A Review: The Richest Man in Babylon

This is a short book; I was able to read it in one night – partially because it is short, but also because I couldn’t stop reading.  It uses stories from ancient Babylon to illustrate simple but important lessons about personal finance.  I’m not sure that the stories are based on anything except imagination, but the book was written in the 1920s.  It is refreshing to know that the principles that were used nearly 100 years ago (and according to the book thousands of years ago) are still valid today.

Several characters from ancient Babylon are introduced, most of whom I could relate to in one way or another.  There were some common sense, “of course” kind of lessons in the stories, but there were also some unexpected lessons that hit home for me.  One in particular had to do with procrastination, and why it can be costly to put off important decisions.

It is very creative and timely – I intend to give this book to kids in my family as they graduate from high school.

Amazon:  The Richest Man in Babylon

Inspiration at 33%

Hey I found a new podcast today, and I’ve listened to almost all of the new, 2008 podcasts.  It is called “No Credit Needed, or NCN for short.  I liked the name so much I just had to listen.  It’s basically an informal, humorous podcast by a normal guy who has worked his way out of debt and likes to talk about personal finance.  I’m not sure what his name is – online he seems to go by “NCN.”

The No Credit Needed website:  www.ncnblog.com

I like that he uses the same principles that Dave Ramsey teaches, so it’s nice to get another perspective to help balance things out.  It also helps that he’s willing and able to laugh at himself; in fact, even though he offers much of the same advice that Dave Ramsey teaches, the light hearted nature of his podcast is a welcome change.

Something he provides at his website is that you can sign up for a chart to show how much you’ve paid off, or towards a goal.  It inspired me to take a look at where I’m at – actually how far I’ve come would be more accurate.  I added up all the debt I had in 2007, in order to see what percentage I’ve paid off so far.  I had thought I had paid off more – but in fact, I have only paid off 33% of the total so far.  At first I was a little disappointed – I mean, only 33%?  But considering the time goals I’ve set for myself – it is right on target.  And hey, that 33% represents a considerable chunk of change.  I know in my heart that I’ve done everything I could to pay as much as I could since I started – so aside from a serious windfall, it’s the best I could do.  I have plenty of reason to feel good about where I’m at – and more importantly, that I’m still on-track and well on my way.

You never know…

So I discovered something interesting yesterday. One of my coworkers returned from lunch with a small group talking about the FICO score, and saying something along the lines of, “if you don’t use debt, you simply don’t care what your FICO score is.”

As I am right in the middle of working through Dave Ramsey’s baby steps, I piped up with “Yea! The FICO score is an ‘I love debt’ score.” My coworker responds, “That souns like Dave Ramsey.” It is. I have heard him say that so many times on his radio show. So my coworker revealed to me that he and his wife are working through Financial Peace University.  We talked and shared and compared notes – and gosh it felt great!

Wow. You just never know who in your life is working through stuff like this. Another coworker mentioned in the elevator that he wanted to find out more, because he had heard us talking during the day about FPU.

Money – and personal finance is such a private thing. We all want to put our best image out there – that we have no worries, that things are going well financially, but statistics say that most Americans are up to their eyeballs in debt. And more important, being in FPU does not necessarily mean that things aren’t going well financially – in fact, I would argue that somebody in an FPU class is showing incentive and a desire to do better in life, and with their money.

It was actually a big deal for me to start a blog to talk about my personal finances. I resisted at first – but wanted to share because this is such an important thing. About the only thing I regret about my education is that I never learned anything about personal finance – except how to take out a student loan. I feel strongly that a class like FPU should be made available in high school. Nobody should graduate from college not knowing what a 401(k) is.

We need to share this stuff – to tell our stories and share what works and what doesn’t.

I am embarrassed.

For both myself, and also for our country. I endured a fairly normal education: I graduated from high school, went to a 2 year college, and then on to a university to graduate with a Bachelor of Science in Computer Science.

So I was a little startled when, after starting my first career-related job after college, I was presented with something I knew absolutely nothing about: a 401(k). Now that I’m well into my career, and have accumulated enough personal finance know-how to understand the difference between a 401(k) and an IRA, I’m embarrassed. I’m embarrassed because our education system has failed me in a very important way: I graduated with a 4 year degree, basically financially illiterate. Through most of college, I managed my money the only way I knew how: by the seat of my pants. For the past several years I’ve done a little better because I make more money, but when I realized that it is now 2008, and I’ve been out of college for a decade now, I decided that enough is enough. I’m ready to do what it takes to be responsible with my money. I’m ready to be humble and learn what needs to be learned, and do what I can to try and ensure I can retire with some comfort. In short, I’m ready to make up for what I didn’t learn in college or high school.

So, I guess this means I won’t be purchasing that HDTV before the Superbowl this year. Bummer.

I’ve been reading a few books, and am ready to put good advice into practice. I intend to use this blog to document my progress – to let the world know how I’m doing, whether good, bad, or otherwise.