Review: The Little Book of Main Street Money

I just finished reading “The Little Book of Main Street Money: 21 Simple Truths that Help Real People Make Real Money” by Jonathan Clements. I really like “Little Book Big Profits Series” and have already read four other books in this series. The best part of these series is that each book stands on its own, each dealing with different topics. At 192 pages, this book on Main Street Money is a tad on the short side and was also quite different than the other ones I read.

Overall this book was kind of a mishmash of personal finance advice, not relating specifically to one topic such as index investing, value investing, growth investing, asset allocation, etc… Rather, it had trace elements of all these topics along with much needed common sense. Throughout the book you could tell that the author advocates passive index investing in an asset allocation suitable for the reader that is rebalanced occasionally. He gives down-to-earth advice that is chock full of common sense about saving regularly, starting early, assessing home wealth, and paying off debts.

For me, it was too basic because I already have marinated myself in these ideas over these last few years. I didn’t really learn anything new, but I highly advocate most U.S. consumers to give this book a go seeing how many of us have a savings rate at 5% or less. Common sense isn’t always so common.

However, one paragraph in the book did resonate with me:

We associate wealth with the trappings of wealth, including the designer clothes and the luxery cars. But these trappings aren’t a sign of wealth. Rather, they are a sign of money spent – and the people involved are poorer for it. In fact, the richest family in the neighborhood may live in the smallest house with the oldest cars. Their frugality allows them to save like crazy. I am not suggesting this is desirable. Neither spendthrifts nor misers deserve our admiration. Instead, we should strive to strike the right balance, spending our money on the things that are important to us, but also saving enough for our goals.

I wrote a post related to this topic previously, of when people brag about how much money they spent I don’t feel envious  but rather sympathy because all it means is they are accruing more debt and it would be even harder for them to escape the proverbial rat race. I guess this is why this paragraph from the book just pinged to me. In addition, I definitely believe in enjoying the Now while also making sure we can attain our future goals.

Here’s a listing of the chapters to give a better idea of what this book is about:

1. Introduction – Let the Rebuilding Begin
2. Our Finances Are Bigger than a Brokerage Account – Pondering the Paycheck in the Mirror
3. We Can’t Have It All – And That Means We Need to Make Tough Financial Choices
4. Money Can Buy Happiness – If We Spend It Carefully-Getting in Touch with Our Inner Caveman
5. Even the Best Investors Need to Be Great Savers – Thrift Doesn’t Come Naturally, So Try Trickery
6. Time Is as Valuable as Money – Investment Compounding? Yes, It Is Truly Magical
7. No Investment Is Risk-Free – It’s a Dangerous World-Even for Those Hiding out in Savings Accounts
8. Portfolio Performance: It’s All in the Mix – Our Stock-Bond Split Powers Our Investment Results
9. Stocks are Worth Something – Getting a Piece of the Economic Action
10. To Add Wealth, We Need to Overcome the Subtractions – If We Aren’t Careful, We’ll Double Our Money-in 47 Years
11. Aiming for Average Is the Only Sure Way to Win – Why the Meek Will Inherit the Earth
12. Wild Investments Can Tame Our Portfolios – Looking to Zig When Everything Zags
13. Short-Term Results Matter to Long-Term Investors – Keep One Eye on the Horizon-And the Other on the Ground Ahead
14. A Long Life is a Big Risk – The Danger: We Run out of Money Before We Run out of Breath
15. Markets May Be Rational, but We Aren’t – Investing Is Simple-And Yet It Sure Isn’t Easy
16. Our Homes Are a Fine Investment that Won’t Appreciate Much – They’re Money Pits-with Impressive Dividends
17. Paying off Debts Could Be Our Best Bond Investment – How Does a Guaranteed 15 Percent Sound?
18. Saving Taxes Can Cost Us Dearly – But Retirement Accounts are the Big Exception
19. A Tax Deferred Is Extra Money Made – Why We Should Keep Uncle Sam Waiting
20. Insurance Won’t Make Us Any Money-If We’re Lucky – The Best Protection is a Plump Portfolio
21. Even If We Have a Will, We May Not Get Our Way – Don’t Fret Over Estate Taxes-but Worry About Those Legal Bills
22. Financial Success: It’s About More than Money – Family Can Be Our Greatest Asset-and Our Greatest Liability
23. Conclusion – Wall Street? That Isn’t So Far from Main Street

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