The One-Page Financial Plan Book Review and Giveaway

Feeling tormented by your finances? Read this book folks.

“The fact is, in a single page you can prioritize what you really want in life and figure out how to get there.”– Carl Richards, author, The One-Page Financial Plan.

I liked Carl’s book for many reasons and today’s blogpost will share some of my favourite quotes, takeaways and provide you with an overview of what you’ll read about in The One-Page Financial Plan.  After a few hundred words I’ll give you a chance to win a copy of this book, autographed by the author.

“One thing you won’t find in this book is a silver bullet investment strategy.”

I think we should hear this more from the investment industry and those that write about it.  Experts arguing over dividend investing versus indexing versus value investing and so it goes on.  It’s really not that important.  This is because there is no perfect portfolio for everyone although there are some good financial rules of thumb to follow:  pay yourself first and often, diversify, keep your investment costs low and stay invested for the long-run.  That’s the premise of every saving and investing book ever written but there’s more to this latest Carl Richard’s book.

Chapter 1 – The Most Important Money Question

If you can answer this fundamental question you’re probably ahead of most:  why is money important to you?  Consider answering this question yourself, now or after you read Carl’s book.  You might find the answer revealing because…

Before you can plan, you have to know why you’re planning.”

Chapter 2 – Guess Where You Want To Go

“As scary as “I don’t know” sounds, I’ve found that there is a tremendous sense of freedom that comes with recognizing that we just don’t know what the future will look like.”

Chapter 3 – Get Really Clear About Your Current Location

“This process is going to involve getting up close and personal with some of your baggage – but that doesn’t mean you need to figure out a way to fix everything right now.”  Carl Richards shares his own experiences in this chapter, the gloomy day in Las Vegas where he not only turned in his car but he also came to terms he was going to lose his house.

Chapter 4 – Budgeting As A Tool For Awareness

“Budgeting is important not only because it reminds us not to spend so much on gasoline or takeout, but also because it helps us cultivate the awareness we need to save and spend in accordance with our values.”  This is where I feel I’ve made advances in my life over the years, I tend to spend money on the things that are important to me not what others or society feels I should spend my money on.

Chapter 5 – Save As Much As You Reasonably Can

In this chapter, Richards is quick to point out “as much as you reasonably can” is a personal savings rate but if you’re armed with knowledge from the previous chapters you’ll know what to do.  Also, when in doubt when it comes to spending money, Richards suggests following a 72-Hour Test for any impulse purchases.  This way you can sleep on the idea, for a few nights in fact, to ensure you’re not giving into instant gratification.

Chapter 6 – Buy Just Enough Insurance – Today

“I know this may be hard to accept, but for most of us life insurance plays one role: it replaces an economic loss.”  A friend of mine Glenn Cooke has also written about life insurance this way and although I believe you cannot replace an emotional loss, at least you can recover financially with the right life insurance products that match your needs.

Chapter 7 – Remember that paying off debt can be a great investment

“I have, on the other hand, met a lot of people who’ve felt the elation that comes from paying down their mortgages.  I’ve attended mortgage-burning parties.”  Richards advocates that paying down your mortgage is one of the best investments you can make because killing debt has a guaranteed rate of return.  Investing in the stock market, at least in the short-term, only gives you the possibility of earning a better return.

Chapter 8 – Invest Like A Scientist

Richards was told by a friend who happens to be a physician if he practiced medicine the way he’d been investing, he’d kill half of the patients he provided care for. The lesson? You should never prescribe something before you know all the evidence. When it comes to investing, it’s impossible to know all the evidence.  The investor dilemma is no matter how much data you have on the past, you have no data on the future. This is why those investing tenets I wrote about above are very important:  diversifying your portfolio, keeping your investing costs low and staying the course.  Richards reminds us about another principle in this chapter, there is a correlation between risk and reward. Regarding the latter, no matter how hard investors try, you can’t separate these two; the more risk you take (stocks) the greater your potential return may be.

Chapter 9 – Hire A “Real Financial Advisor”

I suppose this book would not be complete without a plug to hire a financial advisor (like Carl Richards) but I can appreciate the role financial advisors play beyond technical expertise, they help investors from getting emotional about their investments.  This brings us to chapter 10.

Chapter 10 – Behave, For A Really Long Time

Don’t confuse simple with easy.  This applies to most things in life and investing is no exception.

Bad investing habits are just as hard to break as good habits are to keep.  Richards recommends you automate your saving and investing choices as much as possible for as long as possible. “Would you ever plant a tree and then go in every month and dig it up to see how the roots are doing?” You the know the answer…

Although the advice from The One-Page Financial Plan doesn’t really fit on one-page, you can certainly put Carl’s principles above on a rather short list.  This book is well worth the read for folks just starting their investing journey or investors needing some reminders how to stay on the path they’re on.

Want to win a copy of Carl’s book?  Of course you do!  Enter the giveaway below and I’ll draw one name at random in a few weeks.  Thanks for reading and sharing.

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22 Responses to "The One-Page Financial Plan Book Review and Giveaway"

  1. Hi Mark, I’d love to win a copy — I want to see how Carl got his plan down to just one page! (the sample plan I put up ran to the 3rd page 😉

    I will quibble a bit here: “the more risk you take (stocks) the greater your potential return will be.” — I’d say it’s the other way around: you can’t get greater potential return without taking risk, but taking more risk does not necessarily increase your potential return. There are dumb risks out there (or return-free risks), like lottery tickets or day trading.

    Reply
    1. Good points John and I updated the sentence to state “may be” since this is more aligned with my intent. There are never guarantees with investing. Yeah, The One-Page Financial Plan is really >200 pages but you get the idea 🙂 Thanks for your comment.

      Reply
  2. Yes, we just save without an actual plan, because money means security, now and later … but if you don’t look after it, that money can disappear fast with a risky investment, although the high returns from a risky investment are very tempting.

    That is why a short term and a long term plan are as important as a budget.

    Reply
  3. First time posting:) Would love to win a copy! I would also love to have a mortgage-burning party, haha. Never heard of that before

    Reply

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