Today I’m reviewing the book Smart and Simple Financial Strategies for Busy People by Jane Bryant Quinn. It’s the #1 book on my Recommended Reading List in the Basics category. See my other book reviews.
Beginners are often overwhelmed by the seeming complex subject of personal finance. The financial service industry, the media, and the government don’t make this easier either. People also often fear of taking the wrong steps. Guess what, they are right. The personal finance area are full of traps. There are more bad products than good ones. This book, by Newsweek columnist Jane Bryant Quinn, helps people wade through the jungle with strategies that are both smart and simple.
Jane Bryant Quinn (Wikipedia bio) is a long time financial writer. She’s in her late 60s now. She put her years of experience and research into a short book packed with information anybody needs, without fluff and confusion. This book covers more areas in personal finance than a typical investment book, including topics on saving money, paying off debt, insurance, buying a home, paying for college and investing. I gave this book to my sister when she started her first job. I think it’s a perfect gift to anyone starting out in the personal finance world.
The book hugs around the premise “simple does it.” Here’s a quote from the introduction:
“In the money world, “simple” turns out to be sophisticated.
“A few brilliant people (and companies) were creating — and are still creating — a handful of financial products and strategies that really work. Even better, they’re honest, straightforward, and fairly priced. … … You don’t even have to mind them every minute because they mind themselves.”
This is very true. The financial service industry pushes for complex products that cost a lot, for maximizing their profits. The consumers actually need low cost, simple products that really work. Ms. Quinn did the research for you. She points out those products and strategies that really work. She said she uses them herself and those are all she uses. I can vouch for them because I use them too: 401k, Vanguard IRA, term life insurance, high deductible auto and home insurance, fixed rate mortgage, and Vanguard mutual funds.
Because of the size of the book (242 pages), it doesn’t go into too much details. But it is detailed enough to get anybody started. It is also full of web site addresses and phone numbers for further reading. Once you know what to get, you can read more about it. Jane Bryant Quinn also has a larger 1,000-page book Making the Most of Your Money, which is more like a reference book. That book hasn’t been updated since 1998 but the principles covered in the book are still valid today. A used copy can be bought for under $10 shipped, which I think is a bargain.
If you are already very familiar with personal finance subjects, you may not find a lot of new tips. That’s not the author’s fault. What works is what always did. I really like Jane Bryant Quinn’s 3 rules (p. 10):
- Only a few things work, and they work really well.
- If you set up a system that runs automatically, you can’t fail.
- Success comes from starting straight, then keeping your itchy fingers off.
If you started on the right track, congratulations, but remember to keep your itchy fingers off!
There is one factual mistake which I hope will get corrected in a 2nd printing. She stated contributions to a 401k/403b plan are exempt from Social Security tax (p. 27), which is not true.
Rating: ***** (Excellent). Highly recommended.
Instant diversification in a low-cost ETF portfolio. Convenient and disciplined with automatic rebalancing. Minimize your taxes. Betterment.com.