Book Summary - The Total Money Makeover - A Proven Plan for Financial Fitness - By Dave Ramsey
Bottom line - buy this book. Financial stress is the biggest threat to our nation right now. People are running scared every day as unemployment increases, the value of a dollar decreases and high paying jobs are disappearing. Dave outlines everything you need to do to go from bankruptcy to financially fit. If you have not read or heard of Dave, you will like him because he brings a southern down home common sense to his work. My grandmother was from Georgia and had a 5th grade education and she had more southern common sense than anybody I have ever met. Dave is the same way.
Book Summary - The Total Money Makeover - A Proven Plan for Financial Fitness - By Dave Ramsey
Why is this important to me? Look at this and you will see why it is critical to get a control of your money and finances. Divorce rates in this country are north of 50% and the number one cause is financial stress. Dave talks about women having a security gland and the necessity for secure finances. When the future is uncertain in terms of living, education and family, women tend to be affected more than men. This inherent difference cases stress and thus divorce. Dave discusses how to handle this a bit in this book and in much more detail in Financial Peace University. What ever happened to peoples WORD? There were 1,593,081 bankruptcy cases in 2010.
I think my grandparents are happy to be in the next world because SOME people in this country have lost their self-respect and have huge entitlement problems. I don't like making sweeping judgments and I understand that some bankruptcies are inevitable due to medical issues or trauma. I have no problem with that but there are a ton of lazy people thinking they can just wipe the slate clean and start over. Worse than that, they have done it more than once. This is like a part-time Catholic cheating on his wife but asking for forgiveness at Sunday mass each week. He figures he can just start over. This is a bad thing.
This book is packed with excellent information that if followed is designed to get you out of debt and financially fit. For the sake of time, I will highlight certain sections and the myths that Dave outlines.
1. Financial Fitness is 20% how to and 80% behavior. The concepts are really simple but it is the behavior that is hard. I can outline a diet and fitness plan for anybody in 5 minutes that will produce results. The question is will it produce results for you - i.e. will YOU do the work??????? Shocking Stat: 90% of Americans buy stuff they CAN NOT afford.
2. Emergency Fund - How many people have 3 to 6 month's worth of funds available in case of an emergency? I was really lucky to grow up with a financially astute father. I thought I was 5 years old again reading Dave's book because all the things taught in the book were taught to me at an early age. I realize that not everybody is that lucky. The horrible statistic is that most Americans are 2 weeks away from financial collapse.
3. Dave outlines a myth that is very real. They myth is that if you loan money to a friend or relative, you are helping them. In reality, if you loan them money, the relationship will be strained or destroyed. The only relationship that would be enhanced is the kind resulting from one party being the master and the other party being the servant.
4. Golden Rule: The borrower is always slave to the lender.
Dave has a mindset saying that says: You need to be Gazelle intense when it comes to your financial fitness. You need to recognize that it is your behavior and your focus that will dictate if you become financially fit. If you are in a financial mess then the "how to" steps outlined in the book - work.
1. Create an emergency fund.
2. Tackle your debt.
3. Save 15% of your money
4. Eliminate all payments
5. Give
6. Imaging a life with no payment and all income.......Victory!!!
These 6 simple steps are easy to understand but hard to follow. As you know, most people will not follow these steps. This is why people gamble, and play the lottery. One of Dave's rants which I agree with is - "The lottery is a tax on the poor and people who can't do math."
Remember - "Where focus goes, energy flows" If you are in a financial mess then I recommended that you start with this book and change your mind set to fix the problem.
To live like no one else so you can later live like no one else is a brilliant saying. This basically means that you need to be disciplined and sacrifice now to have financial freedom and security later in life. Remember that if you are nervous about your finances now, it will only get worse as you get older. Most people do not think about their health and energy until they start to lose them. If you HAVE TO work into your 70's because you don't have money then that is a horrible thing. If you work in your 70's because you love it and DON'T have to then it is a blessing. Which do you want?
I hope you have found this short video summary useful. The key to any new idea is to work it into your daily routine until it becomes habit. Habits form in as little as 21 days. One thing you can take away from this book is look in the mirror. Denial affects you like poison. If you have financial problems then admit it and make a commitment to do something about it NOW. Schedule 15 minutes every day toward your financial education to fix the problem NOW.
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