(This article first appeared in Real Estate Investor's Monthly.)
Newsweek personal finance columnist Jane Bryant Quinn and I have been friends for almost 30 years. Among other things, that means we are getting older than we like to admit. But as her new book proves, experience is often an advantage and the more experience, the bigger the advantage.
Her new book, Smart and Simple Financial Strategies for Busy People, lives up to the promise of its title. But the book is much better than the title promises. Her last book, Making the Most of Your Money, was great. It is very comprehensive, covering every aspect of personal finance thoroughly—maybe too thoroughly. It weighs three pounds and goes 934 pages. I strongly urged readers of my How to Get Started in Real Estate Investment book to read it cover to cover, but I fear few did. If they bought it, they probably used it only as a reference book.
In the latest book, Jane acknowledges that and produces a slimmed-down, streamlined book with slimmed-down, streamlined advice. Perhaps the best way to describe the difference between the two books is the phrase, “The perfect is the enemy of the good.” Smart and Simple… seems to say, OK, I told you before how to manage your personal finances perfectly, but you found it so daunting you did nothing. Here’s how to do a quick and dirty, but good, job. I offer this because you’re more likely to actually do it and that’s more important than doing it perfectly.
Jane has also learned a number of tricks and short cuts from watching her readers over the years. For example, she is very big on automatic debits and transfers. Instead of recommending you manually make a deposit to savings every pay day, she says you must set it up as an automatic debit. With this advice, she is combining her knowledge of the importance of saving and the power of compound interest with knowledge of human nature. It’s not enough to recommend saving. She now tells you exactly how much: 5% initially, then moving up to 10% and 15% as your income grows. Plus, she tells you to arrange with your employer or bank to automatically move the money into some sort of savings or retirement account.
Although Smart and Simple… is much lighter and thinner than Making the Most…, it manages to cover about the same breadth of subjects: budget, spending wisely, reducing debt, managing debt, rainy day, mortgages, homes, rental property, vacation home, college funding, mutual funds, all sorts of insurance, stocks, bonds, CDs, and monitoring your finances’ balance, yield, safety, and so forth. Only now the coverage is executive-summary style.
Throughout, Jane keeps it simple as promised. In addition to keeping simple to conform to the title, she also says repeatedly that after decades of experience, she has concluded that simple is best for all the other purposes as well. I highly recommend this book. I tried to buy three copies for my sons for Christmas, but could not find it in the stores. JTR