Title: “Financially Fearless”
Author: Alexa von Tobel
Publisher: Crown Business, division of Random House LLC
Copyright date: 2013
Find it at your local library: http://www.worldcat.org/oclc/966540099
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!