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- Reader Case: My Irresponsible Parents Are Destroying My FI Plans! - December 14, 2020
One of best things about early retirement is having the time to read books. Back when I was working, it used to take me a whole month to get through a single book, and even then I’d usually get so distracted I’d just quit a third of the way through.
Now I’m able to read way more books, but what I’ve discovered is that I have a really short attention span–especially when it comes to finance books. And it’s become exceedingly rare for me to find voices in the personal finance space that I can connect to.
Which is why it was so surprising when I read Erin Lowry’s “Broke Millennial” book. The writing grabbed me from page one:
“In the summer of 1996, a glazed Krispy Kreme donut change my life. Well okay, not just one donut: five dozen Krispy Kreme donuts.
It all began on a humid morning in North Carolina when my mom decided to engage in one of the most dangerous and cutthroat suburban activities: hosting a yard sale…”
“Wait what? This is a finance book?” was my immediate thought. Up until that point, none of the finance books I’d read had a narrative voice, so I was instantly hooked.
That morning, I dropped everything I was doing (which, for me, was basically nothing—because, you know, lazy and retired) to read her book. It’s not often I read finance books with characters and a narrative voice, but this book hooked me all the way through. From talking about “Getting Financially Naked” with your partner, to “Is Money a Tinder Date or Marriage Material”, the book was a joy to read and the exact opposite of what comes to mind when you hear the words “finance book”. I also love the fact that Erin’s so relatable and encouraging, you’ll feel like you’re hanging out with your BFF.
It’s no wonder Broke Millennial was included in the list of the best 13 finance books of the year, according to NY Magazine: http://nymag.com/strategist/article/best-personal-finance-books.html
Last year, I was beyond excited to learn that I was going to be her pub-sister (meaning we were both at the same publisher) when we signed the contract with Penguin. And one of the advantages of being in the Penguin family is getting books to blurb/review before they even come out. And I’m super happy to have the privilege of reviewing Erin’s newest book, Broke Millennial Takes On Investing, that just came out last week!
If you want to become financially independent but still have student loans and/or don’t know anything about investing, this book is required reading. I wish someone had given me this book right out of college. Back I didn’t even know what “equities”, “REITs”, “index investing” meant, never mind how to build a portfolio. This book would’ve been the perfect primer to get started without intimidating me with a ton of technical jargon.
For those of you who are just dipping your toes into the investing waters or know of someone who’s too intimidated to invest, here are 3 things in Erin’s new book that I found the most useful:
Creative style of writing
One of my favourite ways to spend money is on books but I absolutely loathe reading heavy tomes. Books are fun, those tomes are assignments. And what Erin does really well is she uses a relatable writing style to teach you concepts in a fun way. For example, in one section she even writes a “Love Letter To You from the Stock Market.” How creative is that?
Investing for Freelancers
Since Wanderer and I had full-time jobs, we’ve never talked about how to open SEP IRAs and Solo 401Ks on this blog. But since Erin works for herself, she shares useful tidbits about the logistics of opening up a Solo 401K and how to invest when you have to manage an unsteady income as a freelancer/entrepreneur. Definitely worth a read and helpful for those who are in this situation.
Given that I think automation is causing Millennials and the next generation to have “episodic careers“, you might need to know this stuff sooner rather than later.
Several readers have written in asking us about robo-advisors. They want to invest but don’t feel they have the time to manage the portfolio themselves. We believe you need to learn how to invest and not rely on robo-advisors as a crutch, but for those of you experienced with our investment workshop and want to look into automation, it’s worthwhile to read this chapter to find out how robo-advisors work and evaluate whether if they are right for you.
Should You Invest if You Still have Student Loans?
One of the biggest challenges Millennials face is the increasing cost of education. On the plus side, Millennials also have the advantage of time on our side—if you’re young, you have more time in the market for your money to grow. But what if you still have student loans? Should you invest or pay off your student loans first? This book tackles this question.
Now, as much as I enjoyed this book, there are a few things I disagree with (because how boring would it be if we agreed with each other all the time?)
Erin mentions that some advisors rail against target-date funds because they make you pay for services that you can do yourself (this is how we feel too). But she herself thinks they are valuable to get people started in investing, even if the fees drag down your portfolio, because it’s better to get started than miss out due to analysis paralysis.
Even though I agree with her on some level, as with robo-advisors, I think you need to understand exactly what’s going on with your portfolio because if you don’t, you run the risk of losing money due to ignorance. It’s always better to DIY from the ground up when you first start. If you’re not willing to put in the time to learn exactly how investing works and just blindly let others figure it out for you, investing’s probably not for you.
Erin talks about withdrawing from your retirement accounts before 59.5 and how you’ll get hit with tax penalties, which is true, but there are ways around this (namely the Roth IRA conversion ladder that we explained here). She mentions that rules change all the time, so she doesn’t like to mention loopholes. This is fair, but I still would’ve liked some mention of this, just so readers are aware and can decide for themselves whether they want to use it.
But overall, these are just nit-picks. If you’re beginner to investing and have no idea where to start, this book is the perfect reference! While this isn’t a FIRE book and more of a general finance book, I’d recommend it as mandatory reading before you read any FIRE books so you can understand what the investing terms mean.
Now, given how international our readers are, one of the questions you might be wondering is “What if I’m not American? Does this book still apply to me?”
Although it talks about 401Ks instead of RRSPs, Superannuation accounts, CPFs, or RIESTER plans, you can still glean a lot of information about the stock market and investing from this beginner’s guide. Erin gives you a thorough overview of what you need to know to get started, and once you are familiar with the terms, you can adapt the advice to your own country and situation.
And guess what? No matter where you are in the world, you can enter to win one of 3 copies of Erin’s book!
Simply do one of (or all of ) the following:
- comment below and let me know why you want to win a copy of this book.
- tweet this message: “Want to learn how to invest and level up your money? Read Broke Millennial Takes On Investing: https://tinyurl.com/y542asdj”
- subscribe to the MR mailing list using the opt-in bar at the top of this page
You get 1 entry per action above. Enter them into the Rafflecopter tool below and at the end of the week, I’ll randomly draw 3 winners and e-mail you instructions on how to claim your prize!
Note: For Americans, you’re entering to win 1 physical copy of Erin’s book Broke Millennial Takes On Investing. For international readers, you’re entering to win an e-copy.
The 3 winners have been drawn and they are…. *drum roll* :
- Quoc. D
- Sarah. M
Check your e-mails and I will have your prizes sent shortly! Congrats to the winners and thanks to everyone who entered!
For those who didn’t win and really want a copy of this book, you can buy Erin’s book here!
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