Money Management Skills

Publisher's Summary

Money management can be intimidating. Fortunately, most of us only need to know a few basic principles to get our financial houses in order. Learn these principles in this comprehensive overview of what everyday people need to know to make good financial decisions. Using a scientific, evidence-based approach, Professor Finke shows how humans are hard-wired to make emotional decisions that often run counter to the best course of action when it comes to finances - and gives tips for how to avoid these common mistakes.

The goal of money management is to maximize our happiness at every stage of our lives. Whether you are a novice investor or a seasoned pro, starting your first job or contemplating retirement, these 24 straightforward lectures are an excellent primer for making successful financial decisions at every stage of your life. Professor Finke takes you on a tour of some of the most widely available financial products and tools, from mutual funds to life insurance to college savings accounts, and he offers evidence-based guidance for building a financial strategy.

After reviewing the psychology of decision-making - and how our instincts often steer us wrong when it comes to loss aversion, risk tolerance, and information overload - Professor Finke explains the "life cycle theory" of financial planning. This eye-opening theory offers a framework for making financial decisions based on the different stages of your life, and it will give you an entirely new perspective on money management. The goal is simple: to get the most out of your money across time.

While everyone's life is different, the information and sound advice in this course will empower you to create your own financial plan to reach your goals. From setting financial goals and managing debt responsibly to investing in home ownership and preparing for retirement, Professor Finke provides a worry-free approach to handling all aspects of your financial life.

PLEASE NOTE: When you purchase this title, the accompanying reference material will be available in your Library section along with the audio.

©2014 The Teaching Company, LLC (P)2014 The Great Courses

Completely Irresponsible Advice

Would you try another book from The Great Courses and/or Professor Michael Finke?

Definitely not from Professor Finke. This is my first Great Courses book, but seeing as they produced this terrible book it really makes me think twice.

Has Money Management Skills turned you off from other books in this genre?

No, I've read many investing and money management books.

Which scene was your favorite?

none, this is terrible advice for anyone. You SHOULD NOT borrow any more than you have to when you're young, and only for things like an education.

What character would you cut from Money Management Skills?

Professor Michael Finke

Any additional comments?

The advice from this book is absolutely horrible. Please DO NOT follow his lifecycle theory. It will get you into a lot of trouble down the line. He advocates that you figure out how long you're going to live, figure out your total earnings over your lifetime, and then divide it by how long you are going to live. Then, you should live your life by spending that average amount of money you will make in your lifetime, every year. Thus, you should borrow when you're younger to get yourself to that average so you can "maximize your happiness," and only start to save once you are over your average. This is absolute garbage! How do you know how long you're going to live? How do you know how much you are going to earn? Yet he is asking the listener to somehow decide this and then take on debt early on when that later wealth may never materialize. And if it doesn't then you're saddled with debt for the rest of your life. Also, you might live longer than you planned, what then? You'll only know that at the end, and by then it's way too late. What happens when your plan inevitably goes off course? How will you predict for that? Will you have budgeted for that?

The author runs into traps that many economists are susceptible to. They oversimplify the problem, and make broad assumptions in their model to prove some wonderful theory. (Economist can prove anything so long as they are able to control for whatever variables they want.) And his model doesn't take into consideration that your costs when you're 25 may not be the same as when you're 55 with kids and a mortgage. But if you follow this model, then when you’re 55 you have to live on the same amount of money as when you were 25. Brilliant!

And then he advocates for younger people to spend more and get into debt so they can "maximize their happiness?" It's like he's advocating taking on debt and spending just for the sake of spending. Do not take on debt just because you're afraid you're not having as much fun as you could be. Not to mention that he equates happiness with spending money. Money does not buy happiness, and borrowing money just to “buy” more happiness is just ridiculous.

Basically he is advocating that you live beyond your means and trap yourself in debt early on so that you can maximize your happiness and then spend the rest of your life paying for it.

His life cycle theory is not the only thing I had a problem with. I only got part way through Chapter 5 before I had to stop. I thought I still might learn something but the more I heard, the more frustrated I got with his instruction. For anyone that doesn’t know any better, they would get themselves into a lot of trouble down the line. My concern was especially pronounced since I see so many positive reviews of this course on Audible praising his advice. In addition any of his subsequent advice is tainted since he uses his lifecycle model as an overarching framework for everything else. Much of his advice is over-simplistic or incorrect, or only applies in specific situations but he never elaborates or mentions what those specific situations might be. For example he advocates cancelling your credit cards if you just can't seem to control yourself and your spending. What he doesn't mention is that by cancelling your cards you are going to lower your credit limit, thus lowering your debt to credit ratio, and your credit score will drop. What would be better advice is to just keep the account and just physically cut up your cards. Unless you have such self-control problems that even that might not stop you.

I am very disappointed that anyone, especially anyone that purports to be a collection of "Great Courses" would ever publish anything so irresponsible.

318 of 332 people found this review helpful

Not for non US listeners

The content is very interesting for someone living in the USA, but else it's not so applicable for international listeners.

156 of 165 people found this review helpful

I thought I knew a lot, but I was schooled

I bought this course because it had so many positive reviews, and I thought "Maybe I might learn something."

I learned far more than I imagined, some of it contrary to what I believed EVERYONE knew.

Professor Finke is obviously well-versed on the subject, and his enthusiasm for it overcomes any boredom that I might have found in what I generally find a pretty dry subject.

Although my knowledge of investments and diversification were strong, Professor Finke helped me reconsider what money is for. He introduced the topic of Life Cycle Theory - which is that you should consider all the money you'll make in your life and apportion it out to provide you with the maximum benefits, including pleasure, throughout your life.

This idea stunned me, as it suggests that perhaps a twenty-something should borrow money to fund her home, education and other life experiences, knowing these debts will be paid by her older self.

I was also stunned to find that home ownership isn't always the best financial decision, how to consider insurance and some good tax strategies.

If these topics sound dull, Professor Finke made them seem interesting and easily understandable.

This is one of my top five Great Courses. I just wish I had bought it 20 years ago.

75 of 81 people found this review helpful

Excellent practical overview of critical topic

I am both a lawyer and a banker. Notwithstanding significant professional training, I found very useful new info in this course. I also found helpful motivation to review and revise some of my personal financial plan.

If you are in doubt about this course, get it. Listen and take notes. Apply the principles and you will sleep more peacefully now, and thank yourself for years to come.

82 of 89 people found this review helpful

Frightening.

Please please please study way more into personal than this book if it's too late for you and you have already read it. I just finished chapter 2 and I don't think I've heard more irresponsible advice in my life. I'm speechless.
1. Absolutely and completely ignores the risk associated with debt and debt payments.
2. Acts as if borrowing at a younger age doesn't have to be repaid until 15+ yrs down the road when income is ideally drastically higher. In real life you have to make the payments pretty much immediately meaning your "spending" money is reduced and now with interest on top which further reduces "quality of life" in the short term.
3. Ignores the real world situation that you aren't borrowing from future imaginary "you" with no usury, you're borrowing from a bank that will take your means of survival to get back what you borrowed in the event you can't make payments.
I've got many more points but my overarching notion is that everything I've heard thus far is purely theoretical, obviously untested, and just downright ignorant of reality. I don't know how the editors or whoever was in charge didn't catch the runaway inductive reasoning train long past even the station of fairytale land.

9 of 9 people found this review helpful

never knew

I never really knew half the stuff in this book I was so ignorant! it taught me about mortgages, I'm 25 and some of those things I never even considered to look into. I originally wanted to just be more efficient with my money but I got alot of info. the great course's books are always so good and rich with info.

7 of 7 people found this review helpful

Solid overview

Solid overview of personal finance planning with essential information for beginning students and good tips for advanced students. One word of caution regarding the lectures is that the life cycle theory which advises spending more when you are young is a sound economic theory, but lousy personal finance advice.

22 of 24 people found this review helpful

Should be mandatory class for all

While basic, this course does a very good job of outlining the basics of personal finances. And while American, the vast majority of the principles and recommendations are universal. If you have a young adult or teen living with you, get them to listen to this book. It should be a mandatory course in all grade 12 students across North America. Narration was solid and there's humour throughout, so it the 6-plus hours goes by quickly. Highly recommend.

26 of 29 people found this review helpful

Covers a broad range. Very useful

Would you recommend this audiobook to a friend? If so, why?

I would recommend this book to anyone, however, only a few courses are likely to apply to them.

How would you have changed the story to make it more enjoyable?

I wouldn't change anything. It's supposed to be informative and it was.

What does Professor Michael Finke bring to the story that you wouldn’t experience if you just read the book?

It's easier to listen to informational material than to read it just because of the conversational , engaging style of the former. I believe it would challenging to write a book that is equally engaging.

Was this a book you wanted to listen to all in one sitting?

Absolutely not. Only a few sections were relevant to me.

12 of 13 people found this review helpful

Good starting book for personal money management

The book gives you some sort of structure of personal money management tools as well as a basic understanding of the main good planning concepts. Definitely you will learn a thing or two. My problem with the book it is mainly talks about the American system and I live in Australia.

31 of 35 people found this review helpful

Useful but more relevant to those in the US

I liked that it covered a range of financial products and encourages you to create financial plan. But it’s more useful to those in US than UK.

9 of 9 people found this review helpful

Good Lecture

Really good advice. Not for UK though. I would recommend it anyway. You can use all that advice and adjust it to your country's laws and financial ways

5 of 5 people found this review helpful

Best to wait until you have a job.

Any additional comments?

Personally, I'll do it again once I'm a bit older and have a job. At the moment I am a student at university and so a lot of the things that he talks about. (i.e. retirement and investing) are stuff that I cant really do at the moment. I really just wanted to know how to manage my money so that I could make it to the end of the month.

4 of 7 people found this review helpful

Highly recommended

Easy to listen to, well structured. Overall a very good source of reliable information. Some parts, such as the part on taxes, only apply to the US system.

Advice primarily for US consumers

a general primer on all aspects of money during all stages of adult life. US specific in many chapters but sound generic advice too.

US centric

Learnt some insightful basics on stocks and bonds but other than that was pretty irrelevant.
Quite dangerous advice given - based on lifecycle theory you should average out what you earn and spend in a lifetime so you borrow from your future self in early life (i.e. Drown yourself in debt) as your income is expected to rise in middle age and you can pay it off later. But this assumes your expenses stay the same, why do you need to spend like a 40 year old if you don't have a family and bigger bills?

1 of 2 people found this review helpful