Overview: Smart Couples Finish Rich by David Bach Part III

As we move forward with our final portion of the overview of David Bach’s Smart Couples Finish book you can catch up on the previous to two posts here and here. Let’s continue on with steps 7-9.

Step 7: Build Your Dream Basket

This step is about saving for your dreams, not about earning more money, or setting goals or getting more organized. Here you will identify what your dreams really are. Do you want to have a vacation home? Take a trip of a lifetime? How will you afford to accomplish your dreams? A systematic investment approach is the best plan.

 

Overview: Smart Couples Finish Rich by David Bach Part II

Let’s continue our discussion of the information found in David Bach’s second book, Smart Couples Finish Rich. In a previous post we went through the first three steps of Bach’s nine steps to creating a rich future for you and your partner. The first three covered evaluating your current financial situation, what your top 5 core values are and how these affected your financial goals, and established some basic financial truths.

Step 4: The Couple’s Latte Factor

This next step addresses a fundamental problem affecting every American household, the problem is not the income, it’s what you spend. Here we can “learn how anyone can become wealth on practically any income.”

 

Overview: Smart Couples Finish Rich by David Bach

I recently finished reading another personal finance book, Smart Couples Finish Rich 9 Steps to Creating a Rich Future for You and Your Partner, by David Bach. I felt this to be a very well-rounded finance book that focused on the relationships in your life and how this influences your views and use of money. I appreciate that he didn’t just tell you generic steps to get rich but addresses core values and motivations. By identifying your goals, you have a power in gaining control of your finances. Typically my book overviews are just that, a cliff notes version of the book. For more of a review and recommendation whether to buy or not see this post at the Simple Dollar. I’ll be breaking now my overview into three parts, addressing 3 of the steps in each post. So let’s get started and dig in.

 

More Advice from Dave Ramsey’s “Total Money Makeover” Book

• A good rule of thumb on selling items (except the home) to pay down debt is this: If you can’t be debt-free on it in 18 to 20 months, sell it.
• It’s not recommended to sell your home unless you have payments above 45% of your monthly take-home pay.
• Generally speaking, if your second mortgage is more than 50% of your gross annual income, you should not put it in the Debt Snowball. Pay it off with your first mortgage after you’re able to save for retirement.
• You are secure and will leave a nice inheritance when you can live off 8% of your nest egg per year. If you earn 12% interest on your money and only pull out 8%, you grow your nest egg each year by that extra 4% to keep up with inflation. To live on $40,000 you’d only need a nest egg of $500,000.

 

Overview: Dave Ramsey’s “Total Money Makeover”

I’ve seen the billboards, tuned in to the radio show and have slowly started to give Dave Ramsey a second chance. My friends that are on the ‘Dave Ramsey program’ all love it, and swear by it. So I borrowed a book from a friend, and just finished reading it cover to cover (a feat in itself for someone like me). The book was what I expected, nothing too terribly new or revolutionary (one of the reasons I decided to borrow it instead of purchase it). His mantra, ‘if you will live like no one else, later you can live like no one else’ is enumerated throughout the pages. Essentially, you need to 1) live on less than you make and 2) only buy things when you can afford them, which means paying cash for the entire amount.