Stars: ★★★★★ (Study This Book)
I cannot recommend this book more highly. Finances have always been a dragon whose cave I would prefer to avoid, and this book is a confidence-building step toward slaying the dragon.
Premise
This is a book of parables set in the time of the Babylonian Empire. It follows the lives of several men who started in the lowest positions of the time, often as slaves. It walks through a variety of practical steps to pay off debts, save money, and still live a full life.
This is not a book I would have picked up to read without a recommendation from a trusted friend. The title is a little off-putting to me, and the fact that it was first published in 1926 made it seem immediately irrelevant to my current situation. I was pleasantly surprised at how applicable these lessons were even though they were written almost 100 years ago.
Loved
- The Inclusion of a Full Life
After reading the first few lessons of the book, it seemed like the goal of the book was simply to save lots of money, which has never been my goal in life. Having spent plenty of time in economics classes, I know that research has demonstrated repeatedly that an increase in money leads to an increase in happiness to the point that all the person’s needs are met. There is then a plateau, at which point increasing amounts of money have inverse relationships to levels of happiness. Based on this information, my goal has always been to have enough money to meet the needs of me and my family and no more. I am not trying to build masses of wealth in this life.
Therefore, I was pleasantly surprised when I got to the rules about spending money on living life. As important as it is to save for emergencies, it is also important to love the life you have now. That can include Starbucks and celebratory dinners out. It should include fun and time in nature. The book includes these important facets.
- Acknowledgement that Debt is a Burden
A recurring theme throughout the book was burden of incurring debt. Taking on student loans to pay for my master’s degree has been the albatross of our finances since before we got married. For many years, we used credit cards to live on, and we were drowning in that debt. Mostly by the grace of God and much less by making good financial choices, our house and my student loans are the only debts we have left. But the book addresses not only the burden of debt but also direct suggestions as to how to get out of debt. It requires self discipline and consistency, but the principles are sound.
- Practical Applications
I hate reading books about theory, and I loved this book because it skipped all of that. The very first chapter introduces the reader to the characters and dives immediately into the “Laws of Gold.” The author walks through the percentages that should go into savings, the percentages that should go to paying of debts, and the percentages that should go toward living life. He explains how each of these work through examples for the short term and the long term. It is unnecessary to sort through financial jargon or philosophical statements. The reader immediately understands the instructions and can apply it to her own finances.
Didn’t Love
There is an implication that it is easy to get one’s finances in order. The final parables intimated that hard work is a part of financial stability, but it seems to bear repeating more than the one time. Even though the principles are simple on their face, that does not make them easy to implement. These are long term strategies that demand focus and consistency.
Lessons Learned
- Owning a house is probably a good decision. I never wanted to buy a house, and even now that we own one, it can cause me anxiety sometimes. I appreciate the flexibility that comes with renting and the fact that I am not responsible for any of the things that break or go wrong. I have told Afa many times that if he dies unexpectedly, I’m going to sell the house almost immediately. This book and Money is the Answer for Everything have changed my perspective on home owning. I am incredibly grateful that we were able to purchase our house at precisely the right time and that it is an investment. But the responsibility is still a little overwhelming to me.
- Saving can be accomplished in a variety of ways. The book discusses savings for emergencies, investments for the future, and savings for retirement. This was an important lesson for me because I generally think of savings as simply a savings account. It was helpful to consider the additional ways that we could utilize savings.