How To Manage Personal Finances Book: Chapter 1- Why Read This Book?
Author’s Note:
I am posting a text version of this entire book on Substack, and video versions on YouTube. Email ken@stltest.net for details on the book’s publishing date in late ’24 or early ’25.
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Why read this book?
There are too many successful, intelligent people who don’t have a playbook to learn personal finance.
That’s why.
You may have an advanced degree and work as an expert in your field, but never spend much time thinking about personal finances- until you’re forced to. Here are some examples:
A mental health therapist who is managing her own practice. Holds a graduate degree and professional credentials. Frustrated with the process of filing her tax return.
The Yale-educated doctor and researcher who is told is by her realtor that “mortgage interest is 100% deductible on your tax return” and is told by her CPA that isn’t accurate.
VP of marketing with a Harvard MBA who is presented with three different proposals for life insurance and doesn’t understand how they differ.
All people I know personally. Highly educated and successful people who could make better personal finance decisions if someone gave them a playbook.
I hope that this book meets that need.
Format and style
I’ve made decisions about the book’s format and style to (hopefully) keep your attention, and to make the book more digestible.
Story-based examples
My Accounting Accidentally Substack content introduces finance and accounting concepts with a story. Here’s an example:
“Save 100% When You Don’t Buy Anything: Opportunity Costs and Compounding Interest”
I saw a meme of a sign outside a store that said: “Save 100% When You Don’t Buy Anything”. I thought it was funny, but also a useful way to introduce opportunity costs and compounding interest (both topics are covered later).
Now, had I just launched into these finance topics without the story, you might not keep reading.
As often as possible, I start a new topic with a story that I hope will keep you engaged. After all, my goal is to motivate you to keep reading, so you can use what’s in the book.
One example throughout the book
This book will follow the personal finances of Sally, and the decisions she makes along the way. You’ll see her personal budget, the investment decisions she makes, and other information.
By using one example and building on it, you can visualize how the decisions fit together. For example:
The monthly budget she creates early in the book impacts the amount she invests each month.
The retirement plan she has through work impacts how she invests (the stock and bond investments owned in the plan).
You can always refer back to other sections of the book to refresh your memory about Sally’s decisions.
Information in small amounts
As I introduce new concepts, the information will be in small amounts. For example, there are thousands of mutual funds to choose from.
I’m going to explain two.
Understanding mutual funds is a challenge- I’ll minimize the complexity by using just two examples.
Action steps you can take
My hope is that you do something with the information in this book- that you’ll take action.
You’ll see many suggestions for what do to next: Create a budget, reconcile your bank account monthly (many people don’t), talk to an investment advisor and/or a CPA.
Again, this is meant to be a playbook that motivates you to take some initial steps to improve your personal finances.
Ok, ready?
I am posting a text version of this entire book on Substack, and video versions on YouTube. Email ken@stltest.net for details on the book’s publishing date in late ’24 or early ’25.