Peace, Love & Spreadsheets

 Many years ago, I read a counterintuitive idea in Thomas Stanley books (Millionaire Next Door and its various offshoots) about generosity leading to higher net worth. Stanley's popular books did research on millionaires - Americans who we think of as "rich" - and laid out the trends in their research. They figured the millionaires would be big spenders who enjoyed luxury brands and expensive lifestyles, but they found the opposite in many case. For many of the rich people interviewed, they achieved their wealth through their frugal mentality and business savvy, not necessarily their income.  One idea I read changed me, and it's been many years so I want to write about it. They found that giving money away can actually lead to a higher net worth. This seems to go against our basic 2nd grade subtraction skills - if you give away money won't you have LESS of it? But here's what they found. Take two families. They earn similar incomes. One reports donating less t...

I like to read. My public library had quite the wait list for JL Collins' "The Simple Path To Wealth" but I jumped in it years ago because the book was so vehemently recommended in financial groups I'm in. If you also like to read, pick it up. It's calm, reassuring, and the advice is very popular. But while you're waiting on your library hold, here were my takeaways. 1) Spend less than you make. This book doesn't dwell for chapters and chapters on the IDEA that you should budget and plan to invest. It just states the obvious, then moves on to the next instruction, which is my favorite thing about it. It is not for people who are soaked in debt and can't resist the mall... it assumes that you are past that. 2) Invest in low cost whole market index funds. These haven't always been available. If you wanted to invest in the 70s or 80s, you probably had to pay someone who was good at stock picking, or learn to pick stocks yourself, and hope the compan...

All over the financial world you'll find fans, and anti-fans, of Dave Ramsey. I'd put myself in the second category. First, because I've read his books and they're REALLY heavy on not-spending, like "man I get it, move on to the meat of budgeting". But he keeps judging people for shopping at the mall for another 200 pages. I'm already not shopping at the mall. Then his website is ALL about buying more stuff. More books, programs, seminars, conferences. He's definitely making himself wealthy.  I'd dramatically change his baby steps. I don't get why people are such big fans of this method. In fact when I talk to people, they all seem to be fans of the first step, and that's it! So why give the whole philosophy so much credit? To re-cap, here are the baby steps: Save $1000 emergency fund Pay off all debt (except the mortgage), smallest debts first Save 3-6 months of expenses in a fully funded emergency fund Invest 15% in retirement Save for yo...