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Synopsis

How We Prevent Wealth: A Personal Finance Reflection, is a personal finance book that every young professional must read.

Its author, at 30 years old, reflects on why, after being in the work force for 12 years, he has not amassed the amount of net worth that he should have had, relative to his current lifetime earnings. Instead of being well within the net worth range proposed by Stanley and Danko, in their best-selling book, The Millionaire Next Door, he realized that he had made a series of detrimental, common financial mistakes that too often traps many young professionals into a world that is surround by debt and other financial stressors.

In How We Prevent Wealth: A Personal Finance Reflection, the author personalizes almost every chapter to bring a sense of reality, not theory, to how easily one may actually build wealth.

He talks about how his own mistakes, such as his impulsive spending habits, multiple car purchases, disagreements with his spouse about money, ignorance of investing, long term mortgage payments, and among other things, getting caught in “the upgrade cycle,” drastically minimized the amount of money that could have been used to add to purposeful, measurable, and realistic wealth building goals.

His philosophy to not “prevent wealth” is simple and far from restrictive, and is as follows:

1. Define what wealth means to you.
2. Determine what needs to happen to bring wealth within your reach.
3. Set effective financial goals to meet your personal definition of wealth.
4. Reevaluate your goals as necessary.

However, “determining what needs to happen to bring wealth within our reach”, is the basis for How We Prevent Wealth: A Personal Finance Reflection. The earlier we make this determination, the wealthier we may become.

Table of Contents

Preface

Introduction

Chapter 1: I Prevent Wealth

Chapter 2: We Don’t Believe Wealth is Within Our Reach

Chapter 3: We Don’t Reflect on Where We Stand

Chapter 4: We Don’t Live on a Budget

Chapter 5: We Don’t Educate Ourselves

Chapter 6: We Set Ineffective Financial Goals

Chapter 7: We Get Caught in an Upgrade Cycle

Chapter 8: We are Impulse Spenders

Chapter 9: We are Slaves to Our Credit Cards

Chapter 10: We Change Our Cars Too Often

Chapter 11: We Think Renting is Throwing Away Money

Chapter 12: We Purchase Thirty Year Mortgages

Chapter 13: We are Horrible Investors

Chapter 14: We Don’t Prepare for the Unexpected

Chapter 15: We Don’t Understand the Importance of Retirement Savings

Chapter 16: We’re on a Different Financial Page Than Our Significant Other

Chapter 17: Our Marriages Often End in Divorce

Chapter 18: Our Social “Friends” and Other Distractions Limit our Productivity

Chapter 19: We Don’t Have a Plan to Build Wealth

Chapter 20: We Don’t Understand that Time is Money