Personal Finance Simply Understood

One of the rules-of-thumb for blog writing is BookCoverbrevity which is understandable, but it limits the amount of information that can be provided in a single post. This often segregates related information that is better applied in concert. For instance, I have posted individual blogs about debt elimination, compound interest, and saving. Each post contains valuable information related to its topic and provides practical concepts within certain boundaries, but they’re stand-alone pieces of the whole. The relationships between the areas can often be lost, and if one principle builds on another topic, there might be a reference but it’s still somewhere else. One of the reasons that I wrote Personal Finance Simply Understood was to consolidate the information and provide a single-source for what everyone should know about personal finance. The book covers a variety of topics (listed below), and provides a setting for combining related information, and to build upon previously covered concepts. There is also adequate space to show the relationships and effects that these areas have on each other and how we can use them to our advantage. The book format allows for arranging the topics in an ordered sequence, and for establishing a foundation before introducing the next principle.

As an example, there are many segments to personal finance, but a foundational area is control over where our money is going. Before we establish financial goals or move forward with a financial plan, we need to have firm control of our spending habits and a clear picture of our expenses. There are many things to consider. Starting a savings plan without a debt elimination plan and budget can cause a start-and-stop saving exercise that often includes withdrawals to meet expenses. This is discouraging as we painstakingly save a few dollars only to have to withdraw them and start over. Our personal finance plan requires a comprehensive approach. An article or blog post about investment strategies could be putting the cart before the horse if the reader hasn’t established a sound foundation in personal finance management.

If we’re serious about managing our finances making real progress toward financial independence, we need to develop and manage our plans using the entire financial picture. Take a glance at the chapter titles and subtitles below and see if you don’t agree.

Thanks for reading.

 “This is the book I should have read 40 years ago…a real winner!” – Hooked on Books, About Families

 

Personal Finance Simply Understood

Chapter One               Following the Herd

Chapter Two              Lifestyle and Spending

  • Shopping Decisions
  • Impulse Buying
  • Simply Put, Don’t Accumulate
  • Price and Quality
  • Some General Rules for Purchases

Chapter Three            Financial Goals

  • Setting Financial Goals

Chapter Four              Budgets

  • Sample Expenses
  • Sample Budget
  • Discretionary Income
  • Checking Accounts

Chapter Five               Debt

  • Simply Put, Don’t Accumulate Debt
  • Too Late
  • Paying the Largest Debt First
  • Paying the Smallest Debt First
  • Paying the Debt with the Highest Interest Rate First
  • Debt Consolidation
  • Mortgages
  • Credit Scores

Chapter Six                 Saving

  • Emergency Funds
  • Compound Interest
  • Saving Larger Amounts

Chapter Seven            Investments

  • Individual Retirement Accounts
  • Stocks
  • Dividends
  • Share Price
  • Ticker Symbols
  • Bonds
  • Laddering
  • Bond Returns
  • Stocks and Bonds

Chapter Eight             Mutual Funds

  • Ticker Symbols (Again)
  • Mutual Fund Costs
  • Index Mutual Funds
  • Active and Passive Management
  • ETFs and Other Investment Variations
  • Dollar Cost Averaging
  • Mutual Fund Returns

Chapter Nine              Risk and Return

  • Risk and Return
  • Diversification
  • Risk and Speculating

Chapter Ten               Asset Allocation

  • Further Diversification
  • Sample Portfolio Composition
  • Value and Growth Stock Funds
  • Target Date Funds

Chapter Eleven          Building a Portfolio

  • Determining Portfolio Return
  • Handling Deposits and Withdrawals
  • Net Additions/Withdrawals
  • Rebalancing
  • Changing Investment Strategy
  • Getting Started

Chapter Twelve         Survivorship Planning

  • Net Worth
  • Economic Value
  • Survivorship
  • Pre-retirement Expenses
  • Post-retirement Expenses
  • Putting Them Together
  • Life Insurance

Chapter Thirteen       Preparing for Retirement

  • Looking Far into the Future
  • Expenses in Retirement
  • Inflation
  • Pre-retirement Inflation
  • Post-retirement Inflation
  • When Retirement Is Near
  • Annuities
  • Delaying Retirement
  • Return on Investment in Retirement

Chapter Fourteen      Savings Longevity

  • Savings Longevity Methods
  • Withdrawal Amount as a Percentage of Savings
  • Withdrawal Based on Inflation Adjusted Expenses
  • Including Return on Investment
  • The Right Savings Amount

Chapter Fifteen          Taxes

  • Federal Withholding
  • Homeowner Benefits
  • Earnings and Interest
  • Tax Professionals
  • State Taxes

 

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