This book may be a strange choice for me. It's obviously written for women, but as someone who personally is recently engaged, and professionally advises couples about their money, I wanted to read a book about money and relationships that is written from and for the woman's perspective.
There are quite a few to choose from, including Nice Girls Don't get Rich, by Lois Frankel, and Smart Women Finish Rich, by David Bach (I wonder why David didn't write a book for men). I was drawn to Michelle's book because she is a well known personal finance columnist, and well, the colors on the cover were pretty. My review may run on the long side (I tend to be somewhat verbose), so this will be part one of two.
Let me first say that I have no scientific or methodical way in which I go about my book review. What I did here was read with two highlighters, one pink, the other yellow. In the end, most young people would be better off by reading and following the advice given by Michelle. Nonetheless, I found more pink highlighting than yellow by the time I was done.
I'll write this review like this. Things I didn't like, things I like, overall impression.
Things I didn't like:
Lots of problems with the second chapter, "A Home is Where Your Wealth Is". I agree with the premise that home ownership is the most powerful wealth building tool available to most families. I simply have some concern with getting in over your head to get into a house in a market that has more than doubled in many areas. Here are some pink highlighted quotes that I didn't like:
- "Homeownership also gives you additional spending power. Home equity can give you the opportunity to access cash when you need it, for everything from buying a car to paying off credit card debt." Homeowners are barraged with offers for home equity loans and lines of credit. She needs to take this opportunity to educate people on the risks, not encourage more of it.
- "It's not unheard of for people to be paying as much as 40 percent of their income for housing."
- "Don't worry if you can't put down the usual 20 percent."
- "The prospect of varying interest rate can be scary, but many borrowers opt to take the risk to get their foot in the door."
- "If you are in a high cost housing market or rising interest rates make buying a home more difficult, you might consider a forty-year mortgage."
So, from what I'm reading, it's okay to spend as much as 40 percent of my income on a low or no money down 40 year ARM. Yikes.
She has a considerable number of pages dedicated to cosigning for loans for your boyfriend or lending him money. She is adamantly opposed to doing either, which I agree with. However, I think that point can be made in a few paragraphs, pointing out the potential risks both financially and to the relationship. She stretches this section out too long, and still finishes by advising: but if you must, be sure to put everything in writing.
There seems to be a general lack of trust in men. Maybe it's justified, but there were times when I found it not only annoying, but contradictory. She strongly advocates that pre-nups are preparing to fail, and maintaining separate accounts is preparing for an easy exit. There is a level of trust that would seem to come from that level of financial and emotional commitment. Yet, in her quiz for newly engaged couple to take to see if they are on the same financial page, she asks, "I know how much he/she has saved in various accounts. We have shared these documents too." Well, my Fiancee and I have shared out account balances, but I don't need to see her bank statement. Give me a break.
Things I liked and Overall Impression will be in part 2 of this review coming within the next day.
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