It’s been a while since my last post about money books that I recommend. Things have been pretty busy for me as I’m currently finishing the last unit for my Master of Financial Planning degree.
You may have seen Carl’s sketches before. I know I’ve shown them to clients many times over the years. He has an incredible way of simplifying complex ideas into a single drawing. A lot of these types of ideas we have scribbled on white boards and on scrap paper in client meetings and I find it so powerful how an image can carry so much meaning. It’s said that a picture is worth a thousand words and when it comes to financial planning, it’s probably worth more.
This is quite a simple book, as far as finance related books go. You’re not going to get complicated math equations and hard to understand concepts. Richards breaks down the most important aspects of managing your finances and lays them out in an easy to digest way. This is one of those books I come back to again and again, when things start getting a bit complicated in my life.
When we look at clients financial situations and what improvement or adjustments we would recommend, it’s important to get the basics right first. There’s no point in having the perfect financial plan, if you’re not able to implement the changes in a meaningful and consistent way. So many of the financial problems people have is because they don’t get the basics right. Trying to run before learning to walk. Things like not saving an emergency fund (3-6 months of expenses), spending more than you earn, trying to time the markets, searching for the next moonshot investment, buying investments based on last year’s performance, comparing yourself to others, the list goes on.
As Carl says in the book ‘simple is not easy’ and seeing hundreds of clients throughout the years (and trying to look after my own finances), I can attest to this. Getting the basics right alleviates so many of the downstream issues. It’s like training in the gym, getting a solid foundation and prioritising correct technique, leads to the majority of the gains. Getting a decent exercise program, doing it regularly and eating clean is the most likely path to achieving your goals. Spending time trying to work out what the best program is, what the optimal lifting schedule is for maximum hypertrophy or analyzing micronutrients, is best left to the professionals or when you’ve consistently build a solid routine and now you have developed very specific goals.
We aim to help clients manage money well so they’re free to live an amazing life, not so they can be good at managing money. It’s a means to an end. Don’t lose sight of the focus. Building good money habits (and importantly avoiding bad habits) frees you up from worrying about money and allows you live the life you want.
I encourage everyone to get a copy of this book and familiarise yourself with the basics. Don’t be fooled though, simple is not easy.
If you want to grab a copy of the book, check out your local library (free) or they’re available on amazon (I suggest kindle as hardcopy is quite expensive).
Keep reading, keep learning, keep improving.
Cheers
Tim
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