smart couples finish rich step 1 review

September 21st, 2007

Smart Couples Finish Rich: Step 1 Review

Each Friday for ten weeks I am reviewing a chapter of David Bach’s Smart Couples Finish Rich. The start of the series and the first chapter review can be found here.

Last week I reviewed the introductory chapter of David Bach’s Smart Couples Finish Rich and was looking forward to getting started on the meat of the book – the 9 steps that were going to propel me into the top 1%. I’m not sure what top 1% that is: wealth, “richness”, knowledge… but any of those things seems to be up from where I am so I’m still excited.

So here we are at Step 1: Learn the Facts and Myths about Couples and Money. Sounds simple enough. Before delving in to the chapter I was pretty sure I would know all the facts, know the myths are myths, and pretty much not really learn much. I was right *and* wrong, in a good way.

The chapter starts with reminding us that it’s not just about money! Couples have to agree on their goals and vision as well. Two stories are used to illustrate this point. Then we are told it is what you *don’t* know that can wipe you out – and we are given 5 myths about money and their corresponding facts. I won’t give the whole book away but here are the 5 myths, read the book for the facts if you can’t guess them (and did you know these were myths?):

  • If we love each other, we won’t fight about money
  • It takes money to make money
  • We don’t make enough money yet to be investors
  • Taxes and inflation are now under control
  • If we don’t talk about money everything will work out okay

Each of these are expanded on with stories and examples. And then comes the fun part. There’s a quiz! Not about the book, but a quiz for you and your partner to each take and then compare answers to see what you know and don’t know about each other in regards to both your knowledge about your overall finances and your unique attitudes about money.

Reading this chapter the first time, the quiz is what had me most excited. Reading the quiz, I knew there would be some discussion starters for my spouse and I within it which was a nice surprise because as I said, I didn’t expect to learn anything new from this chapter. I thought we had talked about most things related to finances before reading the quiz, but there were a few questions we’d really never considered. My spouse and I both took the quiz and we did have a long conversation after the kids were in bed about how our own attitudes about money had been influenced by the values of our parents, and also about things like living wills and trusts. In my more careful read of the chapter as a whole, I found that a few things seemed a bit outdated – 12% is thrown around a lot as a figure for what your money, invested, will grow by and that seems… optimistic. Also… myth #4… does anyone think taxes and inflation are under control? Maybe people do. I guess I’m a skeptic. And it is a myth anyway ;) .

Overall, I really liked the positive tone of this chapter and the idea that with communication and determination, you can make a little money into a lot of money over time. The numbers examples might have been slightly dated but they were also very positive and reinforced the tenets of the chapter – you can make money with just a little money consistently put away, if only you put that money away wisely. The definition of “wisely” is for another chapter.

Next week I’ll be looking at Step 2: Determine the true purpose of money in your life. I’m going to guess that “to buy stuff” will not be the appropriate answer :) .

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