What would you want from a book on wealth accumulation?

[Matt]

I'll expand on this notion. I'm a big fan of checklists and flowcharts.

The software should have access to all your accounts. It should ask questions, about current assets, about goals, your personality, about where you live, what you do for work, how many kids you have, etc, etc.

As it gets answers it starts handing out tasks designed to optimize financial outcomes. Each task has a checklist. For instance, if the task is to set up an automated investment of X dollars/month in a total domestic stock market index product, the checklist would specify:

1. Net assets are over 500 million dollars.
2. Fees are no more than 0.2% per year.
3. Product is an ETF or a mutual fund.
4. Product tracks the Wilshire 5000 Index, MSCI Broad US Market Index or Russell 3000 Index.
5. Which brokers you can use.

Then it would give a list of brokers, ETFs and mutual funds that meet the criteria.

I do see them as connected topics, but this I see more as an asset allocation tool. I'm striving for an 'energy allocation tool' in this book. I do see it as an interactive site too. The model you describe is something very close to something I am already building. However I see this tool as a piece of the overall puzzle, not the puzzle itself..

 

[ElainePDX]

Just tossing in a suggestion - I have a sense that, regardless of whether we have had a charmed life, a difficult one or something in between, I do not think that Forum folks are necessarily typical of the readers Matt hopes to attract, that is, the ones with similar questions but who are not here and don't frequent forums/social gatherings like this. Which is not to say that people here can't provide extremely useful feedback as Matt hones his book strategy, but perhaps it would be helpful to get some feedback from non-travel hackers/cash-backers!

Having written and published a book in an earlier life that was enough of a regional best seller to have made it to Costco, I reiterate an earlier point - how are you going to get your target audience to buy your book? Are you doing it to make money, or to give back? Writing the book is just the first part - distributing it and getting it into the hands and before the eyeballs of your potential readers is just as important.

 

[Matt]

Just tossing in a suggestion - I have a sense that, regardless of whether we have had a charmed life, a difficult one or something in between, I do not think that Forum folks are necessarily typical of the readers Matt hopes to attract, that is, the ones with similar questions but who are not here and don't frequent forums/social gatherings like this. Which is not to say that people here can't provide extremely useful feedback as Matt hones his book strategy, but perhaps it would be helpful to get some feedback from non-travel hackers/cash-backers!

Having written and published a book in an earlier life that was enough of a regional best seller to have made it to Costco, I reiterate an earlier point - how are you going to get your target audience to buy your book? Are you doing it to make money, or to give back? Writing the book is just the first part - distributing it and getting it into the hands and before the eyeballs of your potential readers is just as important.

Thats cool - congrats on the book! Regarding your point about demographic, I'm not sure. Frankly I think from the way many people act on the forum they really don't understand some of the concepts I want to explain... which include using time better. So the problem I face somewhat in responses isn't that the audience isn't right, but that people want to answer:

"Here's what I do well, include it."

And what I am looking for is more along the lines of:

"Here's what I don't understand"

I guess the challenge with knowledge is you often don't know what you don't know..

As for disti and whatnot its a lot easier to create print or epublish these days so I am less worried about that. In terms of money, yeah, I'll be putting a price on the book, though what I do with the millions of dollars it generates I have not yet decided.

 

[henrygeorge]

The importance of learning to love to cook. Eating is a cultural act. It has profound impact on more than just your wallet and body, though those are why it pertains to the book and wealth. I save a ton of money, and eat like a king as the designated chef of the household. Once you know how to do it efficiently, it's relaxing and also feeds that urge to maximize efficiency of everything in life. I cook enough for two dinner portions and two lunch portions for the next day, and eat out less than once a week. As you mature, you start to catalog prices at the grocery store, learning appropriate value by heart. Obviously not buying packaged or premade foods

 

[Matt]

The importance of learning to love to cook. Eating is a cultural act. It has profound impact on more than just your wallet and body, though those are why it pertains to the book and wealth. I save a ton of money, and eat like a king as the designated chef of the household. Once you know how to do it efficiently, it's relaxing and also feeds that urge to maximize efficiency of everything in life. I cook enough for two dinner portions and two lunch portions for the next day, and eat out less than once a week. As you mature, you start to catalog prices at the grocery store, learning appropriate value by heart. Obviously not buying packaged or premade foods

As a former chef I agree. Here's the idea of 'outsourcing' again. At some point you need to cook and make food for the week. And at another, you probably shouldn't anymore. There's always going to be something special about cooking for someone else, but there will be times when doing so for yourself isn't effective.

And the important flip of the outsourcing is what you describe, the people who buy expensive meals when they could be saving that money.

 

[Haley]

At what point would you stop cooking for yourself and outsource?
How would you outsource food prep?

More on how you are thinking about it might help people understand what you are aiming at. Although I guess you could end up w/a debate. Some of effective vs ineffective time use is going to be fairly personal. so really I'm wondering if there is a general principle you are thinking of.

 

[Matt]

At what point would you stop cooking for yourself and outsource?
How would you outsource food prep?

More on how you are thinking about it might help people understand what you are aiming at. Although I guess you could end up w/a debate. Some of effective vs ineffective time use is going to be fairly personal. so really I'm wondering if there is a general principle you are thinking of.

I'm still struggling with exact numbers for things like these specifics and need to drill down more. Conceptually speaking I see this akin to the overall notion of FIRE. By which I mean that when you are in FIRE you no longer need to work and are beholden to a job, but you still might want to. Same for cooking. There should come a time when you no longer need to make sandwiches and bring them to work with you to save a few bucks.

Again this ties to the alternative. Just like if you were to not be in a FIRE position and you quit your job that would be very problematic, should you elect to 'outsource' all your food too soon, you will harm wealth generation.

I see this as phases where at one point it will be absolutely not a smart idea to eat at restaurants every day, and at another it will be... perhaps requiring a tapering/transitioning phase... eg lunch is OK but still cook dinner etc..

 

[henrygeorge]

You want to bring people up to speed on looking at life thru the eyes of efficiency, and that can be a theme. Just don't make each chapter focus on it, it will come naturally. Teaching people to save by not spending on eating out won't happen just because you tell them to; behavioral change just isn't that easy. You need to sell them on why cooking for yourself can be rewarding in ways other than money. You need to enchant them with the idea that eating is cultural act. Point them towards Michael Pollan who does a great job in Omnivore's Dilemma and In Defense of Food. He captivated me with a passionate eloquence that spurned me to cook and subsequently save.

I disagree that you need to describe a point where outsourcing food is efficient. It's a distraction that the target audience will be pulled away from the importance of learning to cook because they can shortcut to a level of wealth where they don't have to cook. With precise language unequivocally argue that they must learn to cook now.

 

[Haley]

So I'm guessing you're approach to when to outsource isn't just based on income. 15% of net to food is a common budget recommendation, at some income level you can stay in that zone and eat out everyday. I'm not sure how else you would look at it.

I can imagine cases where you would be better off putting your resources elsewhere even if your current income doesn't, strictly speaking, support it. Building a new business or high stakes career points, for example, or certian life events.

 

[ElainePDX]

I don't think anyone could teach me to love to cook. I cook for many reasons, but loving it is not one. I think you can teach someone why learning to cook is smart, and you can teach them to cook; heck, you can probably even teach them to teach cooking - but teaching someone to love something you love does not always work.

Time. Effort. Money.

There are nights when I don't want to cook, but going out to dinner just seems to take too much effort or time. So we eat in. On other nights I rather go out. But in all cases, I do know the tradeoff in time, money and effort and I make a calculation.

Someone who prioritizes wealth accumulation needs to know the tradeoffs in time, money and effort. Which I think is one of the things that Matt is getting at.

 

[Paul]

I've been planning to write a book for some time now. My goals for this are starting to crystallize into a roadmap - going from poverty to wealthy in an efficient manner. I'm still trying to figure out how to plug people into that pipeline since everyone will be on a different part of that scale, but I think it is doable with some online tools.

Topic wise, what subjects do you think need to be discussed? I want to get a person with zero financial literacy to not make the mistakes that put them in debt, and to know when and where to invest, when to rent, buy, and so on..

If you could help me brainstorm with things like "all high school kids should be taught X" or "what I wish I had known about student loans" etc... that would be awesome.

Define "wealthy". My idea of wealth is a lot different now (at age 50) than it was when I was a broke college student who thought being a millionaire was "wealthy".

What is poverty? I know guys with millions who have a poverty of ideas (full of right wing meanness and bible thumping hypocrisy) who are some of the sorriest and most stupid humans I've ever met. And then I've met sharpest guys who'd give you their last dime, who live in actual fiscal poverty (often only because they were unlucky to be born with tinted skin in a distant country) and where reading a book on finance/wealth would have zero ability to change their financial circumstance.

But a big pet peeve that almost never gets discussed properly (yet is key to one's success) is the notion that simply getting an "education" is a recipe for success. The only problem is that the vast majority of all college degrees are worse than worthless as they teach you nothing the world values (by way of a living wage) but do get you massively in debt (or rob you of precious capital that should have been put to use in worthwhile endeavors).

Reality is you need to get educated in law, science, medicine or engineering to have a good chance at success. Yes, of course there are a lucky few who buck the trend, but go ask the millions of "college educated" bank tellers, baristas, bar tenders, hair dressers, telephone sanitizers (HHGTG reference), waiters, middle managers in dead end jobs what their degrees are in - and the vast majority are liberal arts nonsense - and then ask how big their student loans are - and if they ever think they'll earn enough to pay them off before they "retire".

My book on how to achieve wealth would be a page long:
1) Get an education that offers you a career - or be the one-in-a-million who are so damn talented or lucky in some other pursuit to "make it"; 2) Work your ass off - that means 80+ hr weeks for 20 years without whining about it; 3) Live within your means and save until it hurts - forget the boat, the fancy vacations (unless you MS it!), the motorcycles, the new cars - let the schmucks buy them; 4) Take reasonable risks - investing in bonds and sector funds aren't going to make you wealthy; 5) Learn to understand money - nobody else should care about your money the way you should - to everyone else, it's something of yours to take or tax so they can afford their second homes in the Hamptons; 6) Don't have children you can't afford (and/or can't spend time with).

Do those few, relatively simple, things and you'll be setup to have as good a chance as possible to be happy, healthy, wealthy and fulfilled.

The End.

 

[R.R.]

Define "wealthy".

+1. Important question, and highly individualized.

I know guys with millions who have a poverty of ideas (full of right wing meanness and bible thumping hypocrisy) who are some of the sorriest and most stupid humans I've ever met.

I myself earned degrees in theater, and now am happy to work in academia, as well as freelancing outside it. Do I earn what people in law, medicine, science, and engineering do? No, but I choose to save 40% of my gross income, and am on track to retire (from wage-earning work) early. I'd rather be me than people I've met who fit Paul's description above.

go ask the millions of "college educated" bank tellers, baristas, bar tenders, hair dressers, telephone sanitizers (HHGTG reference), waiters, middle managers in dead end jobs what their degrees are in - and the vast majority are liberal arts nonsense

I know many people who also earned degrees in theatre or another artistic practice, and they practice their art forms on a consistent basis -- while also earning money reasonably contentedly in a perfectly-respectable service industry job. Will they become wealthy? If they live below their means, and save consistently, they will avoid poverty, and will also continue loving their lives -- all of which is a fantastic alternative to hating one's job or otherwise being a miserable creature. Wealth seems to take many forms.

 

[Alex1432]

As an engineer the world would be a terrible place if we did not have liberal arts degrees. I think liberal arts gets a bad rap because everyone who isn't sure what they want to do selects that major then graduate and don't have 60k tech job lined up. Perhaps it just takes some people longer to find what they like or are good at and if they work at Starbucks for awhile then so be it maybe they week learn process management or inventory control and get a job elsewhere.

 

[Matt]

Paul raises some great points. I guess my answer to what makes someone wealthy isn't fixed yet. As I mull it over I think that the number cannot be a fixed amount.. people often say $1M is great.. but I don't think it is fair to say $10M is the right number either... I think there must be some interplay between the annual expense amount and some other fixed variable.

Some people like the 25x expense number, but that is just a play on the 4% rule and flawed. I see one blogger out there who I watch like a train wreck that has dropped his expenses down to almost nothing but seems to be living at home and happy to save 40% more than he spends because he is living like a pauper... just one big fixed hit will wipe him out and he will be too old to do anything about it. Of course that hit can be offset with proper insurance planning.

I also agree about the importance of liberal arts, and that it is less likely to bring in big bucks - but that is why a relative number may be more appropriate. We should also note that there are a lot of 'other things' that can make someone from this world quite secure financially, such as tenured positions and those that come with accommodation, and other fringe benefits on the entertainment and social side of things from being a part of the community. People may earn a fraction of a bankers wage, but live a good life with plenty of disposable income.