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How to Ruin Your Financial Life
A Money Book Summary

How to Ruin Your Financial Life, by Ben Stein, 131 pp. (Also on audio CD)

Ben Stein is a smart fellow with wonderfully varied life experience. He studied economics at Columbia University, finance and law at Yale (where he graduated valedictorian of his class.) Then he picked up wide experience in real life, serving as economist, trial lawyer, presidential speechwriter, teacher of law and economics, columnist for The Wall Street Journal, writer on finance for Barron's, frequent witness at Congressional hearings about finance, and writer of 16 books. He's also played roles in several movies and had his own game show - Win Ben Stein's Money


Stein says that he's always been a "manic observer and classifier of how success and failure come to pass. I'm bound to say that I've learned more from the failures than from the successes, and I think you will as well." (p. xvii) Thus, Stein decided to write not yet another book on how to make money, but how to lose it. Here you'll find the mistakes he's seen lead others to ruin. Many are mistakes he admits to making himself.  

An interesting tidbit from his background:

"...when I was a child, we lived in a neighborhood with people who had fancier cars than we did, played at elegant country clubs, and thought nothing of laying down a handful of bills on a horse. They all wound up broke. I try to not do anything in the way that they did." (p. xvii)

He covers 55 topics in 128 pages of large, readable type. You could read it easily in one sitting, but avoid the temptation. Take one topic that strikes you and mull it over for a day or two. At about 2 pages per topic, it could serve as a family devotion of sorts. 

Sample Chapter Titles

Written tongue-in-cheek, each chapter tells a way to fail with money.  Chapters include:

  • Collect As Many Credit Cards As You Can and Use Them Frequently

  • Lend Money to Your Friends - Especially Your Girlfriend or Boyfriend

  • Compete With Your Friends to See Who Can Spend the Most

  • Invest in Penny Stocks

  • Truly Believe That You're Only As Valuable As What You Own

  • Make a Point of Watching Those Late-Night Financial Success Infomercials

  • Find a Man or Woman with Really Expensive Tastes and Reckless Financial Habits - and Marry Him or Her!

Favorite Quotes (Remember: This is how to LOSE money!)

"Don't pay any attention to the fact that it took the stock market 25 years after 1929 to reach its 1929 level again; or that adjusted for inflation, it took the market more than 50 years to reach its 1929 level again - or that the NASDAQ had the worst stock-market plunge in postwar history just a few years ago. The people who tell you these things are just party-pooping spoil sports." (p. 59)

"Clearly, as you can see in movies and TV programs about the stock market, real money is made by trading frequently." (p. 70)

"Start a business with inadequate capital - in a difficult field and in a difficult location - and expect to prosper." (p. 92)

Closing Advice on How to Do It Right

Presidential advisor Bernard Baruch was once asked for his advice for Americans. He replied simply: "Work and save." (p. 128)

Stein expands to eight bits of wisdom (pp. 125-128):  

1. "Save as much as you can on a regular basis."

2. "Invest conservatively...." He recommends "very broad stock-market indexes, variable annuities, and short-term broad-based mutual funds, Treasury or high-grade corporate bonds."

3. "Buy your own home...." (He repeats this phrase five times for emphasis!)

4. "Avoid doing business with people unless they have a good reputation for probity and integrity...."

5. "Remember that spending is not a substitute for saving."

6. "Remind yourself continually that life goes by with stunning, breathtaking speed, and you will want to prepare for the day when you no longer have the strength to work...."

7. "Leave fancy gimmicks to stupid people."

8. "Know that there are no free lunches anywhere once your parents die...."  You are responsible to provide for yourself and your family.  

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