Cashflow Cookbook Review and Giveaway
“Personal Finance. Budgeting. Saving. Ugh.” – Cashflow Cookbook
Yes, no doubt, the term personal finance will never scream sex appeal but it’s important stuff; knowing how to budget, how to manage debt, how to leverage the benefits of tax-free or tax-deferred investing for financial wealth, and more.
The premise of Cashflow Cookbook – $2 Million of Financial Freedom in 60 Easy Recipes is an interesting approach taken by author Gordon Stein – using ingredients, cooking, and recipes as metaphors to show you how you might amass a small fortune over time if you:
- Simmer spending
- Deglaze debt
- Noodle some net worth, and
- Toss out toxic ingredients related to your wealth building journey.
While Gord was in Ottawa this past summer, I got a chance to chat with him about his book, his background and what Canadians can do over time to cook up some healthy net worth.
Gord, what inspired you to write the book?
For many years, I have led large teams while working in sales and marketing in the high tech sector. In many conversations with staff, I have found that people struggle with money – how to get ahead, how to save, how to build wealth. Or even, how to get out of debt and stop stressing about money. I have always taken the time to help people with their finances and get them on a path to building wealth. About 3 years ago, a friend found a car wash receipt in my car and asked why I would spend money on car washes. I then got onto the idea of using an Esso Speedpass – an easier way to pay for gas, while collecting points. It was a simple tweak and saved me about $25 per month with no sacrifice whatsoever. Over the next two years I gathered the best financial savings ideas, all with minimal effort and sacrifice. I then crafted them into Cashflow Cookbook. I am now speaking on the book full time to companies looking to help their employees with financial wellness and to clients of financial advisors showing them how to free up cashflow for more investing contributions. More and more people are subscribing to my blog at CashflowCookbook.com. The book has become a regular column in the Toronto Star and is heading into its 5th printing. It is very gratifying to be able to help so many people.
Great to hear about The Star column.
There are some interesting themes in the book. Canadians should aspire to mind their housing costs since more than a quarter of the average Canadian household spends money on this item. The usual culprits are utilities, financing, insurance, furnishings, repairs and maintenance, including alarm systems. I’m curious to know what you do to save money around the house?
The focus of the book is on recurring monthly costs. I personally look at those as well.
Just about every household cost can be reduced, with minimal effort and sacrifice. Spending 30 minutes to reduce a monthly expense by $100 and investing the savings at 7% yields about $17,000 over 10 years, $52,000 over 20 years and $122,000 over 30 years. In Cashflow Cookbook we look at every type of housing expense from mortgage rates to mortgage life insurance, heating, cooling, electricity, alarm systems and numerous others.
Cars and transportation costs are another huge expense for households. I believe one of the benefits we’ll have moving back to the city is going down to one car. We expect to save ~ $300 per month in car, insurance and transportation costs. What are your greatest tips for saving money in this area?
Commuting costs can be very high and many people don’t look at what they are actually spending. It’s not unusual for a couple to be spending $500 or more per month on the costs of getting to and from work and parking. With a bit of creativity, these costs can be slashed. Moving closer to one or both jobs can help, but so can working from home one day a week, carpooling, switching to public transportation or even reducing parking costs. Cashflow Cookbook shows worked examples on all of these areas and more. And commuting costs are just one of the savings areas. In the book we look at ways to reduce every kind of transportation costs from maintenance to fuel, parking, driving style, vehicle choice and more.
Food and drinks account for ~13% of a Canadian household budget on average, maybe more depending on your own situation! Any tips you can offer to save on that?
In Cashflow Cookbook I suggest some quick wins like carrying a reusable water bottle and filling it up when you’re on the road. I mean really, why buy bottled water in Canada? We are fortunate to have some of the best tap water in the world!
Another easy one for Canadians is to avoid buying too many prepared foods. Doing so can significantly increase your grocery budget. Consider doing your own chopping, grilling and mixing to save more cash.
We’re all creatures of habit. Our lifestyles are very difficult to change. We struggle with saving and realizing our financial goals every now and then. What are some money saving tips related to lifestyle we can try out?
There are lots of tips in the book on that Mark. Here are just a few tips to consider!
- If you still love newspapers, switch to the digital versions. They can be cheaper, they arrive on-time, they reduce your environmental footprint and they never get wet on your front door!
- Here’s a radical idea for books, DVDs and more: go to your public library! They still exist!
- Cut the gym membership. By a few home gym items; start walking, running, biking for long-term health and wealth savings.
- Stop playing the lotteries. Did you know two people in a household, gambling, spending $89 per month could instead create a value of $46,369 after 20 years? It’s absolutely possible!
Finally Gord, how did you arrive at $2 million in savings on the book’s cover? I mean, that’s a huge number. Is it really possible to obtain that much wealth from just 60 financial recipes?
If my assumptions in the book are your situation, then yes, absolutely possible! I arrived at $2 million mark using the following assumptions:
- “hearty savings” – family household – assuming all money in the book was saved and invested for 20 years earning 7% per year.
- “light savings” – single individual household – assuming all the money in the book was saved and invested for 20 years earning 7% per year.
- “hearty savings” = $2,386,881 earned.
- “light savings” = $771,580 earned.
- No, these figures do not account for inflation but look, these are massive numbers!
- All of my savings recipes were back up and “taste tested” by a professional accountant.
It is important to note that the $2 million number assumes that the reader is able to apply all of the ideas to their situation to the fullest at a hearty (family) level.
I believe this book has merit for many folks struggling to find where they can save more money over time. Admittedly, you probably can’t tackle everything in this book at once but it’s worth reading to figure out where you might be able to cut back and lead a better saving and living-for-today balance.
That means while all these recipes may or may not apply to you there are many considerations in this book even for the savvy investor. As Gord mentions in his book, a “bit of creativity and the right resources can open new areas of fun, entertainment and adventure while reducing costs.”
This is what Cashflow Cookbook was designed to do.
For further information, including sending Gord some new recipes to consider for future editions you can visit his site here.
Be sure to sign up to his blog to receive new blog posts directly to your inbox.
Finally, you can reach and follow Gordon via…
I hope you enjoyed my interview. Let me know your thoughts in a comment below!