I have money on my mind, so this post has nothing to do with health or fitness. But as I am the CEO of this blog I voted in the annual meeting minutes that I could write about other subjects from time to time.
The book that had the biggest impact on my financial philosophy was called Die Broke. Written in 1997 by Stephen Pollan, it threw conventional wisdom out the window. His tenets were: “Quit today, pay in cash, don’t retire and die broke,” which I will explain, briefly.
- Quit Today: Our grandparents used to go to work and they called it their job. They did their job well but when the five o’ clock bell rang they went home and spent time with their families and friends. Today people call their jobs “careers”. They work 60-80 hour weeks without additional pay because they try to find fulfillment via their work and want to demonstrate loyalty to their employer. You can get fulfillment through other sources; instead use a job to make money. Be like the professional athlete. Do your job well and work for the highest bidder. Do you really think some giant corporation cares about you? Will be loyal to you? Of course not! So why be loyal to them? Mentally quit and look for a higher salary. When you mentally quit your job it becomes easier to say, “Sorry, I can’t come in this Sunday,” when they want you to work unpaid overtime to meet that big deadline. It helps you to prioritize your family over your job.
- Pay in Cash: People get over extended on credit cards for silly things like vacations and gasoline. Why are you paying the minimum balance with 13% interest on a vacation you took two years ago? De-leverage and don’t get beholden to the banks.
- Don’t Retire: Social Security was established to kick in right around the time people’s life expectancy ran out. Somewhere along the way people began to live longer but the retirement age never changed. Do you really want to be dependent on the government to take care of you? Doesn’t it make more sense to do some financial planning and take care of yourself? Also, do you really want to play golf all day? Sure, it might be fun for a few months, but isn’t it better mentally, physically and financially to stay active?
- Die Broke: Give while you’re alive. Why have your adult kids wait for you to die to get their inheritance? Isn’t more fun to help them out with a down payment on their first home or help pay for a wedding or help a grandchild go to college when you’re alive and can hear them thank you? You should plan so you can give to whom you want, when you want and still have enough to live on until you die. And when you die you should have enough to pay for the coffin and that’s it. Die Broke!
I have followed the first two principles since I read the book back when I was a starving actress living in New York. When I strayed away from them my financial life seemed to spin away from me. The last two principles seem like good guidelines. If I can make a living writing I’d love to write forever. And I agree that it’s more fun to watch your money being used to good purpose versus sitting in a stodgy old bank vault.
What do you think? Do you have financial principles that you follow? Or books that have influenced you?
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