A step by step guide to restoring your Family’s Financial Health – Dave Ramsey

This is yet another book from Dave Ramsey. So if you need a little booster on your mission to improve your finances or are diverting from your financial journey then this book will restore you to your original path. We often know that when we start something new we are enthusiastic and eager to do it for a while but then boring Middle journey hits us and we swagger from our path so we need such books to retain our financial journey.

The words of wisdom from this book are:

  • Financial management is 80 percent behavior and 20 percent know-how.
  • Money is active. It grows or shrinks depending on whether you save or spend. If you save and invest your money well, time and interest rates will help it grow.
  • The bottom line is you have to gain control over your money before it controls you. You have to make your money work for you instead of against you. You want to own rather than owe.
  • Create your action plan for next week. Remember to write down one spiritual, relational, physical, and mental goal and the date you intend to achieve that goal.
  • Norman Vincent Peale said, “Plan your work for today and every day; then work your plan.”
  • Most of our society defines a financial genius as someone who can make money faster than he can spend it. We have been misled. Financial geniuses know that the best way to get rich quick is to make wise decisions and let time—and compound interest—make you wealthy.
  • Vince Lombardi said: “The harder you work, the harder it is to surrender.”
    Guide to select Mutual Fund
  • First, get a list of funds.
  • There are four criteria you can use to help you evaluate a fund: performance, family, fluctuation, and expenses. The first two criteria should be given most importance when deciding where to invest.
  • Performance
  • Family
  • The next criterion to consider is the family of funds. Look for families that have been around ten years or more and that have performed well overall.
  • Fluctuation Not as important as the first two criteria, this is what I call the roller coaster test.
  • The statistic used to measure this roller-coaster ride is called the “beta,” and can be found in the funds’ sales materials.
  • For aggressive growth funds, you should look for betas of 1.5 or 1.7. If your fund’s beta is less than 1.0, then it is calmer than the overall stock market. Most balanced and growth-and-income funds, for example, have betas of approximately 0.9 or 0.8.
  • Expenses The most overworked, overrated criterion for choosing a mutual fund is expenses.
  • A broker or financial planner should have the heart of a teacher, not the heart of a salesman.
  • Three steps to retirement planning:
  • 1.Set goals for your retirement. Think about how you want to live during your retirement years—dream a little.
  • 2.Count the cost. Calculate approximately how much it will take to fund your retirement lifestyle, and set a financial goal that will help you make that dream come true.
  • 3.Create a monthly savings program. Choose the right investments to achieve your financial goal.
  • Your financial mistakes don’t matter now. They are in the past. What does matter is that you learn from your mistakes
  • Kids learn by example.
  • Children also learn by experience, by putting ideas into action rather than by simply talking about them.

The itinerant pastor John Wesley said, “Make all you can; save all you can; give all you can.”

I liked the easy and smooth way Dave Ramsey reminds us of the basics of finances and removes any conflict or indecision on our part. So read this book to boost your financial journey and keep you motivated on the path.