Smart Couples Finish Rich – Ch. 3 Review

by Mike Holman

This post is part of my review of Smart Couples Finish Rich by David Bach. I had planned to go through the whole book and talk about the main points of each chapter in a separate in depth post – however I’ve pretty much lost interest in that idea so I’m going to review chapter 3 today, since the post was already written and I will review the remainder of the book in a separate post.

The first part of this chapter is about organizing your finances – first go through all your paperwork and figure out what you own and what your debts are. Then organize every other aspect of your life as well.

I would tend to agree with this advice although he advocates a pretty radical re-organization of your life to get everything organized perfectly. As most people who have tried to organize at least part of their life know, it’s not the organizing that is the hard part (if you are motivated) but rather the ability to keep things organized that is the hard part. Coming up with a good and logical system that doesn’t require too much work, is the key for keeping yourself organized. He also mentions that the less “stuff” you have, the easier it is to organize it and keep it organized so purge, purge purge! For more tales of organizing, check out Tim’s interesting posts on his own organizing challenge at the Canadian Dream. Post 1, post 2, post 3, last post.

The next bit of advice he has is to write down your goals – people who write down their goals are more likely to fulfill them.

I like to write short term “to do” lists but I don’t really have any “goals” written down although I do sort of have an investment policy which is not written in stone (or anywhere else for that matter). This seems like a good idea but personally I think if you want to achieve something, I don’t see how writing it down will make much of a difference. Maybe if you have a bad memory then writing it down might help? On the other hand I’ve been posting (writing down) about my weight loss goal and I’ve found that I’ve been pretty motivated. Now, whether that’s because I wrote it down, or I’m doing weekly public updates or because I’m just motivated is impossible to say.

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{ 6 comments… read them below or add one }

1 SavingDiva

I’m not ready to open finances up with anyone…However, my sister recently got engaged…and I’m thinking about getting this book for her. However, she might just throw it away…

2 Mr. Cheap

One “on line” version of the write goals down idea is http://www.43things.com/ which basically lets you make a list of 43 things you want to do in life, then write about them and whatnot. Somewhat fun (even just as an exercise to come up with 43 things you want to do in life).

3 FourPillars

I think it’s a great gift SD – you can always try!

Mike

4 nancy (aka money coach)

There may be a really great web 2.0 opportunity in here … the fact is, as you put succinctly – getting organized is one thing; staying organized, quite another.

Last Nov., a bunch of us bloggers committed to eating at home at lot more instead of going out and gave each other weekly updates. Maybe time for something similar in Jan?

I’d jump in – even though I’m a money coach, I still drop off the plan periodically when life gets too fast.

5 Gates VP

Hey FP;

Writing down goals is standard advice outside of the PF world, with a whole bunch of actual science to prove its effectiveness. Why it works is a lot harder to prove (and massively subjective), but from my experience, written goals just have more “weight”, they have a larger impact on our reality than simply verbalized goals.

Really, the dedicated goal achievers have written plans and tracking charts and all kinds of further tools. But they all involve higher accountability, higher “solidity” of reality.

For example, you used to have the subtitle of “retiring at 45” on your old blog. But “retirement” is really a nebulous concept. At best, for most people, it means “quit the daily 9-5 grind”. But heck, I do that for a few weeks every year when I take my vacation.

If you take the time to “define retirement”, you’re far more likely to achieve that goal. If you grab a Derek Foster or a Timothy Ferriss, they both figured out what they wanted to do every day (work or not) and ran with it.

Derek Foster is living off of dividend income. He decided that he wanted to spend his days with his kids (and writing books obviously). To everyone else he’s “retired at 34”, but it sounds to me like he’s just doing something “different” with his life, right?

Either way, defining words, concepts, goals is important. Writing them down is the 101 of definition.

BTW, as a side note, does this book register as inane for people other than me? I mean “organize your finances”, “write down your goals”, isn’t this like the early chapters from pretty much any book on organizing your personal finances? Sounds like a “library borrow” to me.

6 FourPillars

Hi Gates – yes, a lot of the actual advice in the book is pretty mainstream stuff so for people like you and me – it’s definitely a “library borrow”, however I would categorize it as a worthwhile book for someone who maybe hasn’t read many personal finance books and wants to start looking after their own money. If nothing else he is somewhat motivational in his writing…

Mike

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