Why Didn’t They Teach Me This in School: 99 Personal Management Principles to Live By by Cary Siegel is a book that talks about 99 important principles to achieve financial stability. Cary speaks from a place of experience as he retired at the age of 45! These principles apply to people of all ages and abilities. Regardless if you are a beginner or expert in finance, you will learn something new by reading this book. This may not be the most interesting book that you will ever read, but it will surely benefit your financial life for the rest of your life!
In this Why Didn’t They Teach Me This in School book review, you will gain an insight into what Cary did to get his financial life in check. This is going to be a slightly shorter review than usual. Let me know if you enjoy these shorter reviews in the comments. Let’s get into it.
Life Lessons – Think Big to Earn Big, or Save Big!
In this section of the book, Cary talks about money as a way of life. You have to have the mindset of a saver to start saving money. This is clearly outlined in some of his principles:
- Settle down with a financially aware person
- Live below your means- don’t buy things you cannot afford
- Learn about personal finance- at least 1 hour a week
Some of the other principles he talks about are:
- Develop a net worth budget- net worth is assets take away liabilities; aim to increase your net worth over time
- Create short term and long term financial goals- short term goals are monthly and annual goals whereas long term goals span over multiple years
- Get rich slowly- play out the long game in terms of money (don’t think about getting rich now, but rather in years to come)
Budgeting and Saving Lessons – $$$
I believe that this chapter is one of the most important chapters in the book. This is where money will start to be saved if you implement the principles right. It outlines some very important habits that you need to get into such as:
- Develop a monthly budget- this involves looking at your money in vs money out, as well as working out what percentage of your budget goes to pay the bills, what percentage goes towards entertainment, etc.; you can do this using a pen and paper or on an app such as Mint or Clarity Money
- Save 90% of every bonus
- Have an emergency fund- something to fall back on in case of emergencies, either good or bad
- Have an emergency January- to account for the increased spending in the winter holidays, you need to live this month as if you just need to survive
Spending Lessons – Where Most People Fall Short
People nowadays are inclined to buy more and more, thinking that by having more and spending more money they will be happy. In reality, all this does is make you more likely to run into debt. Some principles Cary suggests to stick to are:
- Before you buy anything expensive, STOP and think about the decision that you are about to make- do you need that expensive car that everyone is talking about?
- Split your spendings into wants and needs- you can’t have it all
- Spend more to save more- this may sound counterintuitive, but, for example, buying a higher quality, more expensive tracksuit rather than a cheaper one may last you an extra two or three years so it is worth the buy
- Negotiate everything- it may help to learn some negotiation skills for this; take a course or buy a book
- Stay away from deals that sound too good to be true- you know those deals, the “Congratulations, you just won a Lamborghini! Claim it here.” kind of deal; stay away from those
Debt and Card Lessons – for the Young
Young people tend to get into debt pretty easily: the college and university fees take their toll on their financial life. Cary recommends the following principles:
- Get out of debt- very simple, but not that easy to do; should be priority #1
- Do not, under any circumstance, get a credit card in college/university- this will create even more debt
- Have only one credit card
When you are looking at housing, it is a good idea to:
- Pay rent until you settle down
- Buy less house than you can afford
- Get a 15-year mortgage rather than a 30-year mortgage- cheaper in the long run
Some tips here include:
- Invest in 401K investment plans- the money that you put in is tax-free, but you cannot withdraw it before you turn sixty-five
- Avoid “get rich quick” schemes- you know, those schemes that sound too good to be true
- Don’t invest in family and friends- you may be disappointed if they don’t return the money and this is a good way to break friendships so just don’t do it
Overall, this book is a must if you want to achieve financial freedom over time and have a happy retirement. Cary Siegel’s 99 principles can be implemented by anyone, although some of the principles take longer to implement than others. Some of his principles are obvious (such as “avoid get rich quick schemes”) whereas others illuminate a path to financial stability. Buy this book if you are interested in that.