Sunday, February 20, 2005

Sunday Book Review: Financial Peace Revisited

Dave Ramsey's story goes something like this:

Back in the day, Dave was into "creative real estate." You know the kind--it's the kind that you see advertised on late-night TV, where you try to buy real estate you can't afford by financing it for "nothing down." He did other types of real estate as well, but he was caught up in the get-rich-quick mentality that dominates a lot of wealth-building videos and seminars. Before too long, he was an on-paper millionaire.

Of course, it wasn't too much longer before bad market conditions, some changes in real estate law, and a whole bunch of debt caught up with him, and he was right back to being, not stone cold broke, but drowned in debt he couldn't afford.

So he dumped the "Get Rich Quick" mindset and adopted a bunch of tried and true, no-risk ways of getting out of debt and building wealth. As he likes to say, "It's the kind of financial advice your Grandma would give you."

As some of his old associates started seeing how well he was doing and as some of the pastors at his local churches asked him to help people in financial dire straits, he decided there might be a market for a book about simple financial principles.

He wrote it, called it Financial Peace, and self-published 1,000 copies. Around the same time, he started doing a little show on a local radio station.

Now, his books are bestsellers, and the radio show is nationally syndicated. Seems people are hungry to hear no-risk, simple, common sense financial talk.
This is an expanded version of that original manuscript, with a few new chapters and additional commentary by his wife Sharon. This is basic, nuts-and-bolts commentary on debt and finance. If you only buy one book on money (and why would you only want one book on a topic like money?) this would probably be the one.

It gives simple explanations about everything from how to pick a mutual fund to what all the "alphabet soup" (529? 401K? IRA? 403B?) savings plans are all about.

But most importantly, this book seeks to give you the emotional drive to do all of this, not just the logic. After all, when was the last time you saw somebody running down the street like a mad man, screaming, "ARRRGH! I have come to a logical conclusion!!"

The truth is, until we get emotional about something, we flat-out don't do it. Hopefully, this will give you some of what you need to get going. Like the title states, it isn't so much about getting rich (although it certainly tells you how to do that by retirement) as it is about peace. Not staying up at night, worrying about how sick your daughter might be, and where you would get the co-pay from if had to take her to the emergency room the next day.

I've been there, and I'll tell you, I'm not going back.

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