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🎯 The Book in 3 Sentences
💡 Key Takeaways
- Take responsibility for your finances: You are in control of your money situation and have the power to make positive changes.
- Control debt: Debt is not a tool for prosperity and should be paid off as soon as possible.
- Build an emergency fund: Having a reserve of money for unexpected expenses can provide peace of mind and prevent financial setbacks.
- Invest for the future: Investing in retirement accounts and stocks can help you build long-term wealth.
✏ Top Quotes
Ignorance is a major hurdle when it comes to handling money.
If you aim at nothing, you will hit it every time.
A paradox of wealth is that it makes you more of what you are.
📝 Summary + Notes
1. The Total Money Makeover Challenge
- You and only you have the responsibility for your money situation.
- Winning at money is 80 percent behavior and 20 percent head knowledge.
- You need to have the will to change.
2. I’m Not That Out of Shape: DENIAL
- How many days can you survive if you lost your job today?
- You have to act to make things better.
- You need to be financially smart. Informed about where your money is, how much you actually have, and what you actually need on a monthly or annual basis.
3. Debt Is (Not) a Tool: DEBT MYTHS
- Debt is not a good tool for prosperity.
- One of the best ways to lose a friend is to loan him money.
- Buying a car drives you away from financial wealth.
- Credit cards lead to debt. Use only debit cards.
4. The (Non)Secrets of the Rich: MONEY MYTHS
- The rich don’t have secrets. Everyone can be rich.
- Real estate, knowledge, and canned soup all are better hedges than gold against a failed economy.
- The best real estate investment is a house.
- Put a priority on money planning.
- Using cash makes you spend more wisely.
- Have insurance (health, life, etc.).
5. Ignorance and Keeping Up with the Joneses: TWO MORE HURDLES
- Most millionaires live in middle-class houses, drive paid-for cars that are two years old or older, and are just as likely to buy blue jeans at a discount store as fancy clothes.
- Millionaires are very bargain-conscious, and they frequently wait for items to go on sale.
- You must not care about your image of others.
6. Walk Before You Run: SAVE $1,000 FAST
- Make a monthly budget.
- Know in what category each dollar (euro, etc) you spend goes.
- If you are with someone, you have to agree on the budget.
- Create an emergency fund and don’t touch it.
7. Lose Weight Fast, Really: THE DEBT SNOWBALL
- To build wealth, you have to control your income.
- Debt is the enemy of your income. It keeps you from becoming wealthy.
- First, pay your smaller debts.
- Stop borrowing.
- Cut unnecessary expenses.
8. Kick Murphy Out: FINISH THE EMERGENCY FUND
- Have 6 months of expenses in an emergency fund.
9. Be Financially Healthy for Life: MAXIMIZE RETIREMENT INVESTING
- Invest 15% of before-tax gross income annually toward retirement.
- Invest in stocks:
- Growth and Income (Large-Cap, Blue Chip).
- Growth (Mid-Cap, Equity, S&P Index).
- International (Foreign, Overseas).
- Aggressive Growth (Small-Cap, Emerging Market).
- The author assumes retirement to be at the age of 65.
10. Make Sure the Kids Are Fit Too: COLLEGE FUNDING
- Don’t spend a lot of money for your kid’s college and don’t go into debt for that.
11. Be Ultrafit: PAY OFF THE HOME MORTGAGE
- Never take more than a fifteen-year fixed-rate interest mortgage.
12. Arnold Schwarzedollar, Mr. Universe of Money: BUILD WEALTH LIKE CRAZY
- If your bills are paid . . . you are giving what you feel you should give . . . you are invested for retirement to the degree you want to be invested . . . you have no debt . . . why not have fun?
- Until you have more than $10 million invested, keep your investing very simple.
- Always manage your own money.
- Build a team of advisers: Estate-Planning Attorney, CPA or Tax Expert, Insurance Expert, Realtor, and Financial Planner.
13. Live Like No One Else: REACH THE PINNACLE POINT
- Wealth and “stuff” is not the answer to happiness, emotional well-being, and spiritual maturity.