The Millionaire In You
Ten Things You Need to Do Now to Have Money and the Time to Enjoy Itby Michael LeBoeuf, Ph.D.
A lot of the advice offered here is basic common sense, but the readable, entertaining prose and numerous concrete examples give it a lot more impact than when your father told you the same thing. Unlike a lot of "how to get rich" books, this one says you don't have to be an entrepreneur to become a millionaire. You just have to save your money instead of spending it.
Dr. LeBoeuf's recipe for becoming a millionaire is extremely simple: save your money and invest it in index funds. It's different, because most books of this type advise you to become an entrepreneur, network, take risks, and get contacts that will get you those golden, high-payoff investments. But not everyone has those skills, or wants to develop them, while anyone can save money and invest in index funds.
It's something that most of us have heard before: that the vast majority of managed mutual funds do not out-perform index funds (funds that simply invest in every stock in the S&P, or the Wilshire, or the Dow-Jones - whatever index the fund is based on). The stock market is too unpredictable for even the "experts" to foretell. Index funds do well because they aren't managed. You don't have to pay a manager a big salary. There aren't a lot of trades, since nothing is bought or sold unless the index changes. That means no transaction fees, and fewer taxes (since taxes are only paid when stock is sold). Even the best manager can't reliably do better than a simple index fund, when fees and taxes are taken into account - and the most do worse.
Although this is common knowledge, you rarely find financial professionals willing to tell you to put it all in index funds. According to the author, this is because CPAs, financial planners, stockbrokers, etc., make their money by picking stocks and funds for you. Index funds make them superfluous.
Dr. LeBoeuf buttresses his arguments with statistics, anecdotes, studies, tables, and quotes. For example, to drive home his claim that anyone can become a millionaire, he points out that immigrants to this country become millionaires at four times the rate of born citizens, despite their having to learn a new language, assimilate into a new culture, and deal with the prejudice that comes with being an outsider. But they come here believing in the American dream, and willing to work for it, and so they succeed. He quoted one immigrant millionaire as saying if we citizens-by-birth could spend just a year in his native country, we'd appreciate the terrific opportunity we have, just because we're Americans. We've won the lottery, just because of where and when we were born, but most of us don't realize it. The poor in the U.S. have a higher standard of living than most people in even "developed" countries like Sweden and U.K.
If the book has a weakness, it's that the author didn't retire a millionaire because of saving and investing in index funds. He wrote books on it, and made enough money to retire at age 47. That's not something the rest of us can easily emulate. However, he does have anecdotes about other people who have done it just by saving. My favorite is one about an IBM engineer, who planned to claw his way up the corporate ladder and become rich that way. Then one day he read an article about height discrimination in the boardroom. While 30% of American men are 5'-7" or under, only 3% of corporate executives are that short. Short people just aren't seen as leaders. He was depressed about this at first. Then he went to his manager, and asked to be demoted from engineer to engineering technician. That made him a hourly wage earner, instead of on salary, and made him eligible for overtime. He earned a lot more money as a technician than he did as an engineer, saved and invested it, and retired at age 40.
In addition to the material on personal finance, there's advice on time management and goal-setting, which the author sees as an integral part of financial planning. Most of this will be familiar to anyone who's read a few self-help books, but it serves to emphasize his argument that becoming a millionaire is a choice we make...not once, but every day, whenever we decide to save or spend.
This book is chock-full of the advice we should have gotten when we were young (or did get, and ignored). It's useful and inspiring for readers of all ages, and especially so for young people who just starting out. I suspect many a graduate will be receiving this book as a gift.