Wednesday 27 June 2018

Everything you need to know about personal finance in 1,000 words by C.J. Carlsen

While browsing to see if there were any interesting books in the area of 'personal finance' that I wasn't already aware of, I came a across "Everything you need to know about personal finance in 1,000 words" by C.J. Carlsen. The title was intriguing, and the price ($0 for the Kindle edition) was certainly a bargain. So I spent five minutes 'buying' the free Kindle edition and reading it via the Kindle cloud reader.

Overall, nearly everything in it I completely agree with, with a couple of minor tweaks. The advice to accumulate six months of living expenses before putting money into investment accounts (after paying off any credit card balances and continuing to pay off any credit card balances in full each month) is fairly sound, but rather than simply accumulating this in a savings account (often at very low interest rates), I would look around for a high-interest online savings account. Also, once you have a home mortgage, if there is a mortgage-offset account available, this might be preferable to a savings account.

The chapter on 'investing' is also US-centric, so the references to 401(k)'s, IRA's, SEP's, and 529 plans are only relevant to US readers. For those in Australia the approach would be to max out salary sacrifice limits into superannuation (possible a low-cost SMSF via eSuperfund once you have a sufficient balance to make it cost effective compared to an industry fund). The advice to invest via low-cost Target Date funds also has to be translated into the local alternative - in my case our SMSF invests via the Vanguard High Growth Index Fund.

Overall, I recommend this as a quick read for anyone starting out with learning about personal finance, and it is also a good 'refresher' of the fundamentals for anyone that already knows a bit about personal finance.

I'll include this book in my amazon affiliate booklist (not that I'll get any revenue from this, as its a free book), along with my other favorite books in the area of PF and investing.

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