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.
Summary
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.
Beyond the giveaway below, you can purchase Cashflow Cookbook here. Use the promo code myownadvisor and the first 50 books will get a 10% discount!
Finally, you can reach and follow Gordon via…
twitter @cashflowcookbk
facebook @cashflowcookbook
Instagram @cashflowcookbook
I hope you enjoyed my interview. Let me know your thoughts in a comment below!
Mark
My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and now investing beyond the 7-figure portfolio to start semi-retirement with. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.
This is so nice.The title alone caught my eye.
Mark, I think (although I’ve not read it yet) it would be a nudge in the right direction.
I’ve come to the realization that most, if not all of the people I talk to about FIRE, or just saving something, anything, for retirement are so stressed with the here and now, and the unrelentingly pressure to spend everything they earn, that they struggle to think about next week, let along two to four decades ahead.
I’m on the lookout for anything that can help them have a healthier financial future and all the pluses that may bring.
Bob, I have no doubt you want to help people and I think this is a good book to giveaway for folks looking at options to save more and invest more. I too, find many folks are totally “strung out” when it comes to finances. If they don’t have their debt plans under control now, they ain’t seen nothing yet with inflation going higher, aging population putting a strain on the workforce, etc.
This book might not be to everyone’s taste (pun intended), but I want to encourage family and friends to buy into the idea of becoming FI, and even FIRE, and it might just be that different from all the rest, that the message gets through.
Well, it definitely does not address FIRE. Rather, a collection of savings opportunities and why those savings could be very important (i.e., wealth-builders) long term.
All the best Bob!
Mark
I think for the younger generations, it’s a very good idea to provide them with tangible tips that speak to them. Even if they pick just a few and stick to it, it’s a victory. It’s also true for more mature folks that aren’t masters at savings.
Absolutely Mary. Nobody is really an expert on all these things (as much as books or talking heads on TV would like you to believe) but I certainly believe having some self-awareness and/or financial mindfulness will take savers and investors go a LONG ways.
it sounds interesting
The problem is that many folks don’t cut back on their spending . They don’t think of the future . Some aren’t comfortable thinking about dollars and numbers. It takes tremendous discipline to achieve these goals.
I would agree Rn – saving diligently over many years, let alone decades, is not an easy feat. I struggle with it as well and could have been retired long ago if I was more frugal.
Right on Rn,
I agree. The idea of Cashflow Cookbook is to find the easy to implement ideas that involve minimal sacrifice as a way to help people get started on the road to wealth building.
There is another level that comes when people realize that having less stuff is a route to even more wealth and happiness, but I would see that as step 2!
All the best to you
My first thought is “good grief, not another financial book”.
My second thought is “good grief, not another financial book”.
Seems this might be just another “Wealthy Barber” updated to the current times.
Or I could just be grumpy because I haven’t had my morning coffee yet.
All good Lloyd. You are welcome for your opinions of course. I think for folks that don’t know where they can save money, or what choices are available to them, this book offers some options!
“for folks that don’t know where they can save money”
I’d suggest borrowing it from a library or friend then (or win it at MOA!).
Thanks Lloyd,
I agree that there are a lot of personal finance books out there and that many of them have similar content.
In fact, Rob Carrick of the Globe and Mail made the same point in his review of Cashflow Cookbook when he said “If you are going to write a book on personal finance, job one is to write something different than the hundreds of books already covering the topic. Novice author Gordon Stein aced this test”
I wrote Cashflow Cookbook to fill a need that wasn’t included in any of the books that I could find.
Most personal finance books talk about saving 10% and compounding that using investments.
But most Canadians have a hard time finding that 10% to save. This is clear when you look at the percentage of people who take advantage of RSP, RESP and TFSAs.
Cashflow Cookbook lays out 60 ideas to find savings to apply to that 10%. All easy to implement, all with minimal sacrifice.
The book is actually a good complement to the Wealthy Barber.
Thanks again for your comment
I personally enjoyed some of the saving tips. I think the big part of saving at all is the keep the discipline over time. Thanks for the comment/replies Gord.
Missed this comment, sorry. Thanks for the reply Gord. I will likely read your book as I am interested in this kind of thing. (my daughter called me obsessive). At my age it won’t make a difference in our financial situation but I’ll read it anyways. I’ll have to see if the local library has it or is going to bring it in. Push comes to shove I’ll buy it for them.
He should have stuck to the good Savings advice and not have followed the crowd by projection future earnings from ones savings/investments.
7% is an attainable goal but nothing grows in a straight line for 20 years. History shows that there have been many years of negative earnings and some for an extended periods. $40k invested each year for 20 yrs, at 7%, reaches $2Mil. But how many people will have $40k per year to invest for 20 years and on one will see 7% growth each and every yr for 20 yrs.
Fair comment I think but if you look at the TSX, annualized over the last 20 years, you’re bang on 7% return.
https://www.taxtips.ca/stocksandbonds/investmentreturns.htm
I agree though, expecting 7% every year for many years on end will not happen. The market goes up and down and up again over time.
Heck even if folks invested $6,800 in their TFSA for 40 years, they would do very well using 7%:
https://www.getsmarteraboutmoney.ca/calculators/tfsa/
You’d get:
“At the end of the investment period, your TFSA will have an estimated value of $1,452,545.07. Your savings in a non-registered plan would be $770,116.37, meaning that by using a TFSA, your tax savings will be approximately $682,428.70.” Crazy money really.
Great point cannew.
It is a virtual certainty that one will not get a 7% return in any given year on the stock market.
However, that is exactly the return that one has received, on average, over the last 40 years or so.
For many people who are carrying consumer debt, the effective rate of return is much higher than 7%.
For those who feel that 7% is not realistic, I offer a table to use different future value factors in the Utensils Section of cashflowcookbook.com.
To your last comment, the book is not at all about having $40k to invest over 20 years. It is about easy changes to make to your spending and investing those monthly changes to build wealth.
Many thanks, Gordon