Master Your Money
Author: Ron Blue
Master Your Money is one of the most useful books I have read when it comes to financial planning and security. I don’t know much about Ron Blue and had never heard of him before reading this book, but I have to say he is incredibly intelligent. Master Your Money is comparable to some of the books from the Rich Dad series, which I love. Blue gives very detailed descriptions of how to accomplish certain financial goals and even offers some minor coaching as to where to start with those goals.
Short-Term & Long-Term
The whole book is kind of written around the concept of having both short-term and long-term objectives for you and your money. Blue shares his flowchart for this multiple times throughout the pages of the book. Basically, your short-term income objectives are all of the immediate expenses you need to fund when you get paid. This includes things like basic living expenses, taxes, charitable giving, debt repayment, etc. The money you have leftover after each of your short-term objectives are taken care of is considered your cash-flow margin. You then use your cash-flow margin to take care of your long-term income objectives. These would be things like financial independence (retirement) or owning your own business.
The Rule Of 72
The one thing I learned that stood out the most to me in this book is the rule of 72. Blue explains that any interest rate divided into 72 will give you the amount of time needed for the money you have to double. In hindsight that is pretty obvious, basic, math. But I had never thought about it before so I’m actually very glad Blue shared it in his book.
Major Money Mistakes
Blue shares his opinion of the 3 most common mistakes people make when it comes to the cost of living.
- Consumptive Lifestyle. This is basically just spending more than you can afford or spending more than you should.
- No budget. Living without a budget will make you someone who does most of their purchasing based on emotion instead of logic.
- “Driving to the poor house.” Buying and selling cars. People buy cars that cost too much just to look cool. Then, a few years later, they trade that car in for a newer model or newer car and therefore continuously increase their debt to the lender who owns their debt for the car.
As usual, I only touched on the few topics I thought were most important in the book. Blue also goes over how to reduce your taxes, how to budget your money, etc. I think there are many books like Master Your Money out there, but what makes this one a little bit better than most is that Ron Blue offers worksheets throughout the pages of the book. If you’re not already familiar with financial planning for yourself or you just want to learn a little more about it, I think you can get a lot out of this book.