If you’re going to read just one financial book this year, read “Money Magic: An Economist’s Secrets to More Money, Less Risk and a Better Life” (Little, Brown Spark) by well-known economist Laurence Kotlikoff, who also co-authored the definitive book on Social Security, “Get What’s Yours.” Kotlikoff has the extraordinary ability to make complicated money matters understandable — and to debunk the lures of Wall Street and the financial planning community.
Kotlikoff is a financial do-gooder, and he has done his best work in the just-released “Money Magic.” Let me give you just a few of the highlights in the hope that you’ll want to read his pithy and personal explanations of how the financial world really works. This book will create “A-ha!” moments for readers of all ages.
For instance, did you ever want to tell your child or grandchild that it’s insane to take on student debt to get a degree in a field that can never repay the debt plus interest? It’s just common sense, of course. But no one wants to spoil their children’s dreams of a career in fine arts or tell them that entry-level PR positions won’t help repay student loans.
Kotlikoff shows you how to get the facts about careers that have increased earnings potential based on demographic changes such as aging. To avoid being outsourced by a robot or offshored in the next economic cycle, he advises looking in the fast-growing healthcare industry — or even becoming a mortician! (You’ll get used to his sense of humor, based on fact!) He correctly notes that plumbers will always be in demand.
Here’s another chapter that might not seem politically correct but makes tremendous financial sense. Read his arguments in the chapter called “Marry for Money.” This chapter is too much fun to spoil with a description. Just let me say that I knew I heard this advice before — from my grandmother!
The chapter titled “Get House Rich” explains the long-term impact of deciding where you will live — and how the money you don’t spend on housing can be leveraged for your future financial security. Creative ideas to make sure you understand the true cost of your housing decisions may change your perspective — from moving back home with Mom and helping her save money on repairs (while you save on rent) to choosing a housing location far from the trendy but expensive cities. Spending less on housing now, can raise your standard of living significantly over your lifetime.
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