17 of 17 people found the following review helpful
on June 8, 2010
Right now, books about the Great Financial Crisis are almost falling out of the trees. This one really is different. Instead of (just) building the usual case about how the investment banks and bankers are greedy, evil b*stards (thinking up hyper-complicated ways to take other people's money), Kelly hammers home (even if too close to my home, it turns out!) some simple basic truths about money and personal financial responsibility. He then returns again and again to these essential rules and shows how violating them helped to create and then amplify the mess we are still in today. The rules are "fractal" in nature: they apply to the individual consumer, and to the US government, and to every sized borrower in between. (Even though his first rule of finance is, in essence, avoid or limit having to borrow.) Very quickly, you realize that those evil greedy bankers wouldn't be so damn rich if only people would stop being so incredibly stupid, financially.
The book is a fast read that I didn't want to put down - probably because in every chapter I kept stumbling over another anecdote or scenario that seemed uncannily familiar. Between pointing out the stupid financial choices we all make, and showing just what alternative choices we can make, this book keeps you thinking "yeah, he's right", and "why didn't I think of that?". I especially like the way he skewers the political extremists on both sides of the aisle, showing how financial stupidity and lazy voter apathy may combine to extend the status quo (good for the wealthy elite, not so good for the rest of us), and magnify the messes that occur.
I say, buy it, read it and keep it handy, and you won't "be one of them"!
23 of 25 people found the following review helpful
on November 10, 2010
Kelly's book has 4 great ideas:
1. Don't spend more than 80% of your income
2. Don't carry balance on your credit card
3. Don't finance your car - pay cash for it
4. Don't put less than 20% down payment on your house
All of this is explained very clearly in Chapters 1 and 2. If you want to get the maximum benefit for the minimum amount of time, read those two chapters and skip the rest.
Chapters 3, 4, 5, and 6 tell you that big business and government work together and that they are out to screw you... as if we didn't know this. You must have the naiveté of an elementary school girl not to know about the big business lobbyist, the oil, war and health care agendas and who makes money from them, and that the whole bailout is you - the tax payer - picking up the tab for the big party Wall Street had in the last several years.
It's great to know Jason's opinion on these topics but it doesn't add much value.
Chapters 7, 8 and 9 are regurgitating Chapters 1 and 2. The last chapters don't add much else besides hype. They are like the super-excited college guys who cheer for someone else's idea.
"Hey, guys, let's get some beer and get drunk", someone says.
The guy cheerleaders then start hyping up: "yeah, man, let's get some beer, let's get crunk, let's get some beer, it's gonna be wild, yeah man, let's go for it, it's gonna be amazing, I'm getting drunk just thinking about it!". Lots of hype but no action.
I understand Jason's challenge - how do you write a whole book of 150+ pages on 4 very simple and practical ideas? The answer is layout the ideas and then fill the rest with fluff. Otherwise, Jason had to publish a pamphlet for which people would hardly pay $20+ and no publishing company would publish.
What would make Kelly's book an excellent one is:
1. a section on how to get out of debt once you are debt ridden
2. a section on what to do after - you've got your savings in order and then what? Jason has written several books on investing - he has the expertise to talk about the subject.
3. a section on how to get more value out of your money. Jason lives in rural Japan. Is this just because he likes it or is it because his money last him longer there? Many people move to other countries when they retire because their money have more value there. Japan is not one of those countries but who knows...
This book has a great potential to be a 5-star masterpiece. I hope there is a revised edition coming with more practical and relevant information.
9 of 9 people found the following review helpful
on June 9, 2010
Solid common-sense approach to financial freedom - and it doesn't require a $$ investment in any program or financial consultant. You are only going to invest in yourself and reap the benefits. Also, do yourself a favor and sign up for the author's newsletter.
6 of 6 people found the following review helpful
on September 14, 2010
I am an avid reader of Jason Kelly. His financial writing abilities are unique in the sense that he breaks down complicated topics for driven and motivated individuals; I often describe his books to my friends as "an `Idiot's Guide' for non-idiots." I have emailed him with financial questions of my own, and he responds as if I'm his only reader. I would highly recommend his Kelly Letter to anyone who gets this book (and no, I was not paid to say that.)
Therefore, I was extremely excited about this new book. After finally being able to grab some time, I sat down and finished within two days. Amazingly simple to read, understand, and recommend. The first sentence of the book is the most important, cutting right to the point. And his references are colorful and magnetic, just like this comparison of a credit card to a noose: "It's [the credit card company's] own fault for creating a system based on the principle of providing enough rope for people to hang themselves. If you use the rope for something other than tying a noose around your neck, it's a good free rope."
However, Jason's book is similar to a cliché job performance review: start out by highlighting separating strengths, point out weaknesses and how they are dragging down performance, and end with another strong quality. The first 4 chapters (chapter 1 especially) of this book should be memorized by every American, and the final chapters encourage you and give you the tools to capture your own financial freedom.
But the middle (chapters 5 and 6, which comprise nearly half of the entire book, and hogged about 80% of my reading time) should be questioned. Jason dives deeply into his personal opinions, albeit admirably bipartisan, about American government. If you truly are not a "financially stupid person", these chapters will feel somewhat disjointed. It seems as if he expects every reader to follow down his well trodden path like zombies. His main point is that the government and corporations are "in bed together" and that basically every financial move the government and/or corporations make is a) for financial gain and b) ignoring citizens' best interests. His perpetual interjections that the lowly taxpayers bailed every Wall Street "bad guy" out would have a novice convinced that the money used simply vanished into thin air, or was spent on a plush vacation for every CEO. It's the same feeling that made me want to attend an NRA campaign rally in Alabama after watching any Michael Moore film. Some facts: more than half of the $400 billion injected by the Treasury has been repaid, some at astronomical interest rates, and the Government's equity stakes in the various companies it "rescued" could pay off handsomely. I won't go into too much detail, because I want every reader to have their own opinion. But at some points it seems like every employee of Goldman Sachs stole Jason Kelly's lunch money in grade school. These chapters should still be read, but simply keep in mind how the opposition might retort.
The book ends nicely tied to the beginning, however. It truly is sad to see so much financial stupidity in the world, highlighted by our own Government's massive debt. I now laugh at every expensive car I see on the street, wondering how much debt they amassed trying to impress their friends. And I've never been so confident to listen to my iPod while it is only 1/3 charged (read the book to understand...)
9 of 10 people found the following review helpful
on June 22, 2010
Just finished reading "Financially stupid people..." - what a great, refreshing book. I appreciate the simple advice on investing 20% of your income and all the other points in the first and last chapters. But more importantly, I really enjoyed the middle part on how the American politics & economy work. Frankly, it reads like a very entertaining thriller; I was sucked into the different stories and couldn't put the book down.
2 of 2 people found the following review helpful
on September 10, 2011
I am not compensated by the author for writing this book review, I choose not to have conflicts of interest associated with my writings. -- Romeo
I started reading Jason Kelly's, Financially Stupid People Are Everywhere: Don't Be One Of Them, and was immediately captured in his introduction. This book was actually released early in June 2010. He creates a great basis for his title by suggesting that while financial institutions are "bastards", it is us who are "victims" to these institutions. However, he makes sure that we understand that the "modern day victim" is nothing like the previous generation's victim. He puts it simple:
Too many of today's 'downtrodden' live in modern-day castles, wear designer clothes, drive opulent vehicles, eat in fine restaurants, take vacations, showcase 'bling-bling' jewelry, and watch big-screen televisions.
To conclude his introduction, he informs us that "Financially stupid peoople are America's most toxic asset."
Chapter 1 - The First Rule of Finance
Here, Jason Kelly emphasizes a fundamental but most important rule in personal finance- Live within your means. He suggest that we should spend no more than 80% of our pay. Though he does not say specifically what to do with the remaining 20%, the inference is that it should be saved. By spending no more than 80%, Jason is certain about one thing,
If you don't spend more than 80 percent of your income, you won't get into trouble.
He ends that chapter with another important concept: first save, then buy. In other words, instead of buying things impulsively, we should figure out the total cost of the object, break it down over the number of months that we want to save, and then save that amount until we can purchase the object in full. This way, instead of paying an institution interest, we'll keep it in our own pockets.
Chapter 2 - Credit, Cars, and Castles
Jason explains how the three C's can eventually ruin one's financial life and he maintains that we should not spend more than 80% of our take-home pay. It is here where he suggest that the extra 20% of our take-home pay should go towards savings to purchase cars for cash or to accumulate a 20% down payment for our castles. So in summary, he focuses on three rules: Don't ever carry a credit card balance, Don't finance our vehicles, and pay no more than 1/5 th of our take-home pay if renting and no more than 30% if buying a home.
On a side note, I was disappointed that he did not suggest to purchase no more than a 15 year fixed rate mortgage but suggests a 30 year fixed payment with a 20% down payment. It is inferred that as long as we are not paying more than 30% of our take-home pay on housing, we'll be okay. But, hopefully we've all learned that even a 20% down payment with a 30yr fixed rate mortage might not be enough to maintain equity if our home values drop--I will always maintain the no more than a 15 yr fixed rate rule.
Chapter 3 - Toxic FSP in the Alphabet of Idiocy
This chapter does a great job discussing the history of how we had gotten ourselves in the mortgage collaspe that we are still recovering from. Jason claims that it all stemmed from products that no one, including the banks, thought would go belly up such as collaterized debt obligations (CDOs), credit default swaps (CDS), mortgage-backed securities (MBS), and structured investment vehicles (SIVs). Most of all, the key ingredient he states, were the financially stupid people (FSP) who took on the mortages that fueled these products. Although this chapter is a bit technical, Jason does a great job giving examples to dummy it down for the average reader.
Chapter 4 - The Society You're Up Against
To sum up this chapter, Jason claims (and I don't disagree) that the american economy is a fraud. The economy is based on enticing people to work and spend so that taxes can be collected, and it is based on borrowing that makes the banks richer. Towards the end, Jason summarizes the history and the agenda of the Federal Reserve System -- to give power to the bankers.
Although I thought that the chaper distracted from the book's title, it is needed to set the framework for the rest of the book: that no one cares more about us than ourselves.
Chapter 5 - Government of the Corportations, by the Corporations, for the Corporations
Jason gets way off topic here if we were to consider his book to be one about personal finance. He pretty much leaves us hating the government, but does so by using effective and mind-boggling examples of why we should. He summarizes how many high ranking government officials are linked to their prior place of civilian employment, which in all honesty should create a conflict of interest and not be allowed. Also, he clues us in to how lobbyist are a work of art that are paid millions to shift the law to their favor.
Chapter 6 - How Money is Power
Once again, the book is pure political at this point, summarizing how lobbyist that are paid by private corporations spends millions of dollars to keep America spending money on privatized health care options, oil, and military weaponry and systems. But, Jason writes his points well. I got pretty bored at times, being that I'm more interested in reading about personal finance than politics, but he does close the chapter by summarizing that we have to take care of ourselves before we can rely on the government. In fact, he closes with a powerful point,
We need to fix ourselves individually in order to fix the nation collectively.
Chapter 7 - Financial Freedom
Jason finally gets back to talking exclusively personal finance. He draws a nice picture by telling us that out of the money that we earn, we really only have about 1/3 of it to work with. The other 2/3 is taken by taxes and "required" spending such as car insurance, college, and health care. Next he focuses on the fact that no matter how much money we earn, it is up to us to spend it smartly.
Chapter 8 - Guarantee Your Own Well-Being
Jason does a great job at bringing together his book. He focuses on his "golden rules" again: spend no more than 80 percent of your take-home pay, never carry a credit card balance, don't finance your cars, and put at least 20 percent down on your home. He focuses on an inspiring tale that summarizes these rules and infers that these rules should be the focus on personal finance, not investing in the stock market--and I definitely agree. Jason outright tells us:
"...if you don't have control of your finances before striking rich on some investment, what makes you think you will afterwards? No matter how much money you make, if you manage it badly, it will disappear."
This chapter pretty much ends the book, but does it well, and should at least leave us to think about living by his four "golden rules."
Chapter 9 - On the Front Lines of Freedom
Jason leaves us with various stories from his readers. Some are inspiring, others I could have done without, such as the couple who although saved money by purchasing their cars used, still paid $14K and $27K between the both of them and financed a home with a 30 year mortgage.
All in all, the book is definitely worth the read. It is not necessarily a book that teaches and focuses solely on personal finance, but it can leave the reader with a sour taste for the government and big corporations, which should make the reader want to fight back.
Review provided by, Romeo J. Clayton
How We Prevent Wealth
2 of 2 people found the following review helpful
on July 30, 2010
I've read a host of books on various aspects of trading and investment, but never one that describes with such clarity the financial traps set for the modern-day consumer and how to avoid getting sucked in by them. This book is, as Jason Kelly says, "a smack upside the head" aimed at getting people to think straight about how the financial system is rigged to pick their wallets/purses.
Jason neatly ties together the big picture of the subprime mortgages and credit derivatives that were ticking financial time bombs with the smaller picture of conspicuous consumption and overextended credit cards. In the same way that debt can ruin an individual's life, it can ruin the health and wealth of an entire nation.
A lot of what Jason talks about is simply common sense: e.g., why risk your investment dollars stretching after 10% returns in the stock market at the same time you're paying 18% interest on your credit card balance? Pay off the credit card, and you'll be way ahead. While I don't subscribe to Jason's (tongue in cheek?) suggestion that credit cards should be outlawed, he makes a good point about how they cater to our worst "own now, pay later" instincts.
Jason is a man on a mission, but it's a mission he's having fun with. You'll find yourself entertained, and your bank account will thank you.
2 of 2 people found the following review helpful
on July 18, 2010
I am trying to get my financial act together, bit by bit, and read various articles, magazines and books from time to time for glimmers of assistance. I usually get through a few pages of those books and then have to recover from the brain fog they put me into. Financially Stupid People on the other hand was more like a thriller novel. Unputdownable! I can see where some people might at times find it to be IN YOUR FACE RUDE but that's not really how it hit me. For me it comes across as Horrifying, Shocking, Enlightening, Inspiring, and best of all, Immensely Entertaining. Financially Stupid People nails the subject and explains exactly, with kindergarden directness and simplicity, what has happened in the economy and why, and what ANYBODY can do to create financial freedom for themselves. Clearly I'm impressed and consequently going through my financial matters with a fine tooth comb to make as many of the necessary changes as possible to come up smiling. Congratulations on an awesome book. I hope it becomes a best seller many times over.
2 of 2 people found the following review helpful
on November 22, 2010
I found the book very interesting and buzzed through it in a couple of days. I can't say that it changed my paradigm of things financial but it did indeed awaken me from my slumber. I'm financially secure but have from time to time played into the hands of materialism--carrying more debt than I should have. Mr. Kelly reminds us all NOT to take our eye off the ball lest we fall back into that same trap. The price of the book will save me much more than it cost to purchase it. I also found it interesting the way he shows how corporations and banks conspire to take our wealth. He has also caused me to take a "relook" at the capitalist system we have in the US. I think the author explained the complex entanglements of derivatives into a simple and understandable language we can all understand. I would agree with the author that the lessons contained in this book need to be taught in high school. Were it thus so there would be far fewer financially stupid people in our midst.
2 of 2 people found the following review helpful
on July 27, 2010
As an avid reader of finance gurus such as Ric Edelman & Dave Ramsey among others, it was great to read from a "new face on the block". And boy am I glad I did. Jason not only lays out a clear, concise and easy plan to financial freedom (I mean you can't get any easier than 1 rule & three "C's" people) but even better still, he explains quite clearly how our whole free-market society is stuctured to enslave is into a life of debt; That is unless you take control of what is yours to control. But don't misunderstand the author's message. He's not spewing from the typical "left wing / right wing", capitalism vs socialism soap box others would preach from. He's just telling us like it is. A really enjoyable read!