Financial philosophy

Money lessons from “Jaws”

Original Jaws movie poster

Recall the classic and terrifying opening scene of the movie “Jaws,” where the pretty blonde woman goes out for a night swim and we see her struggle and scream while she’s hurled from side to side. As you watch you think things like: That looks really painful. What is it doing to her? What the hell kind of “jaws” are capable of this? Does she live – I mean, the actress, because I’m pretty sure she’s not acting, she’s actually being eaten alive. Where’d this beast come from? Where’d it go? Will it come back? I’m never going into the ocean again.

Yes, it’s gruesome, but there are a lot of gruesome scenes in movies; why does this one strike such a chord with the audience? Why is it burned in our cultural memory? I think that it is because we can all relate to swimming and not seeing what’s beneath you and this is the worst (hopefully) manifestation of what else could be in the water. It’s the commonplace mixed with the unknown.

“Jaws” is one of the best horror movies ever made and you don’t even see the monster until 2/3rds of the way through the film. It’s so good because the viewer and the characters are in the same (insufficiently sized) boat, thinking through all the gory possibilities. We’re scared for over 80 minutes without ever having seen the monster. During this time we imagine the horrors this beast is capable of because we don’t know what we’re dealing with.

The product of an unknown monster is fear, and fear makes people act irrationally.

still shot of people on the beach running from shark

(If you haven’t seen the movie, go stream it. Right now. This post will be here when you come back.)

What does all this have to do with money? The unknown – what am I not doing with my money that I should/what am I doing that I shouldn’t – can swell until it turns into a full-grown monster in our head. Which retirement fund should I pick and how much should I put in? How much should I be saving for emergencies? Is renting okay or should I buy a house? Is the housing market inflated? Where did all of my money go – there never seems to be enough. All these unknowns create fear and anxiety, which when dealing with money often manifests itself as paralysis. You end up doing nothing because you’re too afraid to face this looming money monster.

In “Jaws,” the short-sighted mayor knew there were precautions the town *should* have been taking but decided to ignore the unknown killer instead and hope it went away; in life, we know there are things we *should* be doing with our money but decide to ignore the unknown world of our own finances, hoping everything turns out okay. In the back of our heads we know this is not the right thing to do and dread the day this method will bite us in the behind. (So many parallels!) This makes us stressed and anxious. Often both emotions spill over into other areas of our lives – our relationship with our partners, kids, coworkers; even our productivity at work.

You're gonna need a bigger boat gif from Jaws

There is an inverse relationship between the time we spend worrying about money and the time we spend doing something about it. More often than not, if you worry about money a lot, you will psyche yourself out and make the situation worse as you continue to ignore the problem hoping it goes away. The flip side of this is if you spend time planning, tracking, and educating yourself about money, it won’t overwhelm and stress you out. You’ll spend little time worrying because you’re spending your time actively managing your money. As you aren’t worried about money, you are better able to enjoy spending time with friends and family. You can be more focused at work as you aren’t anxious thinking about things like paying for braces. In “Jaws” terms, your boat will be sufficiently sized.

Once we see the beast in the movie, we know what we’re dealing with. It’s a big shark. It’s scary, but ultimately we have thumbs and weapons and it doesn’t. Yes, money can be scary because there’s so much we don’t know, but all of us can track our spending, check out some books from the library, and make a money plan. The hardest part is getting started. Once you see the money beast and not the one in your head, you can start spending according to a plan. You can buy your lattes and go on trips and not feel guilty about your purchases. Your stress rate will plummet. You are now acting rationally.

If this idea of the personal finance monster has resonated with you, you see there’s no good reason for feeling overwhelmed. Start doing something about your finances (see the above paragraph for tips). Starting is the hardest part, but once you do, you are much, much closer to financial security and reaching your goals.

I’ll be writing a follow up to this post for steps on how to get over the monster in your head. Subscribe below to have it sent to your inbox on the day it is posted!

*As with all things, this post does not apply to 100% of the population. We are all different people, in different places in our lives, with different needs. This post is most relevant for people whose needs are met by their income. If you are working full time and do not make a living wage, you have other needs which I will address in later posts*
Book Review

Review – “Rich Dad, Poor Dad”

Book cover, Rich Dad, Poor Dad

Title: Rich Dad Poor Dad
Author: Robert T. Kiyosaki
Publisher: Plata Publishing, LLC
Copyright date: 2011 (first printing 1997)
Find it at your local library: WorldCat

Authors’ keys to building wealth: Make money work for you

Best for those who: (this title is not recommended)

Overall: 1 out of 5

Review: This title is beloved by many across the globe. Thousands of smart people credit it with helping them in their business or life. The allegorical prose and simple writing style make it easy to understand why it is so influencial. If it helped you build your business or learn personal finance in a way that other titles were unable to, please let me know what this book did that was different for you in the comments.

There were many the things I liked about the book. Of the 82% of the book which wasn’t an advertisement for other books or products of his, perhaps 10% gave solid advice. Here is my comprehensive list of useful take-aways from this book.

He discusses:

  • how desire and fear make people stay in jobs instead of striking out for themselves
  • how more money doesn’t solve problems (and above a certain economic point, this is 100% true)
  • the importance of tracking cash flow for becoming financially secure
  • that people should reflect and question whether their actions make sense
  • how the rich don’t rely on a paycheck for their money, rather they have income generating assets which they use to make money to buy more income generating assets
  • how people with little money buy luxury items to look rich, which is self-defeating
  • that failure happens and it’s important to learn and try again, not give up
  • that you get money by what you know and lose money by what you don’t know
  • how you need a strong reason for pursuing your dream, otherwise you will fail

My professional opinion is that readers should spend their time and money on other titles. The book has far too many glaring inaccuracies, redundant themes, conflicting advice, incorrect blanket statements, redundant themes, immoral recommendations, lack of references, and redundant themes to be worth your while – especially if you don’t have experience with this subject. Did I mention how redundant this book is? Let’s continue.

The lack of references begins before you even open the book. There is a faux gold award label that touts the book as the “#1 Personal Finance Book of All Time.” I have been unable to find the metric they are using or the conferring authoritative body which allows the publisher to make this claim. The back cover, where you normally find a summary, list of accolades, and quotes from other prominent people about how great the book is, instead has the same image of the author as on the front, a five point list for what you will learn, a larger and brighter paragraph about how great the author is, an excerpt from the book, another mention of it being the “#1 Personal Finance book of All Time” and finally, a blurb from USA Today that says this book “is a starting point for anyone looking to gain control of their financial future.” Not exactly enthusiastic so much as a summation of the contents. It reminds me of the TV show “30 Rock” when Liz wrote a book and put Jack’s blurb on the back, “Lemon [Liz] numbers among my employees.”

Kiyosaki opens with a comparison of his two “dads,” the biological one and the one that is rich. The entire premise of the book – a comparison of his two dads – is most likely completely false and that he pretends otherwise is disingenuous. Of these fake fathers, one has a PhD, the other never finished 8th grade. Spoiler alert: it is not the PhD who is rich. He belittles his biological father for working because his father loves it and finds it personally rewarding, and educators/education in general; all the while telling the reader how much he loves and values education, lest we get the wrong idea. Was that confusing for you to read? I spent 178 pages trying to square that circle. The twin themes of loving and denigrating education sound over and over again throughout the work, never increasing the clarity of the author’s intentions. What I did take away was his lack of respect for people who love their job, despite low pay, and want to make the world a better place.

The inaccuracies sewed throughout show a lack of editing or attention to quality of the content. If you were coming to this book with no understanding of business or personal finance, and followed its teachings, you could go to jail. He insists you can write off vacations (p. 89), criminally delay payments to creditors or the IRS (p. 157), and even list your own cat as a business partner (p. 169). As bad as all these are, what really dumbfounded me was a misquoted saying that he builds an argument on. This is an editor’s low-hanging fruit. When something this obvious isn’t caught, it makes me wonder what else got through.

This quote is on page 52 – “A fool and his money is one big party.” But this isn’t an American or even English saying. The very well known saying he probably meant is “A fool and his money are soon parted.” I gave Kiyosaki the benefit of the doubt as sayings evolve across distance and time, and turned to Google’s autofill function to see if this is a common alternate version:

screenshot of a google search

It does not appear to be an alternate version. Further research shows his version to be an African saying. To clarify the section, all he had to do was mention this fact, but since he did not introduce it as such, I am left to assume there was little attention to detail and this is not the only occurrence in the book.

Here are some other inaccuracies, absolutely brimming over with wrongability, and this is not a comprehensive list: there is a story about a 1923 meeting in Chicago that never happened (p. 42), he claims the word “emotion” stands for ‘energy in motion’ (p. 32), he claims the American school system was created in the Agrarian Age (p. 43), he has a balance sheet that does not include owner’s equity (p. 47, and every other balance sheet in the book), and he states that “originally, in England and America, there were no taxes” (p. 80). On top of the these are his unsupported blanket statements such as “the main cause of poverty or financial struggle is fear and ignorance” (p. 33), “History proves that great civilizations collapse when the gap between the haves and have-nots is too great” (p. 36), and “poor people simply have poor spending habits” (p. 147). If you are building an argument from such a statement, you need to back them up with supporting evidence. If you do not, you leave gaping holes in your argument.

To sum up, he supports the gold standard (p. 38), calls Robin Hood a crook (p. 79), makes incorrect statements, doesn’t understand accounting (p. 47-51), encourages lying to business partners for your own gain (p. 39-40, 169), and advocates joining a multi-level marketing scheme (p. 122).

With so much untrustworthy and dubious information inside and given all the quality books out there on business and personal finance, I see no reason to spend your time sifting through this one.


Ms. Moody


Book Review

Book review, “Financially Fearless”

Cover of Financially Fearless Title: “Financially Fearless” Author: Alexa von Tobel Publisher: Crown Business, division of Random House LLC Copyright date: 2013 Find it at your local library: Authors’ keys to building wealth: Plan ahead and organize Best for those who: Want a quick and dirty explanation of financial products and prescription for what they should be doing in their financial life. Most relevant for those who are beginning- or mid-career. Overall: 3.5 out of 5. Would be a 4 if it didn’t consistently refer the reader to the author’s LearnVest company, which no longer exists. (Plus, this detracts from the content as it makes the whole book seem like a commercial.) Review: For those in their early- to mid-career who want to know a little bit about their entire financial life, this book is for you. Von Tobel does a fantastic job laying everything on the table (except taxes), giving you a little information about all of it, and a plan for your next steps. As a starting point for someone who knows they should be organizing their money, this book will be quite useful. Her prescriptive advice, such as her 50/20/30 rule – to spend 50% of your income on essentials, 20% to your future, 30% towards your lifestyle – is a good launching point for most people with a solid, steady income. This advice does not apply for those on the far ends of the income spectrum. She notes that it works for “most budgets” and allows for some “wiggle room”. (p. 74) Von Tobel herself has good credentials to be giving this advice. She is a Certified Financial Planner, meaning she’s studied this material in an academic setting and she has spent thousands of hours working in the field of personal financial planning. It is a legit credential with high standards, which unfortunately has to be said as there are a lot of initials after someone’s name that don’t mean they know what they’re talking about. Von Tobel started her company, LearnVest, a tool (app, for iphone and ipad, and website) that “simplifies personal finance and investment” in 2009. She sold it in 2015 for a rumored $250,000,000 and the new owners haven’t done much with it since. The book is broken down into three main sections – figuring out your own values and needs, budgeting, and planning for life’s curveballs. In each section the author explains why this is important, walks you through simple steps to get it done, and explains different financial products that help you to achieve your goals. Von Tobel does a wonderful job of taking often complicated, jargon-filled topics and explaining them like a friend would, as opposed to a banker or professor. Some examples that made me laugh: on p. 108 “this is an outrageous excuse and now I am drinking wine,” on p. 170 she describes your new baby as an “expensive little angel”. She shines in her ability to break down each topic into smaller and smaller bites that make them feel do-able. Given how thorough she is on almost all sections of a person’s financial life, it is surprising that there is no section on taxes. Perhaps planning for taxes is too complicated and requires its own book, in which case, I hope she writes it. The end of every chapter has a “Checkpoints and Questions” section to review the chapter’s main points, write down questions for your Learnvest advisor (who no longer exists), and often a worksheet to apply what you’ve learned to your own life. The worksheets throughout the book are useful snapshots to do while reading. My little librarian heart went a-pitter-patter when I saw her citing her statements, which total eight pages of works cited in the back of the book. Most of the citations are from good sources like the FED, academic journals, government publications, and major news publications. This shows me she’s done some good research and is using evidence-based material instead of anecdotal, so her suggestions are more likely to be effective for most people. Although I found the book very informative and, for the most part, engagingly written, there were a few sections that needed closer editor scrutiny. In at least one section, the author gives conflicting advice. On page 78 she states that one of the best pieces of financial advice she ever got was “If you always underpay on rent or your mortgage, you’ll be in a better place to live the rest of your life more richly”. Then, on page 85 she suggests “Making mortgage payments every two weeks instead of every month is a great way to accelerate your pay down…” Leaving the reader to wonder, in what situation should you ignore the “best pieces of financial advice” she ever received and do this? On page 112 and 115 she explains what a “traditional” IRA is and its benefits. The flow charts on pages 113 and 114 refer to “deductible” IRAs. These are the same product but it takes the reader some flipping back and forth before you figure this out. Given how confusing retirement accounts already are, this is a cruel joke to play on the reader who is having a hard enough go at it as is. Writing a book is a tremendous undertaking which is why every author needs a good editor. Her editor did her a disservice by not spotting these problems and having her include just a few sentences to iron out the conflict or making sure to use terms consistently to reduce confusion. Moreover, when something isn’t edited well, the problem isn’t so much that it confuses the reader, but rather you’re left to wonder what else is wrong that wasn’t found and corrected before printing. I hope the author makes a new edition of this book – with more thorough editing, updates to financial products, including a section on taxes, and leaving out the references designed to drive consumers back to her own company. Her writing is easy to digest and gives a perfect amount of depth for those just starting to get their financial lives in order. Well done, Ms. von Tobel! XOXO, Ms. Moody
Book Review

Book Review, “Millionaire Next Door”

Book cover, Millionaire Next Door

Title: “Millionaire Next Door”
Authors: Thomas J. Stanley and William D. Danko
Publisher: Pocket Books, a division of Simon & Schuster, New York, NY
Copyright date: 1996, this edition 2000

Find it at your local library:

Authors’ keys to building wealth: FRUGALITY. Track your spending, live below your means, follow a budget, create short- mid- and long-term goals, plan for your financial future. (it ain’t sexy but it’s tried and true)

Best for those who:
– want guidance on what habits and core beliefs build wealth
– have a good income but still live paycheck to paycheck
– buy status symbols but are not wealthy (the book shows this kind of behavior is often self-defeating)
– want to know how to raise their children so they will be financially independent adults

Overall: 4 out of 5. Excellent read, despite a different economic ecosystem than we have today. Would have been 5/5 if there was an updated edition as the data is from the ’90s. That said, the core values of the work are timeless.

Review: This research-based book is written for a popular audience and is an enjoyable read as the authors illustrate hard data with anecdotes and comparison stories, easing the reader through charts and numbers. Where the book really shines is its ability to define and detail actual wealth versus symbols of wealth. I found myself heartily agreeing with their descriptions of hard work, frugality, and planning as the super not-sexy building blocks of financial security.

My main hesitancy in recommending the book is the applicability of the data which has not been updated since its original publication in 1996. The people researched here were young and investing when economic inequality was very low so the average person made much more than today (post-war through the early ’70s). As wages started to stagnate, in the ’70s they had plenty of money in investments which far outgrew income during the next two decades. Put another way, they were young when young people made a lot more money and they invested this large amount of money when investments were cheap. The system is very different today but the lessons are still universal, even if you don’t end up wealthy.(1)

The premise of this book is that most wealthy people do not use their money to purchase status symbols; looking at their cars, houses, clothes, you would not know how much wealth they have accumulated, hence, they are the millionaires in your average, middle-class neighborhood. What they value is financial independence and they actively work towards that goal. Ironically, those with high incomes but little wealth are often the result of spending all their income on expensive goods to give the affectation of wealth, leaving no money leftover to actually earn their way to financial independence. By conflating symbols of wealth with actual wealth, they are committing self-sabotage. This lifestyle puts them in an earn-and-spend cycle, making them financially dependent on their jobs so they can pay off their luxury cars and fancy vacations. I would like to know how many people who: believe that net-worth and self-worth are closely associated and view item acquisition as a competitive sport, have changed their consumerist habits after reading this book. (see

A few findings I found surprising:

• Stanley and Danko found that the more education = less wealth. (p. 91) The main reason is simply that they miss out on a decade of earning that could be compounded for a longer period of the earner’s lifetime. They are quick to point out that this should not stop people from going to school, rather, don’t do it if your main reason is to become wealthy. You will be disappointed. Another reason is that the professional value of lawyers, doctors, etc., is often based on “display factors” such as luxury cars, exclusive neighborhoods, and expensive clothing – even though there is no intrinsic correlation. (p. 93) Few would pick a lawyer with a five year old Honda and inexpensive suit over one with a new Mercedes and bespoke three-piece. Thus, they make a lot of money, but cannot build wealth. With student loan debt well over a hundred thousand for many professionals, the cost of homeownership and children, plus the social pressure to spend their income on luxury goods, it’s a wonder they are able to build any wealth before the age of sixty.

• There is an inverse relationship between time spent worrying about money and time spent actively working towards wealth accumulation – basically, the more you worry about money issues, the less likely you are to take the steps to change them. (p. 88) They state that the way to “kick the UAW [under accumulator of wealth] habit” is to 1. want to change 2. find professional help. (p. 67) Depending on your situation, this may mean someone like a wealth manager, CPA, or money coach (…ahem, what has two thumbs and is a professional money coach? This gal!)

• Only one in five children of affluent parents will have wealth in the seven figures. (p. 200) They fall prey to living above their means when they are not taught good financial habits (like thrift and budgeting). Well-meaning, wealthy parents unknowingly create their children’s economic dependence. Sometimes it is because the parents want to give their children everything they never had but fail to pass on good financial habits, leading the adult children to be accustomed to the “best” in life without the capacity to earn it themselves. Other times, they help their grown child to buy a house thinking that, like education, a home is a good investment. But it is in a neighborhood the child couldn’t otherwise afford. In an effort to keep up with their neighbors, they feel societal pressure to have equally as luxurious vehicles, furniture, landscaping, etc. They spend all their own income on these goods and services leaving no extra money to build real wealth. The authors provide ten rules to raise economically independent children, page 255 – 263.

• The third generation often becomes mired in debt as they have the consumption habits of their parents without the financial grounding or support of their grandparents. (p. 200) Hence the classic American saying “from shirtsleeves to shirtsleeves in three generations.”

Despite its universal lessons of budgeting and saving, one can’t but wonder what would be different if it updated its data. There was a 2010 reissue, but the data is still from the ’80s and ’90s. In perspective, on page 80 they cite a study concerning taxation’s effect on wealth from 1986. That is the same year as Hands Across America, the Chernobyl meltdown, and Peter Gabriel’s landmark video “Sledgehammer” – which, at the time was amazing but were it put out today, probably wouldn’t be noticed. To illustrate the difference in the world we live in, I’ve put “Sledgehammer” and Kendrik Lamar’s video “Humble” – Vulture’s best video of 2017, the last full year at the time of this writing – below. 1986 was a long time ago and the rules have changed.

Perhaps the data is still relevant, perhaps it is not. What I do know is that although the world has changed a lot since then, human behavior is fairly constant, so the values remain relevant. I am interested to know how new data would compare and will be hoping for a new edition.


Ms. Moody

1. See FRED’s “Real Median Income in the United States” which shows the household median income from 1953 rose by 69% in thirty years whereas in the thirty years from 1983-2003 it only rose by 23%. I’ve put together this graph to show how, starting from 1953, the earliest year from which data is available, family income and GDP per capita rose together until 1980 when wages began to stagnate despite the considerable growth of GDP per capita.