Get Rich Slowly Book Review

...just read the book review of "Debt is Slavery" from the blog Get Rich Slowly and I must say it was a great review because he summarized all the key points and explained each very well. I'm going to list each point but honestly, to appreciate the post, please read it: http://www.getrichslowly.org/blog/2007/08/07/book-review-debt-is-slavery/

Get the book here:


Here are the points:

1. Debt is slavery.
2. Money is time. (see the book Your Money or Your Life)

3. Possessions are a prison.
4. Don’t let advertising brainwash you.
5. Money buys freedom.
6. Don’t sell your soul for a salary.
7. Own.
8. Spend less than you earn.
9. Save 50% of your salary.
10. Control your money.
11. Start doing this now!

How to Protect Your Precious Credit & Identifty

I received this in an email and most of it makes sense but take it with a grain of salt. Research a little before you decide to do anything. Here is the email:

Read this and make a copy for your files in case you need to refer to it someday. Maybe we should all take some of his advice! A corporate attorney sent the following out to the employees in his company.

1. Do not sign the back of your credit cards. Instead, put "PHOTO ID REQUIRED."

2. When you are writing checks to pay on your credit card Accounts, DO NOT put the complete account number on the "For" line. Instead, just put the last four numbers. The credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check processing channels won't have access to it.

3. Put your work phone # on your checks instead of your home Phone. If you have a P.O. Box for a mailing address, use that instead of your home address. If you do not have a P.O. Box, use your work address. Never have your SS# printed on your checks. (DUH!) You can add it if it is necessary but if you have It printed, anyone can get it.

4. Place the contents of your wallet on a photocopy machine. Copy both sides of each license, credit card, etc. You will know what you had in your wallet and all of the account numbers and phone numbers to call and cancel. Keep the photocopy in a safe place. I also carry a Photocopy of my passport when I travel either here or abroad. We've all heard horror stories about fraud that's committed on us in stealing a name, address, social security number, credit cards etc.

Unfortunately, I, an attorney, have firsthand knowledge because my Wallet was stolen last month. Within a week, the thieve(S) ordered an Expensive monthly cell phone package, applied for a VISA credit card, had A credit line approved to buy a Gateway computer, received a PIN number From DMV to change my driving record information online, and more. But here's some critical information to limit the damage in case this happens to you or someone you know:

5. We have been told we should cancel our credit cards immediately. But the key is having the toll free numbers and your card Numbers handy so you know whom to call. Keep those where you can find them.

6. File a police report immediately in the jurisdiction where your credit cards, etc., were stolen. This proves to credit providers you were diligent, and this is a first step toward an investigation (if there ever is one).

But here's what is perhaps most important of all: (I never even thought to do this.)

7. Call the 3 national credit reporting organizations immediately to place a fraud alert on your name and also call the Social Security fraud line number. I had never heard of doing that until advised by a bank that called to tell me an application for credit was made over The Internet in my name. The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit.

By the time I was advised to do this, almost two weeks after the theft, all the damage had been done. There are records of all the Credit checks initiated by the thieves' purchases, none of which I knew about before placing the alert. Since then, no additional damage has been done, and the thieves threw my wallet away this weekend (someone turned it in). It seems to have stopped them dead in their tracks.

Now, here are the numbers you always need to contact about your wallet, etc., has been stolen:

1.) Equifax: 800-525-6285 (NOTE: I looked this up on equifax.com and found the number to be 888-766-0008 so you should call this number; all other numbers below matched).
2.) Experian (formerly TRW): 888-397-3742
3.) Trans Union : 800-680-7289
4.) Social Security Administration (fraud line): 800-269-0271

6 Ways to Kill Your Savings (DON'T DO THESE)

1. Don't have a budget - If you squander every penny you get, you'll never be ready for the unexpected or retirement. Plan your spending that is within your means. And by all means, pay yourself first (i.e., save some money).

2. Indulge in your whims - If you like it, buy it, right? Wrong! There is no reason to buy things just because they seem nice at the time. Think about the long term uses of the item or the long term implications of spending $250 on a watch "you should have to have". Even spending $30 that you don't need to spend could go a long way to other things like paying down your credit card or adding principle to your mortgage payment.

3. Splurge on gifts - We all know that true love is demonstrated by how many gifts or how much you spend on your children, siblings, family, friends, etc... Yeah, I know: ridiculous. Unfortunately, some people fall into that trap each and every holiday season and end up spending way more than they should and have debt left over until the summer. It's just a bad move. Value is not always about the money! Find that perfect little gift will go a lot further than spending $$$ just to spend it on someone.

4. Go ahead; buy an SUV - When you get the super-dooper SUV that get 15 MPG or less on the highway, your checkbook will be screaming for assistance! See the "Silly Song" about an SUV.


5. Rely on credit for emergencies - Don't worry; you'll never get sick or get into an unexpected accident (like we expect accidents) and have to pay a deductible. Always have an emergency cash fund. It's okay if you pay with a credit card. Just be able to pay if off when the bills comes in!

6. Skip routine maintenance - As long as your car seems to be running fine, why should you do anything, right? WRONG! Get your oil changed regularly. Get your brake pads checked. If your check engine light comes on, go get it looked into immediately. Many times, it may not be a big deal. The key here is to remember that preventive maintenance is WAY CHEAPER than "oh man, my car won't start at all and is really broken" maintenance.

401(k)

If your employer offers you a 401(k), you should contribute the maximum that they will match. Feel free to add more but at a minimum, you should put in what they'll match. For example, lets say that your company will allow you to contribute 6% of your income and they will match 50% of the 6%. If you earn $36K/yr ($3K/month), then you can contribute $180 per month to your plan. That means that your company will GIVE YOU FREE MONEY in the amount of $90 per month. Effectively, that is a 3% raise in your salary. The only downside is that in most plans you must wait a certain period of time (like 3 years or 5 years) to become fully "vested". All that means is that the money the company matches is not completely available until after the vested period. However, even if you leave a company before you are fully vested, the money you contributed is 100% yours and you can move to another 401(k) with you new company. That's called a "rollover".

How to Use Credit Cards

Here are some basic tips for using/getting a credit card:

1. Find the lowest interest rate possible.

2. If you are financially able, pay your balance in full each and every month. If you are riding out a 0% introductory rate, ensure you can pay the full balance at the end of the introductory period.

3. If you are unable to pay your full balance each month, pay as much as possible and always tackle the cards with the highest rates first.

4. Try to find a credit card that offers "cash back" or some other incentive. I have a Chase Freedom Card that has literally EARNED me thousands of dollars over the years.

5. Try to find a card with no fees at all. For some people who've had credit challenges in the past, this may be difficult and you may have to get a card that has fees just so you can start establishing good credit. Ironically enough, bad credit is better than no credit. I used to work at a car dealer and it was easier for customers with bad credit to get a loan than customers with no credit history.

6. Pay your bill online each month if possible. Save the money that you would spend each month on stamps and put it towards your bill.

7. Don't overspend. This will help you meet #2. Sometimes you just need to make a budget so that you know how much you can afford to spend each month on your credit card.

Manage Your Money Online

One of the key things about managing your money is knowing where it is, knowing where it is coming from and knowing where it is going. There are quite a few ways to do this. If you follow the guidance from the book, "Your Money or Your Life", you should know about EVERY PENNY that comes in and out of your life.

Some people choose to use a spreadsheet. You can also use something like Quicken or MS Money. Additionally, many banks have an online tool for managing all of your accounts. However, my personal favorite is Yodlee Money Center. Yodlee is the company that creates the software that is run by so many of your favorite banks. I like the generic site provided by Yodee because it's simple and easy to use and doesn't have any sort of bank flavor.

Generation Debt

I ran across an interesting book when I was reading throught the "I Will Teach You to be Rich" blog. The name of the book is Generation Debt, by Anya Kamenetz. Although I haven't read the book yet, she poses some issues that plague many of us in our 20's and 30's.

The book is linked here: