Smart Couples Finish Rich (David Bach) 4*

I like David Bach because he gets it that people are lazy and habitful.  Also, knowing that human beings only remember stories, he writes with a strong narrative line.  This is my kind of self-help book.  Bach’s big hit was The Automatic Millionaire, which explains how to set up your finances once and then visit them for a few minutes a year.  A copy of that book should be mailed to every American upon their first tax filing; the fact that half of Americans at age 50 have under $25,000 in savings makes me panic a little.

I didn’t need The Automatic Millionaire to learn how to set up my 401(k) and its charming little basket of index funds, but Smart Couples actually has a bunch of useful insights on how to make your finances a two-player game.  I’ll need to read it more carefully if I ever meet that special someone to share a joint account with.  David Bach refreshingly understands that we don’t all want the same thing since maybe some of us don’t want to have kids, and that makes me like him.

The useful-to-people-who-are-not-me lessons include (1) don’t just bob along on the stream of money: set goals and start paddling, and (2) compound interest can make your daily over-priced coffee into your secure retirement.

The useful-to-me lessons include (1) organize your files exactly as David Bach explains it, (2) talk to your partner explicitly about money because your assumptions will be totally different, even if you are David Bach and his sophisticated wife (3) talking about money will keep your marriage a partnership because you will always have this all-pervading issue under common stewardship, (4) set up a living trust (as opposed to a will) but don’t put your retirement account into it, (5) consider various kinds of insurances at certain points of life, and (6) get the 30-year mortgage for flexibility (so you can choose how much to pay early).

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