New Book Offers Practical and Easy Tips for Saving and Investing Wisely

In Spending Your Way to Wealth: Setting Your Compass Course to Steer in the Direction of True Wealth, Paul Heys separates myths and untruisms about investing from facts and practical strategies that will help you learn how to save, spend, and invest wisely. Not since the Great Depression has such knowledge been so necessary as we continue to face the financial turmoil caused by the recent coronavirus pandemic.

Heys served as a vice president at Smith Barney, where he accumulated a wealth of insights about investing. He has also been a flight instructor who learned how to teach others how to do complicated, sometimes tedious things, in a thoughtful and calm manner. That background has paid off in making Spending Your Way to Wealth an easy-to-follow guide any would-be investor can benefit from. Learning how to invest properly takes some thought and, as Heys reveals in these pages, a strong ability to remain calm when the markets may not be doing what you wish.

Heys begins by meeting readers where they are. He explains that the actions people are likely to want to take when investing are normal, and he explores the psychology behind why we make those decisions. As he shows, nothing is wrong with being normal, but we want to get to “normal plus” by learning to restrain ourselves to prevent the consequences normal behavior could cause. He uses the metaphor of Ulysses and the Sirens to describe our own need for restraint. Ulysses had his men tie him to the ship’s mast when they sailed past the Sirens so he could hear their beautiful music but resist the temptation to join them, which would have resulted in his destruction. Similarly, we must tie ourselves to the mast when we invest by restraining ourselves from knee-jerk, short-term decisions that will be detrimental to our long-term goals.

Before discussing investing, Heys asks us to look at how we spend our money and how it reflects that we are normal. I particularly appreciated his introduction of the concept of “spilling.” Spilling is when we spend money beyond what we need to spend. For example, the generic brand of spaghetti sauce may meet our needs. The expensive name brand is more than we need. The difference between the price of the generic brand and the name brand is money we spill-money spent that didn’t need to be spent and that could have been saved and invested. However, because it is normal for us to think the name brand is better, we are willing to spill money on it. We also tend to do things like assume a more expensive bottle of wine is superior to a less expensive one, although Heys reveals that studies show people, when not told the price, may find that they get more enjoyment from the less expensive wine.

One of the biggest ways we spill money is with our credit cards, which allow us to buy things we don’t need or can’t afford. Heys offers tips for how to handle our credit cards, and we definitely need help because only 35 percent of people pay off their credit cards each month. The rest spill their money by only making minimal payments and thereby paying high interest rates that can make even buying the generic brand of spaghetti sauce, when charged to a credit card, multiple times more expensive than if we bought the name brand. Heys goes on to discuss the difference between price and value and how understanding it can teach us to avoid spilling. He also advocates for keeping a monthly journal to become aware of how much spilling we are doing. Most importantly, he makes us aware of how a little spilling can be detrimental to our future. For example, if we leave a light on for twenty-four hours that doesn’t need to be on, it will cost us 14 cents. Over time, that will add up-to $77,680 in a lifetime, and if that money were invested over forty years, to $367,895. Who couldn’t use an extra third of a million or so dollars? So why do we throw it away by leaving lights on? Turning off that light may mean the difference between living in the style we’re accustomed to in retirement and watching every penny.

Heys then goes on to give investing advice. It’s more detailed than I can cover here, but he explores investment behavior vs. investor behavior, he demystifies risk, and he looks at untruisms such as “Don’t invest more than you can afford to lose.” He advocates for investing long-term in an index fund-advice directly from Warren Buffett. He also reminds us how everything is relative so we should not let others determine the value of an investment-it isn’t about the price but its ability to meet our current and future needs. We don’t have to chase after an investment with high risk that could provide us with 25% returns if a lower risk investment that will provide 10% returns will meet our retirement needs. I find this advice comforting.

Most of all, I appreciated in these later chapters about investing the return to the idea that we must restrain ourselves-tie ourselves to the mast when investing. We can learn that restraint by turning down the noise. We don’t have to follow the stock market every day; we can quit listening to all the experts on TV; we don’t even need to look at our statements daily, weekly, or monthly. Quarterly is sufficient, and then we can adjust if needed. The main point is to trust that the market over time always goes up, and if we’re in it for the long-term, we will benefit from staying the course.

Altogether, Spending Your Way to Wealth is the only book I know to so fully reveal so many of the myths and misconceptions many of us have about investing. I felt relieved after reading the book because I realized what I needed to do was much simpler than many might think. I don’t have to become an expert on the stock market. I just need to find a trusted financial advisor who will help me find the right funds for me. Then I have to contribute regularly to those funds and sit back and let them grow without trying to micro-manage them. This book’s message is straightforward and more relevant than that of any other financial advice book I have read, and I’ve read many of them.

Why aren’t these things taught in our schools so we can all begin to save early? Spending Your Way to Wealth would be the perfect book to give every high school student as a graduation gift to start them on the right path. Actually, anyone interested in investing-and that really should be everyone since we will all someday need to retire-will benefit from reading this book no matter how new or seasoned they are as an investor. In addition, Heys provides valuable information at his website, including an investorship calculator to help you track what you spend against what it would be worth long-term if you invested it. Check it out.

Book Summary: Guide to Investing in Gold and Silver – Written by Michael Maloney

This is a great education book about real money. Mike reviews sound money principles that have lasted throughout human history. One thing is consistent and that is Gold and Silver are real money. In today’s world of fiat currencies, Gold and Silver are tools you can use to preserve and protect your wealth. Mike reviews the differences between currencies, real money and fiat money. Fiat currency is basically paper money not backed by anything. We will go into some detail on why this is dangerous and the average investor should at least understand the significance of debased money and bloated fiat currencies. With the 2008 economic meltdown along with Ireland, Greece and other bankrupt countries, we as small investors need to be educated so we can protect ourselves.

Why is this important to me?

This is important because the greatest wealth transfer is happening right now and that transfer is moving away from America and not toward us. This needs to be a priority if you want to protect yourself and your family.

Several things are happening but 90% of the general public does not truly understand it. This is understandable because of the noise between the political bobble heads on CNN and Fox News diverts the real issues. The real issue is this – The Federal Reserve is a private institution that is not regulated and not audited. They control the financial system. These guys are the quintessential king makers running the country in the background. Thomas Jefferson was admittedly against a central bank in the United States. For more information on this subject, you can listen to Ron Paul. He is the congressmen from Texas that is all over this stuff.

The big swings that we have seen from the Internet boom to the housing bust have been a direct result of the Fed. Not many people know this and some will bitch that this is wrong. The Fed has been keeping the interest rates artificially low which spawned the bloated housing market. The relaxed debt to equity and the financial instruments of mass destruction known as CDO’s & MBS’s and other weapons nearly killed the country. Financial education is needed for us little guys to have a chance. Read this book to get your eyes opened. One thing that is not being said in main stream media and is more potent than Terrorism is the following: If the dollar is lost as the world’s reserve currency then our total standard of living will reduce by a minimum of 25%. Right now it is already tough for 85% of American families. Another wealth transfer could put the last nail in the coffin. Get educated.

There is a ton of information in Mike’s book. The history of currency debasement is outlined from every major empire including Persian, Greek, Roman, British and now American. Currency debasement, inflation and taxation are the wealth stealers. If your money is a candle then taxes and inflation are the flames burning at both ends.

1. Ingenuity – I am not a doom and gloom person. I believe in the strength and resolve of the American people. This still does not hinder the fact that we all need to be educated and the only way to change is from the bottom up. There is no way top down government can benefit the country in this light. It is the iron horse ingenuity of the American people that will solve our financial issues.

2. Gold and Silver – Gold has been money for over 5,000 years. Its redheaded step sister Silver has also been known as money. The ratio between the two has been historically 16-1. I have personally seen that spread in the last year go from 80 to 1 down to 30 to 1 and it is back up to about 40 to 1. What this means is that you can by 40 ounces of silver for 1 ounce of gold. Thus silver is $35 per once and Gold is $1,500 per ounce. Now – reality check. Warren Buffett does not invest in Gold. If you have been following any of my book summaries then you know I am a Buffett fan so let’s look at this. Basically Buffett says that if he owned all the Gold in the world then he would have a 67 foot cube of gold (height, width, length for you beginning math majors). He could polish it and kiss it and sleep on top of it. Instead of the gold cube he could have half of the farm land in the U.S. plus 7 Exxon Mobiles plus a trillion dollars in cash. He would rather take the latter as I would. Basically Buffett is arguing that Gold has NO UTILITY. I agree with him. Silver on the hand is different. Buffett has owned silver in the past and still may own some. Silver does have utility because it is used in Cell phones, computers, smart devices and medical gadgets. This is why I love Silver as a means of savings.

3. Cash Flow vs. Capital Gains – We do not want to fall into the great fool theory and invest in Capital Gains. Well in true contradictory fashion, Silver is a capital gains investment. Anyway you need to look at all of you investments in a synergistic approach. This means that we want investments to spit off cash flow but we also want our savings to increase. Robert Kiyosaki states that savers are losers. Translated this means that if you hold onto dollars then you are losing because of inflation and currency debasement. Thus you can hold your savings in Silver.

Now let’s chat about holding “real money” as a wealth life preserver. Note: Get educated, I am not saying go out and invest in silver and gold today. I am saying get educated. I do personally invest in Silver and will continue to do so but it is a very volatile so you need to educate yourself. Also, I am not a financial planner and don’t give advice so please do your own homework. My goal is to simply help you with that homework.

1. Mountain of Debt – This book was written in 2007 BEFORE the subprime crash. Even then the U.S. was buried in a mountain of debt. Since then, the money supply has been TRIPLED by the Fed. Thus that Mountain just became Mount Everest. This happened in the last 3 years and that is why the dollar is at an all-time low in 2011.

2. Unfunded Liabilities – Social Security, Medicare, Medicaid……… These unfunded liabilities along with the mountain of debt just magnify the problem. When you give something to somebody and then try to take it away, all hell breaks loose. Take a look at GM. They had to go into bankruptcy, get a government bailout and renege on all their unfunded liabilities in order to survive. They are now doing pretty well but the little guy lost their pensions and medical care. Get educated my friends. Do not let other people manage your money… The same will happen to the U.S. with the unfunded liabilities. Start planning NOW.

3. Derivatives – We touched on this earlier but in a nutshell here is what happened in the subprime meltdown. Around 100 people sat in rooms and decided to sell MBS (Mortgage backed securities) to investors. The problem was they wrapped up crap and sprayed it with perfume and sold it as triple A rated instruments. The ratings agencies and the leadership of these companies should be prosecuted. What happened was that a 1-2% move in values could wipe out the companies because the Leverage was so deep. These guys were leveraging billions to make tens of millions. There are too many zeros for that to work in the long run. As we know now, it didn’t.

To summarize, what does all this mean? This book and others like it will help you take control of your own destiny. It is recommended that you should hold 10% of your assets outside the financial system. This means that there is no counter party risk. When you put all your money in the bank and there is a run on the bank and it fails, the bank is the counter party. Holding physical gold and silver as real money eliminates the counter party risk.

I hope you have found this short summary useful. The key to any new idea is to work it into your daily routine until it becomes habit. Habits form in as little as 21 days.

One thing you can take away from this book is GET EDUCATED. Please open your eyes and spend a few minutes per day educating yourself. You will be happy you did.

New Book Offers Practical Tips for Achieving Financial Security

In Your Money and You: How to Increase Your Chances of Achieving Financial Security, Deborah Ellis, a longtime Certified Financial Planner (CFP), offers readers a plethora of information about stocks, bonds, saving, investing, allocating your investments, and even individual advice for people in different industries. While the book is full of information, it’s also written in a highly accessible manner. Ellis shares her personal stories of how she began saving money as a child and young woman, how her aunt taught her how to invest and buy stocks, and how things have changed in the decades since she began saving. Her personal experiences then branch into her professional experiences with clients and with years of investing in the market.

I know investing can be scary and confusing, but that’s usually due to a lack of information or the fear that we won’t understand the information. As Ellis shows us, investing is really not that difficult. In fact, anyone who passed middle school math classes can figure it out. What is harder is to learn to save and to break some negative beliefs we may have about money so that we can quit solely working for money and learn to make it work for us. The book opens with a quote from Napoleon Hill, author of the classic book Think and Grow Rich, that states, “If you let it, you will be surprised at how money attracts money.” Nothing could be truer, and Ellis shows us how it can be true for all of us. She states, “I believe that today the stock market is a gateway to opportunity in America. I believe it is a way for almost anyone from any walk of life to build wealth and partake in the American Dream.” Your Money and You shows you just how to pass through that gate.

The book’s opening chapters teach us how to take on a leadership role with our money. Ellis helps us learn how to plan for retirement and what to expect. She walks us through the elements of a financial plan. Then she has us take a financial inventory of where we currently are so we know what we have to work with and what is required to reach our goals. She teaches us how to develop a saving and a spending plan, and finally, how to assemble a team to help us, a team that may include an accountant, a financial advisor, maybe a lawyer, etc. We do not hand over our financial affairs to these people, but rather, we learn to lead them so they can help us achieve our goals. Ellis warns us “if one of your team members has different priorities, a bias, or wants you to go in a direction you don’t agree with, you need to find another team member!” That’s just one example of how Ellis tells it like it is. Another example I love and know is very true is that “If you want to charge something you cannot pay off in full, you cannot afford it.”

Next, Your Money and You gets into all the meat of investing. Ellis walks us through the power of compounded interest and how investing over time can benefit us. She explains to us the differences between stocks, bonds, and mutual funds. She clarifies just exactly what the stock exchange and market indices are, and she teaches us how to understand how different companies and their stocks are rated.

Once Ellis makes sure we understand the market, she gets into the more personal aspects of investing. She helps us understand our risk tolerance for investing, how to diversify our assets, and all the various scenarios we might encounter from inheriting money to winning the lottery and, ultimately, how to go about retiring.

The book closes with some chapters for people in special situations, including those in the military, those in industries like film and television where you may go from feast to famine at different times, and those who are self-employed. A bonus section includes several articles on how to achieve financial security.

Your Money and You is the perfect book to get you started with saving and investing your money. Don’t put off reading it; it’s time to invest in yourself. As Ellis warns us, “money is not static. If you nurture it, it will grow. If you neglect it, you will end up with very little. It is up to you.” Furthermore, Ellis tells us “Investing is not difficult. Developing an investing mindset might take a little more effort.” Your Money and You can help you develop that mindset, and once you do, your money will begin to work for you so that, ultimately, you will not have to work.