Sunday, July 4, 2010

Book Review: "The Money Book For The Young Fabulous & Broke"

Quick take: Great book for the personal finance illiterate, Suze Orman had some great advice on how to get  through the broke years and move toward financial freedom. Focusing mainly on:
1. Utilizing 401k plans
2. Getting out of Debt
3. Avoiding the temptation to purchase large ticket items

The Boring details
Suze encourages everyone to meet with their HR representative and find out about their companies 401k plans. Most importantly find if the company offers a 401k match. If they do, it is a must to contribute enough money to qualify for the maximum matching contribution. This is FREE money that your company is giving you. Learn what funds your 401k are investing in and look into the returns.

2. Get out of Debt. Having no money is your savings account is not a reason to put money in it instead of paying off debt. Why put money in a savings account that gives you 2% return when your credit card has a 22% interest rate. Pay all of your minimum balances each month to avoid paying fees. Pay any extra money on your card with the Highest interest rate not the highest balance. As soon as one card is paid off apply that monthly fee to the next highest interest card until all credit card debt is gone. This may take years to accomplish but is crucial to reach financial freedom.

3. Buying fancy cars or expensive clothes to impress people you don't really like is insane. When money is tight wasting precious dollars that could be used towards powerful retirement vehicles is financial suicide.

Overall I felt like the book had great advice if you had little knowledge about personal finance. It had no captivating chapters and was a drag to finish. However the advice within if followed would lead to financial freedom.

I still consider myself Young Fabulous and Broke, what helped you get passed the Broke part?

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