMOYL here, and you can find the first post in the series here.

***************************

Consider this hypothetical situation: What if you could easily surmount all your current financial challenges--and begin a surprisingly rapid journey towards financial independence--if you agreed to do just two things:

1) Carefully read a book and execute nine simple steps of financial awareness.
2) Spend 2-3 minutes each day tracking your spending, and 5-10 minutes each month putting some marks on a chart.

Would you then do these two things? Would most people do these things?

I can't predict what you (or any specific reader) will do, but I can speak to the average person's general tendencies. And those tendencies are not good. My anecdotal experience suggests that less than half of the readers who pick up a copy of Your Money Or Your Life will actually do all the steps. A meaningful percentage won't do any of the steps. Sad, but true.

Then again, I didn't write this series for the average person. I didn't write it for someone who would pick up one of the most important personal finance books of all time and not bother to follow the advice in it.

On the contrary, I wrote this series for readers with a sincere desire to get on top of their financial challenges, who have an anti-excuse mentality, and who are willing to identify and overcome any limiting beliefs and mental blocks standing in their way.

These readers will choose a mindset of financial awareness and consciousness. If they feel a bit little silly tracking expenses or calculating their real hourly wage, they quickly get over themselves. And they make sincere efforts to apply tips and advice, rather than concocting phony reasons why that advice can't work for them. Most importantly, they recognize and stop all ego-defending behavior, because they understand that our egos often make psychologically convenient rationalizations at the expense of our financial health.

To those of you willing to dedicate your attention to this book, who put time and effort into executing each of the nine steps, and who are willing to go beyond the book and read most (or preferably all) of my Post-YMOYL reading list, I offer you a solemn promise: you will all become rich--in the best and broadest sense of the word. And it will happen sooner than you think.

More importantly, you will have profoundly rethought the entire nature of personal fulfillment. I sincerely hope by now that you realize this book is about more--much more--than just money.

I've said this before and I'll say it again. People pay thousands of dollars--even tens of thousands of dollars--on financial workshops, on debt counselling and on financial planning fees to learn a fraction of the things you learned from a ten dollar book. From the bottom of my heart, I congratulate you for what you've done.

Now get back to your Wall Chart!

***************************
A Postscript
I'd like to offer readers a grateful thank you for indulging me over the course of this long series. Correction: over the course of this preposterously long series.

It was by far the most challenging thing I've ever done here at CK--partly because I wrote everything on short deadlines, partly because it's a new and different subject for me, and partly because there's a whole lot to say about all of the various issues that arise in the world of personal finance.

When people discuss money, spending, saving and investing, all sorts of emotions come into play, both above and below the conscious level. That's why these posts often delved into psychology, limiting beliefs, self-fulfilling prophesies, and our unending battles with our egos (an aside: for me as a writer, this was one of the most interesting and challenging aspects of this series). And of course there was also plenty to say about the various day-to-day mechanics of managing and executing each of Your Money or Your Life's various steps.

That's why these posts were long, some well over 2,000 words. Once you add everything up, the series in total easily exceeded 25,000 words. And this isn't exactly easy reading: some of these posts are densely written, many contain difficult and challenging subjects, and a few will probably make readers downright angry and defensive.

In other words, this is one of the most ambitious writing projects I've ever taken on. And at the risk of sounding like an arrogant douche, I'm really proud of it. There are a whole lot of insights and information here that you simply won't find anywhere else in the world of personal finance.

One last thought, a humbling one, about the readership and pageview patterns of the YMOYL series. Normally when a new post goes live here at Casual Kitchen, there's a burst of pageviews on day one and day two after publication, followed by a gradual decline. By now, readers here know pretty much what to expect with my editorial schedule: a post every Tuesday, a Weekly Links post every Friday and--once in a while--a bonus post some other day during the week.

But the YMOYL posts had a completely different readership pattern. The pageviews were much lower in the first few days after publication, running at less than half my normal level. Sometimes way less than half.

In fact, in the fourth or fifth week of this series I was really getting depressed with the entire project. I was spending mountains of time pounding out these posts each week, but as far as I could tell, nobody seemed to care. [PS: A special and gigantic thanks to Laura for bucking me up during those discouraging weeks with an always-well-timed "Keep writing Daniel, your stuff is good. Keep putting it out there."]

Well, it turned out that these posts just had a delayed readership pattern, and in the three or four weeks following publication, pageviews began growing dramatically. Perhaps readers were saving the posts for later (especially the longer, denser posts), or perhaps readers needed to get their hands on a copy of the book first before they could get started. Whatever the reason, I'm thankful so many readers took interest.

As always, keep those comments, emails and tweets coming. And if you have any lingering questions, issues, complaints or subjects you'd like to see addressed, I want to hear about it! Once again, I'm profoundly grateful to my readers.

One final, final, FINAL word: Our in-depth series on Your Money Or Your Life attracted a ton of new readers, but I feel like this post series is a powerful resource that should get in front of still more people. I'd be truly grateful if you would link to this series, or if you would share it with anyone who you believe might benefit from reading it. Thank you!

Coming Up: Your Money Or Your Life: The Full Archive





How can I support Casual Kitchen?
If you enjoy reading Casual Kitchen, tell a friend and spread the word! You can also support me by purchasing items from Amazon.com via links on this site, or by linking to me or subscribing to my RSS feed. Finally, you can consider submitting this article, or any other article you particularly enjoyed here, to bookmarking sites like del.icio.us, digg or stumbleupon. Thank you for your support!

Friday, February 3, 2017

The Official "Your Money Or Your Life" Reading List

We're almost done with our series on the book Your Money Or Your Life, just a couple of posts to go. Join us! You can buy YMOYL here, and you can find the first post in the series here.

We'll return to our more typical food and health-related content later in February. As always, thank you, readers, for your time and attention!


*************************************
Readers, this reading list contains two sections. Part 1 contains a two-part list of what I consider required reading for anyone interested in becoming a more knowledgeable investor. (And if you closely read every investing book below, you'll be better educated than the majority of investment professionals on Wall Street. Don't think for a minute that I'm joking.) Note also, I've added and subtracted a book or two from this list since we last ran this series five years ago!

Part 2 is a bonus reading list based on the philosophies of Your Money or Your Life. It's for readers seeking additional ideas and strategies for living a simpler, happier and less consumerist life.

PART 1: Recommended investing books:

The Investor's Manifesto by William J. Bernstein
Common Sense on Mutual Funds by Jack Bogle
Stocks for the Long Run by Jeremy Siegel
One Up On Wall Street by Peter Lynch
Real Money: Sane Investing in an Insane World by Jim Cramer
The Dhandho Investor by Mohnish Pabrai

For intermediate/advanced investors:

The Essays of Warren Buffett (free, public domain PDF)
Common Stocks and Uncommon Profits by Philip Fisher
The Intelligent Investor by Benjamin Graham


PART 2: Executing the strategies of YMOYL... and going beyond:

Early Retirement Extreme by Jacob Lund Fisker
How to Retire Happy, Wild, and Free by Ernie Zelinski
The Complete Tightwad Gazette by Amy Dacyczyn
Getting a Life: Strategies for Simple Living Based on "Your Money or Your Life" by Jacqueline Blix and David Heitmiller

Anti-consumerism and simple living:

Simple Living: One Couple's Search for a Better Life by Wanda Urbanska
Work Less, Live More: The Way to Semi-Retirement by Bob Clyatt
Affluenza by John DeGraaf and Thomas Naylor
Voluntary Simplicity by Duane Elgin
Radical Simplicity by Jim Merkel
The Overspent American by Juliet Schor
Living Simply with Children by Marie Sherlock


A final (self-promotional) word: Let me mention once more that one of the easiest ways you can support Casual Kitchen is by making any (or preferably all!) of your Amazon purchases via affiliate links on this site. The price you pay at Amazon is the same, but if you use the links here at CK, I receive a modest commission based on the cost of your purchases. In other words, if you're already planning on a purchase at Amazon, consider stopping here first and then going to Amazon's site via the affiliate links here. This is a great way to support Casual Kitchen at zero incremental cost to you.

And if you know someone who might benefit from one or more of these books, consider making a gift purchase. Help someone get on top of their financial game while supporting my work here!

Up Next: YMOYL: The Ultimate, Final Review


How can I support Casual Kitchen?
If you enjoy reading Casual Kitchen, tell a friend and spread the word! You can also support me by purchasing items from Amazon.com via links on this site, or by linking to me or subscribing to my RSS feed. Finally, you can consider submitting this article, or any other article you particularly enjoyed here, to bookmarking sites like del.icio.us, digg or stumbleupon. Thank you for your support!

Wednesday, February 1, 2017

Becoming a Sophisticated Investor: Six Steps

We're almost done with our chapter-by-chapter series on the book Your Money Or Your Life, just a couple of posts to go! You can buy YMOYL here, and you can find the first post in the series here.

We'll return to our more typical food and health-related content later in February.

*********************************

Here are six key elements that I believe are absolutely central to becoming a knowledgeable, savvy and sophisticated investor:

1) Understand that the worst lie ever told is "the stock market has a 10 percent average annual return."
Everything about this quote is a lie, including a and the. The days of putting our money into stocks and having it magically double and double and double are gone. The 1990s are over. And the first step towards being a sophisticated investor is to have humility about your investment expectations.

2) Never give your power away to financial advisors, brokers or "experts."
Never allow yourself to be sold investment products by someone else. Instead, choose your own investments, do your own research and have your own reasons.

Note that this doesn't mean a financial advisor can't be useful to you as a source of investment ideas to consider, or as a resource to assist you in properly diversifying your investments. In fact, I've even offered my services on a fee-per-hour basis to help people figure out how to structure their investments and make the most out of their capital. However, you are still responsible for your own money. Know enough to measure your advisors, and never put your financial fate into someone else's hands. To borrow a quote from Your Money Or Your Life: you and you alone are responsible for investing your money since no one cares about the outcome more than you.

3) Get your investing costs down. And keep them down.
Know exactly what fees and commissions you pay at all times and seek to minimize them. Shun complex products where the fee structure isn't obvious. And never pay an up-front sales load to buy into a mutual fund. Ever. Instead, find an index fund or exchange traded fund that invests in the same asset class and pocket the difference in fees.

PS: Read at least one or two books by Jack Bogle in order to wrap your mind around the various pitfalls of the mutual fund industry. Start with Common Sense on Mutual Funds.

4) Never, ever reach for yield.
We all want income from our investments. Duh. But please keep in mind an important Wall Street saying: More money has been lost reaching for yield than at the point of a gun. A big part of being a savvy and sophisticated investor is building an understanding of what types of investments should generate what types of yields. Understand what makes a yield attractive, and what makes a yield too good to be true.

5) Don't be greedy or materialistic with investing, just like you shouldn't be greedy or materialistic with your consumption decisions.
Don't presume that you're some secret king who's going to find the next Cisco, Microsoft or Apple. Forget all that. This is simply not an intelligent philosophy of investing, and investors using this "strategy" are on a fast road to lossville.

Instead, keep things simple: find investments that pay you reasonable income in the form of dividends or interest payments, stay diversified, and patiently build your holdings.

6) Stay liquid. Have more cash available than you think you need. At all times.
This means you will never be forced to sell during a down market or when your investments are deeply out of favor. Instead, you'll have the resources to stand there and buy when everyone else is selling in a panic.

Think back to the 2008-2009 market correction. The market gave you tremendous "opportunities" to panic and sell, and if you were insufficiently liquid during this period, you were most likely blown out of the market--right at the bottom. However, if you had plenty of cash at the ready, you were able acquire amazing income-producing investments at incredible discounts.

Final Thoughts
No single blog post can, by itself, make you into a sophisticated investor. You'll have to do a lot more reading, and you'll have to take ownership and responsibility for developing your own expertise. For those readers who are ready to take the next step towards becoming savvy and advanced investors, I'll prepare an investment reading list to assist you. Stay tuned for our next post.

Finally, readers, what would you add to this list? I want to know.


Next: The Official "Your Money Or Your Life" Reading List





How can I support Casual Kitchen?
If you enjoy reading Casual Kitchen, tell a friend and spread the word! You can also support me by purchasing items from Amazon.com via links on this site, or by linking to me or subscribing to my RSS feed. Finally, you can consider submitting this article, or any other article you particularly enjoyed here, to bookmarking sites like del.icio.us, digg or stumbleupon. Thank you for your support!