This book illustrates how FOUR principles inspired by basic arithmetic can be applied to manage the most important financial decisions (money milestones) people face over their entire financial lifecycle.
They are Identify the true value all of your financial resources (ADDITION). Budget for the hidden liabilities in your future (SUBTRACTION). Spend your total resources evenly over time (DIVISION). Prepare for many alternative and unexpected universes (MULTIPLICATION).
This book offers a complete framework for thinking about money that’s every bit as provocative as Freakonomics. Drawing on the newest research into psychology and personal finance, Milevsky helps you identify the true value all of your resources; budget for hidden liabilities in your future; plan to spend your total resources smoothly over time; and prepare for unexpected events that could upend even the most careful planning. You’ll discover why: children are short-term investment liabilities but may be long-term pension assets; winning the lottery may increase your chances of going bankrupt; and giving up control of your retirement nest egg might actually make you happier. The insights are fascinating and useful throughout your life whether you’re deciding what to study; contemplating your first home purchase; deciding whether to keep contributing to your 401(k); or considering when and whether to retire.
Table of Contents
About the Author xvii
Prologue: Financial Deicide xix
Introduction: Human Capital: Your Greatest Asset 1
Chapter 1: Is the Long-Term Value of an Education Worth the Short-Term Cost? 13
Chapter 2: What Is the Point of Saving Money Forever? 35
Chapter 3: How Much Debt Is Too Much and How Much Is Too Little? 53
Chapter 4: Are Kids Investments and Can Marriages Diversify? 69
Chapter 5: Government Tax Authorities: Partners, Adversaries, or Bazaar Merchants? 85
Chapter 6: Can You Eat Your House or Will It Ever Pay Dividends? 101
Chapter 7: Insurance Salesmen and Warranty Peddlers: Are They Smooth Enough? 113
Chapter 8: Portfolio Construction: What Asset Class Do You Belong To? 129
Chapter 9: Retirement: When Is It Time to Shutter the Well and Close the Mine? 147
Conclusion: Four Principles to Guide All Financial Decisions and Money Milestones 169
With CourseSmart eTextbooks and eResources, you save up to 60% off the price of new print textbooks, and can switch between studying online or offline to suit your needs.
Once you have purchased your eTextbooks and added them to your CourseSmart bookshelf, you can access them anytime, anywhere.
$9.99 | ISBN-13: 978-0-13-281961-9