TL;DR: Financial Literacy for Young
If you’ve already purchased and read the book, I would really, really, really (did I mention really?) appreciate it if you’d be willing to spend between one and five minutes to give me some constructive feedback.
You know you need to learn more about personal finance in order to make financial decisions, but you just find it too overwhelming, too intimidating, and too time consuming. This book was written for you, giving you the basics in less than an hour, and then directing you to further resources if you’d like to learn more.
This book isn’t about “getting rich quickly” (not that’s there anything wrong with that), but it’s about gaining knowledge and building your capacity in order to live a good life. What’s a “good life”? I don’t know, everyone’s definition is different. What’s important is that you take the time to define what a good life is for you, and then align your financial decisions with that.
I say “book” because that’s what Amazon calls it, but it’s more like a really long blog post. I wrote it because finances and financial decisions are such a huge part of everyone’s life that they should take the time to thoroughly educate themselves. Since many folks won’t do that, this book is an attempt to quickly give them the basics and hopefully encourage them – and give them the confidence – to learn more.
It’s about 30 pages and should take less than an hour to read, so instead of TL;DR (Too Long; Didn’t Read) it will hopefully be JR;DR;KM (Just Right, Did Read, Know More). It’s available in both a Kindle and paperback version.
The great thing about the Kindle version is that if you have Kindle Unlimited, you can read it for free. And if you have Amazon Prime, you can also read it for free through the Kindle Lending Library.
I am not a financial planner. I have taught students mathematics and computer science for over thirty years, but have no formal training in personal finance or investing, and no certifications. I am simply a lifelong learner, constantly curious, and have been interested in personal finance since working in a credit union during high school and college, and continued to be curious and learn more about finance during my career as a public school teacher. Over my years as a teacher, I discovered that not only did my students not know much about personal finance, but neither did my family, friends and colleagues (I often served as a resource for those folks).
Partially as a result of that experience, I see the necessity for a book such as this, as I wanted to do my part to try to help others become financially literate. While it would be nice to make a little bit of money from this, that’s not really my expectation or my goal. This is a passion project for me. I hope folks find it helpful. If you do buy it (or read it for free), it would be helpful if you could leave a review on Amazon and/or email me at firstname.lastname@example.org a “testimonial” that I can add to this website. By the way, since this is graduation season, if you like it you might consider it as a possible gift idea for the high school or college graduates in your life.
If you happen to live in Colorado, you might also be interested in these financial literacy classes I’ll be offering.
What people say?
Blogs That I’ve Found Helpful
Mr. Money Mustache: Pete (Mr. Money Mustache) retired in his early thirties. His blog is both a practical and philosophical look at living an intentional financial life.
Mad Fientist: Brandon retired in his thirties and his blog (and podcast) is focused specifically on providing advice and innovative tax-avoidance methods for people planning to break away from full-time employment very early in life.
Our Next Life: Tanja retired at the age of 39 and her blog chronicles her and her husband’s journey to early retirement and beyond.
1500 Days to Freedom: Carl retired at the age of 43. His blog focuses on making fulfilling financial (and personal decisions).
Go Curry Cracker: Jeremy and Winnie retired in their thirties, and their blog has a strong emphasis on tax strategies as well as “geographic arbitrage” (living abroad or in lower cost-of-living areas in the United States)
Financial Panther: Kevin is an attorney whose blog has great articles on travel hacking and side hustles.
Physician on Fire: Physician On FIRE is a blog dedicated to the discussion of issues pertaining to personal finance, early retirement, medicine, and miscellany.
White Coat Investor: Jim is a physician who certainly writes about issues specific to medical professionals, but also offers great advice for everyone and has created some great resources.
Abnormal Returns: Tadas is a prolific aggregator of great financial content on the web, linking daily to helpful and intriguing content about all things financial.
Oblivious Investor: Mike is a CPA and author of several investment books. He has especially good content around social security.
Four Pillar Freedom: Zach is a twenty-five year old data scientist who looks at finances through the lens of data. Each of his posts is categorized with one of his “four pillars”: Philosophy, Psychology, Work Ethic, and Finance.
Note: The above blogs skew white and male. I’ve listed them individually anyway because they were the ones that influenced me the most and that I’ve read enough to recommend. Here is a nice list of women FI bloggers you should take a look at.
Also, if anyone knows of a good resource for more racially/ethnically diverse bloggers, please let me know and I’ll add it.
Rich and Regular: Julien and Kiersten eliminated debt and are building sustainable wealth
Books That I’ve Found Helpful
The Wealthy Barber by David Chilton: This is a bit dated in terms of the financial choices available to you, but it’s a great first book and easy read as an introduction to financial decision making.
The Simple Path to Wealth by JL Collins: Another great introduction, with especially good content around choosing your investments.
The Little Book of Common Sense Investing by John (Jack) Bogle: Written by the inventor of index funds and the founder of Vanguard, it really is a “common sense” book on investing.
Enough: True Measures of Money, Business and Life by John (Jack) Bogle: Discusses what it means to have “enough” in today’s world.
Unconventional Success: A Fundamental Approach to Personal Investment by David Swensen: Swensen is famous for leading the Yale Endowment to amazing returns. In this book, he discusses how he thinks individuals should invest.
Work Optional: Retire Early the Non-Penny-Pinching Way by Tanja Hester: Tanja writes the popular Our Next Life blog, and this book sums up what she has learned about achieving FIRE.
The Truth About Money by Ric Edelman: Founder of a very successful financial advisement firm, Edelman talks about all things money.
The Truth About Retirement Plans and IRAs by Ric Edelman: Another by Edelman, looking at IRAs, 401k’s, etc.
The Retirement Savings Time Bomb by Ed Slott: Ignore the hyperbole in the title, Slott is a successful financial advisor who has appeared multiple times on PBS. In this book, he gives good advice on how to invest and manage your retirement savings.
Your Money and Your Brain by Jason Zweig: A long-time financial writer currently at the Wall Street Journal, Zweig looks at the behavioral side of investing.
The Millionaire Next Door by Stanley and Danko: Presents the results of research that shows that many folks who you wouldn’t think are “rich”, actually are, and what they did to get that way.
Your Money or Your Life by Vicki Robin and Joe Dominguez: This is the book that some say launched the FIRE movement
Nudge by Thaler and Sunstein: Not specifically about personal finances, but looks at how small “nudges” can impact decision making.
Predictably Irrational by Dan Ariely: Another book on decision making, and how we often sabotage ourselves.
The Bogleheads Guide to the Three-Fund Portfolio by Taylor Larimore: Summarizes how the Bogleheads community uses just three total market index funds for their investment portfolio.
Finding Finance: “Students are going to be making significant financial decisions even before they graduate from high school and some of these decisions can have long lasting life impact on them and I think we’re doing them a disservice if we’re not giving them the tools now to make those decisions.”
Get Serious, Get Smart, Get Educated: The head of Personal Investing at Fidelity talks about the importance of financial literacy, especially for women. “The problem is, you can’t delegate your future.”
One Life-Changing Class You Never Took: “In America right now the average person makes approximately six to ten money decisions every single day…money will affect us every single day of our lives until the day we die and I wish that weren’t true but it’s a fact…when I think about money I think it’s not important to be rich – it’s not about being rich, it’s about being able to live your richest life.”
You’re Screwed If You Don’t Understand Personal Finance: Four Pillar Freedom lays out the case for educating yourself about personal finance.
How to Be Happy, Rich and Save the World: Mr. Money Mustache lays out some philosophy in a short post and a 28 minute presentation at the World Domination Summit (yes, that’s a real thing).
Choose FI: A Life Optimization Strategy: From Choose FI, this talks about their view of why you would learn more about this.
Welcome to the FI Community: 49 minutes podcast from Choose FI that explains what FI is.
Choose FI: A Beginners Guide: Just what it says.
Optimizing Your Journey to FI: Brandon The Mad Fientist talks about his approach.
Our Full Financial Plan and Philosophy: Tanja from Our Next Life talks with Brandon the Mad Fientist.
What’s Our Money Really For: Tanja talks about how pursuing FI is not really about money.
Why You Need F-u Money: JL Collins talks about how being FI is really about freedom.
How To Optimize Your Journey to Financial Independence: From Mad Fientist
Two Fun Tools From The MMM Software Department: From Mr. Money Mustache (see also The Shockingly Simply Math Behind Early Retirement)
Can Money Buy Happiness?: From The Guardian, “If poverty makes us miserable, it stands to reason that wealth makes life worth living. But does it? Psychologists aren’t so sure.
Why (Prudent) Spending Rates Matter More Than Savings Rates: Financial Planner and Blogger Michael Kitces writes about focusing on what you can control – spending rates – is key.
How We Save 65% Annually: Mrs. Frugalwoods describes in detail how they save 65% of their income.
Frugality as a Muscle: Mr. Money Mustache doesn’t pull any punches (he never does) as he talks about the fact that he focus on living the life he wants to live, not really on the frugality.
The Shockingly Simple Math Behind Early Retirement: Mr. Money Mustache shows how long you have to work in order to be able to retire using different savings rates.
Enough by John (Jack) Bogle: Jack Bogle gives a book-length treatment to the idea of what is “enough” and what you should really value.
What Does It Really Mean To Live Within Your Means?: Another great post from Michael Kitces looking at earning, spending, and saving.
A Letter to Anyone Who Wants More Than They Have Right Now: Trent at The Simple Dollar talks about being thankful for what you have.
How Americans Make and Spend Their Money: An interesting article from The Visual Capitalist that breaks down the categories that Americans typically spend their money on.
Americans Spend More Money on NCAA Tournament Betting Than on Presidential Elections. By a lot. : From the Washington Post, this isn’t perhaps helpful to you personally, but does provide some context around what the “collective we” find important to spend money on.
Ally Bank: A great online-only bank that has no-fee checking and savings with competitive interest rates.
Best Bank Account Bonuses: Doctor of Credit keeps an updated list of bonuses you can get from opening bank accounts.
The Ultimate Guide to Bank Account Bonuses: Kevin at Financial Panther does his usual excellent job of laying out step-by-step directions, in this case for getting bank account bonuses.
Financial Panther Resources: Kevin’s page listing his recommendations, which includes checking and savings accounts recommendations.
Why 2.5 billion heartbeats might change the way you think about money: Preet Banerjee at TEDxUTSC: Borrowing money today is negotiating a pay cut with your future self.
When Is It Safe to Close a Credit Card? John at The Simple Dollar answers a common question.
What’s In My Wallet? Kevin at Financial Panther lists the credit cards he currently has.
An Amateur Travel Hacker’s First Experience with Travel Hacking: Kevin at Financial Panther dips his toes into travel hacking with credit cards.
Credit Cards: Evil or Good? Some guy named Karl wrote a post a while back.
Best Credit Cards: A website that lists their opinion of the best current credit cards for different purposes.
Choose FI Travel Rewards: An in-depth look at travel hacking.
Mad Fientist’s Travel Hacking Articles: Brandon’s list of all the articles he’s written about travel hacking.
Travel Hacking Hawaii: How I Booked Four Flights to Maui for $45: The title pretty much says it.
Credit Card Benefits You Never Knew About: Ben Carlson reminds us about many of the “benefits” that come with credit card purchases that many of us are unaware of and/or don’t take advantage of.
If You Nail Your Housing Expenses, You Can Mess Up in a Lot of Other Areas: Zach at Four Pillar Freedom looks at the data.
Home Sweet Home: Jeremy at Go Curry Cracker explores the criteria he looks at for choosing where to rest your head at night.
Rent vs. Buy Calculator: NerdWallet’s version
How To Get The Best Car Insurance Deal: Advice from a 30-year veteran of the insurance industry.
You Don’t Need Earnings to Contribute to an HSA: From Kiplinger
Five Steps to Investing Your Health Savings Account: From Morningstar
How a High-Deductible Health Care Plan Can Boost Your Retirement Savings: From Market Watch
Getting Real About Health Care Cost in Retirement: Michael Kitces talks about the nuances of how health care costs arise and need to be paid in retirement.
Debunking the Myths of Whole Life Insurance: The White Coat Investor lays out the case for why Term Life Insurance is the way to go.
Important: Tax laws are always changing, so some of these posts could be outdated.
Go Curry Cracker has multiple posts on tax planning and optimization
Mad Fientist also has a plethora of posts on tax planning and optimization
$150,000 Income, $150 Income Tax: Root of Good shows how they minimize their taxes (legally).
The Unfair (FI) Advantage of Teachers: The Choose FI podcast interviews Millionaire Educator who describes how educators have a secret weapon to minimize their taxes and maximize their retirement savings.
My Trillionaire Plan: A somewhat facetious, but also really thoughtful, post from Millionaire Educator
Tax-Efficient Spending Strategies from Retirement Portfolios: Michael Kitces
Using Systemic Partial Roth IRA Conversions to Fill the Lower Tax Bracket Buckets: Michael Kitces discusses how to optimize the tax code when doing Roth IRA conversions.
Roth Conversion Ladders: From JL Collins and Mad Fientist
Six Rules for Tax-Free Roth IRA Distributions: A nice, short summary of the rules around Roth IRA Distributions.
Mechanics of the 0% Long-Term Capital Gains Tax Rate: Michael Kitces with his usual deep-dive on this topic
State Taxes for Jailbroken Living: This post looks at the various tax considerations involved in where you live during retirement.
State by State Guide to Taxes on Retirees: From Kiplinger
Why I Report My Daughter’s Babysitting Income to the IRS: The first article I read about the huge opportunity a Roth IRA provides for high school and college students (basically, anyone making little enough not to owe any federal taxes).
Student Loan Tax Deductions and Tax Credits: A look at how to maximize the deductions and credits available to you for spending on college.
FI for Colorado Teachers Part 4: Tax Optimization: I look a bit at taxes for Colorado teachers.
Section 125 Plans: I look at this often easy, but overlooked, way to lower your taxes.
Working Teens and Roth IRAs: I take a look at why your teenager should open a Roth IRA as soon as they get a job, even if you are the one actually providing the money for the Roth.
Stocks Part XXIII: Selecting Your Asset Allocation: From JL Collins
What We Own and Why We Own It: 2018: from JL Collins
The GCC 2019 Asset Allocation: from Go Curry Cracker
How To Be A Do-It-Yourself Investor: The White Coat Investor shows that it’s really not all that hard.
How the Bogle Model Beats the Yale Model: Ben at A Wealth of Common Sense looks at the Vanguard 3-Fund Portfolio
The Simple Three Fund Portfolio at Vanguard: From Minafi
The Cheapest Portfolios in the World: From Meb Faber
What Does Financial Panther Invest In?: Discusses his portfolio and thinking.
How to Make Money in the Stock Market: Mr. Money Mustache
Passive Investing Demonized: Larry Swedroe discusses how index funds are getting attacked by those who stand to lose out if you invest in them.
Stocks Part VIII: The 401k, 403b, TSP, IRA and Roth Buckets: From JL Collins (see also his entire stock series and his book)
First Principles Thinking: Should You Invest in a 401k?: Four Pillar Freedom takes a close look.
First Job Out of College? How To Get An Easy A on your 401k: From Vanguard
Your 401k Could Be A Gold Mine If You Do These Two Simple Things: MarketWatch advises you to participate (early and as much as possible) and choose cheap funds (i.e., index funds if possible).
How Much Is Too Much In Your 401k? From Mr. Money Mustache
Savingforcollege.com: The go-to resources for 529 plans.
Stocks Part XXIX: How to Save Money for College. Or Not. From JL Collins (see also The College Conundrum)
Student Loan Tax Deductions and Tax Credits: A look at various tax matters related to paying for college.
Saving for College: 529 Plans: I write about this, with a specific focus on Colorado.
A series of posts/podcasts from ChooseFI on college hacking
Free Ivy League Degree: From Mad Fientist
Also look at the links in the Insurance section above.
Section 125 Plans: I write a bit about the incredible advantages of using your employer’s Section 125 plan.
Working Teens and Roth IRAs: I write about how all working teenagers (and even into their early 20s) should invest in a Roth IRA if they aren’t helping support their family.
The Ultimate Guide to Safe Withdrawal Rates: A 31(!) part series from Early Retirement Now for a deep dive into safe withdrawal rates
The 4% Rule: The Easy Answer for How Much I Need to Save for Retirement: From Mr. Money Mustache
Safe Withdrawal Rate For Early Retirees: From Mad Fientist
What Returns Are Safe Withdrawal Rates Really Based On? From Michael Kitces
Understanding Sequence of Return Risk and The Extraordinary Upside Potential of Sequence of Return Risk in Retirement: Both from Michael Kitces
What Everybody is Getting Wrong About FIRE: From Mr. Money Mustache
Multiple posts from Tanja at Our Next Life about FIRE
Financial Independence for Normal People: The Wealthy Accountant with a nice overview post.
Seven posts I wrote on FIRE for Colorado educators
Please take a look at some or all of the links above, start reading some of the blogs that are linked at the top, and buy (or check out from the library) some of the books listed above. Future you will thank you.
Have a question?