The Truth about Money

The Truth about Money

3.2 29
by Ric Edelman
     
 

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"The advice is sound, insightful, and can be used by young people just getting started, advanced investors, and everyone in between." — Jack Kemp

As incomes shrink and the cost of living continues to rise, more and more people are searching frantically for ways to build a stable financial future. But in the crowded and volatile world of today1s

Overview

"The advice is sound, insightful, and can be used by young people just getting started, advanced investors, and everyone in between." — Jack Kemp

As incomes shrink and the cost of living continues to rise, more and more people are searching frantically for ways to build a stable financial future. But in the crowded and volatile world of today1s financial marketplace, the sheer number of available investment options has even sophisticated investors scratching their heads.

On this audio, taken from his best-selling book, The Truth About Money, long-time financial planner and Wall Street guru Ric Edelman has created an accessible and practical approach to money management that cuts through all of the confusion and delivers an unbiased and lucid guide to selecting the right investment strategy.

Here Edelman focuses on such key topics as estate planning, tailoring investment strategies to suit income and needs, and choosing a financial advisor. He takes the guesswork out of financial planning and provides the novice and the experienced investor alike with the tips, tools, and insights they need to make their hard-earned money work for them.

Edelman's latest audiobook The New Rules of Money is also available from HarperAudio.

Editorial Reviews

USA Today
Conversational, clever...and easy to read.

Product Details

ISBN-13:
9780694519149
Publisher:
HarperCollins Publishers
Publication date:
12/28/1997
Edition description:
Abridged, 2 Cassettes
Product dimensions:
4.55(w) x 7.07(h) x 0.81(d)

Read an Excerpt

Chapter I - The Four Obstacles to Building Wealth

As you begin trying to accumulate wealth, you'll encounter four major obstacles. The first is the most deadly, but if you think it's the economy or taxes, you're wrong. Your biggest enemy, as I can attest from having worked with thousands of people just like you, is yourself. Without question, procrastination is the most common cause of financial failure.

You know the story of Jack and Jill. But did you know Jack was pushed? (Never mind.) As a result of his head injuries, Jack decided not to go to college. Instead, at age 18, he got a job, enabling him to contribute $2,000 to his IRA each year, After eight years, he stopped, having invested a total of $16,000.

Meanwhile, his sister Jill, inspired (guilt-ridden?) by Jack's accident, went to medical school. At age 26, she began her practice and started contributing $2,000 to her IRA. And she did so for 40 years, from age 26 to 65. She invested a total of $80,000 and sheput her money into the same investment as her brother Jack. Thus, Jill started investing the same year Jack stopped, and she saved for 40 years compared to just eight years for her brother.

By age 65, whose IRA account do you think was worth more money?

Assuming Jack and Jill each earned a 10% return, Jill accumulated $885,185, but Jack collected $1,035,160 - $149,975 more than his sister!

While Jack had invested only $16,000 to Jill's $80,000, his money earned interest for eight years longer than his sister. It wasn't the money that made him successful -- it was the time value of money. Jack didn't procrastinate: By investing sooner than Jill, his account grewlarger.

I have heard the complaint that procrastination does not belong at the top of my "Enemies of Money" list. There must be other, more serious causes for financial failure, right?

Wrong!

Obtacle #1: Procrastination

I cannot stress enough the need for you to get started right now. Procrastination says you'll do it tomorrow. It's easy to see why you put planning off until later: After all, who has time? You've got lots of deadlines and you don't need another one. You've got to get to work on time, get your kid to soccer practice and prepare for visiting out-of-towners this weekend. With today's deadlines, you don't have time to work on something whose effects will not be felt for 20 years. But that's okay because you're young and you'll still have plenty of time later! Right?

Wrong!

Maybe this is why so few of my firm's clients are under 30. It just seems that young people don't want to talk about something 40 years away: They're more concerned about this weekend's party!

In fact, I've heard all the excuses people use: If you're in your 20s, you figure you've got 40 years to deal with it, so you'll put it off until you are in your 30s...

... but by then, you've got a new house, new spouse and new kids -- and you're spending money like never before. Who can think about saving at a time like this? You'll deal with it later, after things settle down in your 40s...

... when indeed you're making more money than ever, but now you find that your children are entering college. On top of that, your income growth isn't as rapid as it used to be. No problem, you say, because by the time you hit your 50s, you think your major expenses will be behind you...

... Only to discover that your kids start to get married (with you footing the bill) and maybe they need help buying a house, too. And your parents probably need some help as well, because they're getting up in years. And you can't remember the last time you got a promotion; after all, you're now a vice president. The only wayyou'll get promoted is for somebody to retire or die. You're also finding that the cost of living has never been higher, so planning for retirement will just have to wait a bit longer...

... and when you hit 65, you lament your anemic savings and wish you had started 40 years ago.

I see this all the time.

If there is only one thing in this entire book that you need to take on faith, it's this: There is never an ideal time for planning, and while you can always find a reason to put it off, don't. Do it now. Procrastination will cause you financial ruin more effectively, more completely, than the worst advice a crooked broker could ever give you.

The Cost of Procrastination

There is, in fact, a specific cost to procrastination. If you are 20 years old and you want to raise $100,000 by age 65, you need to invest only $1,132 today (ignoring taxes for the moment and assuming a 10% annual return).

But a 50-year-old would need to invest nearly $22,500 to obtain that same $100,000. This is the cost of procrastination. As you can see, it's not money that makes people financially successful, it's time.

What People are saying about this

Bob Clark
"[The Truth About Money is] a single source for what you need to know to put your financial house in order, an impressive piece of work, and very useful...It's the kind of book all financial advisors want to write, but rarely do."
Cal Thomas
"Ric is one of the most engaging communicators of our time. He makes financial planning fun."
Sen. Chistopher J. Dodd
"[The Truth About Money] offers intelligent and practical insights that can help readers achieve their financial goals."

Meet the Author

Ric Edelman is Barron's #1 independent financial advisor, the bestselling author of seven books on personal finance, and host of The Ric Edelman Show, heard on radio stations nationwide. Ric's firm, Edelman Financial Services, manages $5 billion in assets and has been helping people achieve financial success for twenty-five years.

Ric Edelman is Barron's #1 independent financial advisor, the bestselling author of seven books on personal finance, and host of The Ric Edelman Show, heard on radio stations nationwide. Ric's firm, Edelman Financial Services, manages $5 billion in assets and has been helping people achieve financial success for twenty-five years.

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Truth about Money (3rd Edition) 3.2 out of 5 based on 0 ratings. 29 reviews.
Guest More than 1 year ago
This book is fantastic. It is comprehensive for the average person who needs to know about crucial areas in personal finance. The author covers everything, and not only on a superficial level, but quite a bit in depth. One aspect that I really appreciate is that he doesn't just say, 'This is good, but this is bad', he really takes the time to explain how certain market forces work, as a working background, then says, 'And that is why this is good' - and in that way enables the reader to be able to analyze certain investments, not just memorize specifics. For instance, his section on explaining bonds was really eye-opening. Finally, he does all of this in a very conversational manner, so you don't get bored like other techincally oriented books might induce. This is a must-own, mini-finance dictionary for the person who is asking, 'How do I start understanding all this finance stuff?'
Voxover More than 1 year ago
Ric's book is very readable and insightful. I almost wish that it the lessons it contains were taught in High School. Ric demystifies money management and inspires people to take control of their financial future
Guest More than 1 year ago
For several years, I've been weeding through financial books to get different 'professional' opinions and thoughts on money and how to manage assets. If you went to the personal finance section of a bookstore, you'll see dozens if not hundreds of titles. This book is the ONLY book you need- period! Read everything else, then buy this book. All of your necessary questions are answered. I like a guy who says WHY to do what he tells you, and what to expect if you don't follow his advice. I like all of Ric's stuff, but this is the true original, and is the only book you'll need.
Anonymous More than 1 year ago
Anonymous More than 1 year ago
This is a great financial overview, and pretty easy to read. It's written in a conversational tone, and covers a plethora of topics. Obviously, if you are seeking in-depth information on a specific topic, you'll want to look elsewhere, but for a wide-angle shot of finance, this is a great book. I also have the Lies About Money, which is really helpful when I was setting up my investing portfolio.
silencedogoodreturns More than 1 year ago
Highly informative and educational. If most people would just read this book, we'd be a far more prosperous nation
RoryNV More than 1 year ago
I first read this book in 1996. It is the definitive work on Personal Finance. I have read all the new editions which are written to keep the information current. One would expect a book on this topic to be dry and boring but this author has a breezy style that uses many anecdotes and analogies which makes it fun to read! My favorite is the story of Jack and Jill and compounding interest! This book has been so helpful that I present it to all the young people in my life upon the graduation from school. It covers everything from retirement planning to estate planning, getting out of debt to investing and home mortgages. I am here today to buy one for a nephew who is embarking on his adult life. The book served me so well, I now listen to Mr. Edelman's weekly radio show and hired his firm to provide financial planning guidance for me and my wife.
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