on January 26, 2014
First, I read this book as part of the 12 Books Group, the largest and only author-led business book group in the world. I have to admit, I was less than excited initially by the choice of the book selected this month but to my surprise, I not only thoroughly enjoyed it but also I would HIGHLY recommend it. Personally, I have grown weary of the financial talking heads on TV that spout so much financial-babble that is either not at all applicable to most American's real life situations or, even worse, their positions almost seem at odds with what really matters to our daily lives. I am afraid that at this point in my life I have assumed more of a populist outlook on financial matters. Having said that, in endorsing this book I much state that I am not calling it's author, Carly Richards a populist in his viewpoints, but rather that his simple, no nonsense, stick to the basics approach makes incredible sense and I only wish that I would have read it thirty years ago than now.
There is something for each of us in Carl Richard's writings. His "slow and steady capital" approach, had it been adopted by more Americans, would probably have have saved MANY 'consumers' (I am not sure that this is one of his his favorite descriptives)from so much of the pain of the last six or seven years.
While filled with sound advice throughout, my favorite chapters were four, nine and ten, titled Life Planning (as opposed to Financial Planning) When We Talk About Money (this should be a part of all couples pre-marriage counseling), and Simple. Not Easy, respectively.
Everyone will get something different from Carl's work here but I strongly recommend his book. Whether you are at the front end of the accumulation phase, somewhere in the middle trying to juggle the myriad of financial choices and decisions that you must make, or already in the distribution phase, you WILL find something of value for you here. That is UNLESS you are chasing that proverbial pot at the end of a the magic rainbow. Then you may only find frustration.
on January 15, 2014
The Behavior Gap, by Carl Richards, is summed up nicely on page 26, "In the end, our own behavior is all that we can control - and ultimately, our behavior can make a huge difference in our financial success and our personal happiness.". This is the behavior gap, essentially the difference between what we know we should do and what we end up doing.
The book of course does have lots of financial examples, as Edwards has lots of napkin-drawn illustrations throughout the book, which are simple yet very effective in proving his point. When the book really hits its stride though is in chapter 4, as he replaces financial planning with life planning. Here is the book at it's crux, as looking for financial success is reframed into looking for personal and happiness success. On page 62 he writes, 'I try to remember what makes me really happy...when I use that goal as my baseline, it becomes a lot easier to focus on the things that really matter.". He throws out some interesting statistics about how much happiness money really can buy - or perhaps that money can only buy so much happiness, but it is clear this is how we should re-think the role money plays in our lives.
To be clear, it is still absolutely a book about financial planning and personal finance, just not in the way you might think. He makes some strong points about not just "believing" you will win the lottery and spending your money that way. He will however force you to at least reconsider what you are spending your money on, how you are investing (or not investing), and what that truly does say about your life. In one part, he goes on about how buying the next magazine or following The Economist's picks is probably one of the worst ideas, ironically of course as i'm sure many people picked up the book hoping for their next big financial nugget!
The book had the right amount of personal stories for clarity, without feeling like the author had everything figured out and you couldn't relate. My only critique would also be more of a personal one. In my own life, I feel I am at a healthy stage in how I view money, ask questions about money, and early on in our marriage we learned the hard way how to talk about money. I wonder, if I hadn't, how would I feel about this book? Would I be afraid to read more of it? Would I get sweaty as I felt convicted to stop buying $100 of lottery tickets a month? Not sure.
In conclusion this is a book I would highly recommend to anyone, whether just starting out in their career, their marriage, or even someone now successful in their career making a lot of money. He sums it up on page 146 "So beware of making decisions for purely financial reasons. Instead, make decisions that square with your notions of virtue, wisdom, and common sense.". Reading this book probably won't change your life, but I would challenge that you read it if it didn't cause you to stop and think about at least ways where your money spending didn't match your real values. Time to adjust your behavior and close that gap.
1 of 1 people found the following review helpful
on May 31, 2013
I was fortunate enough to attend an event this year where Carl was speaking. I enjoyed the presentation and immediately read the book and told numerous friends and colleagues. I am buying more copies for the office. Highly recommended.
1 of 1 people found the following review helpful
on January 6, 2015
I worked as a trader for 19 years and on sales for 7 more. Funny to remember the mistakes we all did throughout time giving in to passions and fears. This book was a fun reminder to look for the longer term objective each one of us has.
14 of 21 people found the following review helpful
on January 15, 2012
This is the best personal finance book I have ever read, The Venn diagrams are especially helpful. Other good books include:
Ramit Sethi - I will teach you to be rich
William Bernstein - The Four Pillars of Investing: Lessons for Building a Winning Portfolio
William Bernstein - The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk
John C. Bogle - Common Sense on Mutual Funds
Benjamin Graham - The Intelligent Investor
Burton G. Malkiel - A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing
Peter L. Bernstein - Against the Gods: The Remarkable Story of Risk
James Grant - Money of the Mind
Alan Beattie - False Economy
Benoit Mandelbrot - Misbehavior of Markets (the first few chapters needed an editor, but the last ¾ of the book is phenomenal - risk is NOT distributed in a Gaussian manner)
Nassim Nicholas Taleb - Black Swan
Nassim Nicholas Taleb - Fooled by Randomness
Michael Lewis - Liar's Poker
James Grant - Trouble With Prosperity
William Poundstone - Fortune's Formula
Daniel Ariely - Predictably Irrational
Daniel Ariely - Upside of Irrationality
on January 31, 2014
Carl’s best selling book is about making smart and rational decisions about money. The principles of removing emotions from important decisions does apply beyond just financial decisions.
As an example we all know that we should buy investments low and sell high but most people do the opposite. When the market is strong people think it’s a good time to buy. When it tanks fear tells us to sell. It’s not that we are stupid, as Carl says, we are just built to avoid pain even when it’s not rational.
Carl teaches that we all are motivated by fear and greed. Most of us are motivated by both but generally lean toward one or the other. This is why so many financial planners have their clients take some sort of test to judge their tolerance of risk.
The online conversation in my book group was interesting as it turned to a chat about the various life arenas where it is difficult to make logical and rational decisions in the face of great emotion. Thinking of the various decisions in our careers, business, relationship, shopping, and the way we spend our time.
One of the other strong lessons this book cemented for me is the importance of having a third party (councilor, adviser, friend) to help us make the more difficult decisions where emotions tend to cloud our judgement.
Carl Richard’s The Behavior Gap is a great money book, whether you are a beginner or have been investing for years.
While the book covers a lot of subjects, the majority is about investing properly in the stock market. Not being a big market person myself (I only have a 401k with a target date fund) I wasn’t sure I would get much out of it, but it covers lots of other topics as well, such as talking about money with your significant other, ignoring useless advice, and information overload. My favorite chapter, by far, was the one about money and happiness. Mr. Richard’s suggests that the best goal for your money is to use it to have great experiences with those you love. Those experiences will mean a lot more, and affect you a lot longer, than a shiny new gadget.
All of the advice in the book is easy to understand, and very honest. Mr. Richard’s admits that when it comes to money, our lives, and the markets, nobody knows what will happen, not even him. He suggests we make plans and then learn to alter our course as we work towards our goal, ignore the masses, and take the slow and steady route. Throughout the book are many effective and simple graphs and diagrams.
All in all… a wonderful money resource that will make you rethink all that you think you know.
on January 19, 2014
As a matter of disclosure I received this book as part of the 12 Books group with the expectation that I would participate in the discussion on Goodreads and post a review on that site, Amazon and my blog.
I found author Carl Richards book to be an easy to read and insightful. The chapters are concise and do not drift in to overkill on any of the subjects he discusses. The premise for the book is about being smarter with your money, but I found that it also translates into making useful life decisions. This actually resonated more with me as I am older and have followed a conservative investment strategy of being in it for the long haul rather than trying to guess what is going to happen in the market and taking a bath as a result.
In addition, I really enjoyed the diagrams throughout the book. Some of which were on napkins like they were developed during a conversation over drinks. The one following this paragraph was my favorite.
I strongly recommend this book, especially for those who are in the beginning stages of their life journey, to anyone who is looking for a practical guide to making better decisions regarding your financial future and life in general.
4 of 6 people found the following review helpful
on January 3, 2012
If you're already a Carl Richards fan, you know the title of my review is intended to be funny; Carl's "Behavior Gap" is all about the gap between our expectations and reality. His blog and sketches are absolutely one of my favorite finds of the past year. I really enjoy his clever approach to financial--and life--issues, using his simple sketches and wise reflections. "The Behavior Gap" is the first book I've ever purchased before its release. Having received it this morning, I've already torn through most of it and can't wait to finish. Amazing book, gifted author.
If you are like me and have struggled with finances over most of your adult life, I highly recommend this book to you (or, at least go read his blog, for goodness sake...you'll eventually buy the book...). If you've NEVER struggled with money, buy the book anyway. It will validate what you've always known and make you feel good about your decisions!
Thanks, Carl, for sharing your talents and experience with the rest of us. Your dedication to helping others is readily apparent in all of your works.
2 of 3 people found the following review helpful
on January 3, 2012
I am a CPA as well as a wealth advisor with over thirtyfive years of experience working with clients and their money. Although Carl Richards background is somewhat different than mine, he strikes many chords that make incredible sense in "The Behavior Gap". Many of Carl's ideas are not necessarily original, yet he frames them in a simplistic, new age way that can reach both the sophisticated and unsophisticated in a fashion that makes his views seem both new and exciting. Communication is a connection between a writer and a reader; Carl has clearly mastered the art of communication with his sketches and narratives and how to present ideas so everyone at any level can gain tremendous insights in "The Behavior Gap". I have completed reading this book once, having found Carl's thoughts so riveting, I am now rereading with my own Sharpie to highlight the gems that Carl is bringing to our attention. I have already sent one copy of "The Behavior Gap" to one of my clients and plan on distributing widely to share a unique sense of what is one of the most significant investment books I have ever read.