Miel and I picked up a copy of David Bach‘s “Smart Couples Finish Rich” a couple of weeks ago.
We have reviewed the book in some detail, and have decided to do three postings to give the reader an good sense of what Bach has to say. In this first posting we’ll give an overview of the book, and discuss the first few chapters in depth.
Just to editorialize a little bit, I was initially skeptical about David’s book. I had looked over his earlier Book “Automatic Millionaire“, and found it useful, but I had not seen its relevancy for couples. After reading through “Smart Couples Finish Rich”, I’ve been pleasantly surprised.
Bach begins the book by pointing out that financial management in couples is a LOT harder than finance for individuals. Both people have different expectations, priorities and ways of organizing their finances. He then gives a five point overview of the goals of the book:
1) Learning to earn harmoniously as a couple
2) Looking at value and determining what’s most important ones life
3) Using the couples “latte factor” to transform your income into a large nest egg.
4) Setting up “baskets”, for example “dream basket”, “retirement basket”, and “security basket”.
5) Growing your income by 10 percent in 9 weeks.
The introduction is devoted to Bach’s first point, living harmoniously as a couple. In this case, Bach makes a key point: it’s not just about money. Fundamentally successful couples communicate and plan together. Finally he lays out many of the myths that get in the way of effective communication and financial planning.
Myth 1: If we love each other, we won’t fight about money.
Fact 1: Money has little to do with love, and a lot to do with how much you fight.
Myth 2: It takes money to make money.
Fact 2: It only takes a little bit of money to make money, as long as patience and discipline are exercised.
Myth 3: We don’t make enough to be investors.
Fact 3: Everyone makes enough to invest.
Myth 4: Taxes and inflation are now under control.
Fact 4: These factors will never be completely under control.
Myth 5: If we don’t talk about money, everything will be okay.
Fact 5: If you don’t discuss money, you will likely die broke.
Finally, Back notes that couples who do communicate well and plan together are far more likely to finish rich than couples who don’t!
Stay tuned for more!
-James
P.S. As always emails or comments are welcome.
