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how to be richer, smarter, and better looking than your parents by Zac Bisonette, is a ridiculously cheesy title, for a very informative book. a friend had lent it to me, as a perfect read for my new “financial lifestyle”. i’ve always been quite thrifty, but after moving from the burbs to the city, it was time to reassess my finances. after analyzing my expenses, i took some steps to ensure i was saving as much as possible, and set some financial goals….i know that’s so adult of me.

steps to saving

  •  high yield savings account – thanks to a suggestion of a friend i sought out a savings account with a competitive rate, and opened a high yield savings account.
  •  weekly budget – i put myself on a realistic weekly budget to ensure i’m not over spending, and i’m able to save. with the weekly budget i figured out ways to stretch out my money in simple ways such as bringing lunch to work, and cooking at home more.  the budget also helps me save because i can put purchases in perspective by comparing each purchase to the amount of my weekly budget.

financial goals

  • get rid of student loan debt – i plan on paying off two student loans this year that have decreased to a manageable amount. one will be paid off with my tax return. 
  • get the most out of company 401k –  once i reduce my student loan debt i plan to contribute up to the amount that my company matches.

here are some highlights from the book….

why you should invest like a woman

“If you want to get rich invest like a girl. Seriously.”

According to a 2011 study conducted by Barclays Wealth and Ledbury Research, women performed better in the market than men.

According to a 2009 study, women earn about 1 percent more per year on their investments than men.

The reason the author gives for women being better investors is they, “aren’t testosterone fueled egomaniacs who think they’re brilliant and better than everyone. Men try to be brilliant and creative; women, on average just buy their mutual funds and sit tight. That’s the approach that wins.”

why thrift will make you happier

“In addition to materialism, another leading cause of financial difficulties is inattentiveness; not paying attention to financial decisions, floating around through life overspending out of sheer laziness. In short, not being thrifty.”

“Unfortunately thrift gets a bad rap these days”….The author explains, “the earliest meaning of the word thrift was ‘the condition of one who thrives’, or being endowed with good luck, good fortune, wealth, and health.”

The meaning was also once associated with “prudent housewives who were neat, clean, industrious, imaginative, clever, enterprising, and generous.” He also insists to reflect on those words, “Think about those adjectives. Those are the key words for a good financial life, neat clean, industrious, imaginative, clever, enterprising, and generous.”

how to become wealthy

“It’s a cliché: ‘It’s not how much you make, it’s how much you keep.’ But it’s true!”

The author shares a convincing study by two economists that found income differences account for only about 5 percent of the differences in household wealth.

“They way people accumulate wealth is that they decide to save a significant amount of their income. Most people of all income brackets don’t do this, and that’s why most people never accumulate any significant assets.

What matters in wealth building is the decision to live a life that allows you to save a significant portion of your income. There’s no secret, there’s no trick.”

why investing is the best tax shelter in the World

“the higher percentage of your wealth that comes from investments (as opposed to working) the less you’ll pay in taxes.”

The author recommends investing with vanguard  or fidelity in Roth IRA and individual 401k, and always taking advantage of company 401K, and contributing up to the company match.

why you should avoid high mutual fund fees

“There is no evidence – and in fact there is an overwhelming amount of evidence to the contrary- that investors can beat the long-term returns of the stock market through superior stock selection or by timing the market. Famous studies have shown that randomly selected portfolios of stocks perform just as well as the highest-paid mutual fund managers and stock will outperform the averages. “

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