Introduction

Mastering Money is a book about personal finance. I am attracted by the subtitle, especially on how to be prepared for any financial crisis. This book is intended for US citizens, but some lessons can be applied in Malaysia too. The writer wants to help the readers to learn to get their finances in order and to invest in the future.

Author

Norm Champ is a lawyer by profession. He is currently a senior partner in the Investment Funds Group at Kirkland & Ellis LLP and a lecturer on investment management law at Harvard Law School. He was the former director of the Division of Investment Management at the US Securities and Exchange Commission (SEC). The author worked for Chilton Investment Company and Davis Polk & Wardwell before joining the public sector. He also has written another book, Going Public.

Content

Mastering Money has a total of 10 chapters. Chapter 1 serves as the introduction of the book. The remaining 9 chapters are divided into 3 parts. Every part begins with a short introduction before the main contents.

The first part is Take Hold of the Spending Governor and it consists of 4 chapters. This part is talking about reducing debt.

The second part is Increase Inflow and contains 2 chapters. It is about increasing income.

The third part is Investing for the Future and is made up of 3 chapters. This part discusses investing and also about financial education for all.

There is an excerpt from the author’s previous book, Going Public, at the end of this book.

Review

Mastering Money gives out practical financial advice, which is supposed to be common sense, but I think a lot of people find it hard to practice the recommendations. However, if you are able to take action, I believe that your finances will be in order and you would not have much worries about money.

So, the first step is to reduce our spending outflow. That means control our expenditure. This part gives tips to eliminate nuisance and hidden costs and spur-of-the-moment shopping. Besides that, beware of mortgages and debts as overleverage will derail our finances. The author also advises against gambling as the odds are not in our favour.

The second step is to find ways to increase our income. The author believes that a stable job is good for the well-being of a person. Thus, it is important or every able person to have a job. Earning is important but saving is often underrated. Even if you can earn a lot of money, you would not accumulate any wealth if you cannot save at least some of the earnings. The author encourages the readers to save an emergency fund equivalent to expenses of at least 6 months.

The last step is to invest. With saving alone, it would not be enough to lead a comfortable retirement life. The author suggests some formulae for the asset allocation and it is up to us to decide which fits our temperament. The ultimate goal is to become a net worth warrior.

The 2008 financial crash seems to be the reason for the author to write this book. The author mentions about this crisis a number of times in the book. Besides that, he also talks about his experience in SEC and law practice in relation to the theme of the book.

Overall, I think Mastering Money is good for someone who wants to take charge of his or her finances. Nonetheless, some issues mentioned in the book are not relevant in Malaysia. Thus, we just have to filter the information and apply the three steps according to our situation.

Quotes

1. I believe that a fundamental component of true adulthood is the ability to be self-sufficient.
2. In many ways, mastering money is about becoming the master of your mind and sorting out financial truth from truisms and myths.
3. Mastering money means learning to think more independently, to reject harmful narratives, and to act in your own financial best interest.
4. If you want to know how to make gains without risking everything, there is only one proven strategy: buy and hold.
5. When you have more assets than liabilities, you don’t have to worry that everything will be taken away from you if something goes wrong.

Rating

Interested in Mastering Money?

You may get the book from Kinokuniya Malaysia through the link below*.

Get the book here

*Disclosure: The above link is Involve Asia affiliate link. Thus, I may earn a small commission when you purchase the book through this link.

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