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.
Summary
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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