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Additional thought of Graham White in highlights.

There is a great deal of information in the latter part of this book that I have not attempted to condense.  It goes into detail about specific financial strategies of managing and investing your money.  If you want to gain control over your financial future as a couple - buy this book.


This book might be able to entertain you and get you thinking about some important issues, but there's no way it's going to change your life unless you are willing to take some real action yourself.  

Values are the key to living smart and finishing rich.  The sooner you and your partner start putting your values first - and stuff second - the sooner the two of you will start living a life that excites and empowers you both.  That's because when you understand your values, you tend to live the life you really want almost automatically.  Instead of having to "motivate yourself" to do the right things, you find yourself being pulled in the right direction by the power of your values.  Stuff may be nice, but it rarely pulls us anywhere worthwhile.  Only values can do that.

Too many of us spend our lives pursuing stuff, without really looking at our valued.  What happens is that it leads to a mid-life crisis, which generally leads to all sorts of unhappiness, including divorce.

The truth is that most mid-life crises occur because people get to a certain age with all this stuff they've accumulated and suddenly it hits them that their stuff isn't really making them happy - that this stuff they've spent all this time and effort getting is actually the wrong stuff.

This almost never happens to people who've got their values straight.  You don't hear someone in their 50s say, "well, I've lived my life in line with my values, but now I don't think I like my values anymore, so I guess I'll get divorced and start over."

In order to create a sensible Purpose-Focused Financial Plan, you must understand what money means to you, what values it can help you achieve.  Once you know this, you can quickly focus your time and energy on what matters most to you- not what society, friends, or advertisers say matters, but what you say matters.

If you're going to get rich, you're going to have to learn how to get rich!  Being smart and finishing rich doesn't just happen - it takes real actions and positive commitment on your part.  Take classes, read books, study the stock market, and make friends with rich people.  

Though taking control of your finances can be both fun and easy, it does require a real commitment, so do yourself a favor - make a commitment to yourself that you will invest the hours necessary to really read this book and put the steps to work.  If you do them, they will change your life.  Even if you do only two or three of the steps, you will be better off than 80% of the population.  If you do five or six steps you will be better off than 90%.  

A high income and a high net worth are not the same thing.  You can make a lot of money and still be broke or in debt.  On the other hand, you can make very little money and still become rich.

You don't have to be rich to be an investor.  Investing is not the same thing as working at becoming rich.  

Many people invest, but few take the time to learn about what their money is doing for them.  Being a parent is more than having children - it is about learning about them, what they like, what their dreams are, what they can do, what they struggle with.  The same is true of money,  you must study it, spend time learning about what it does well and what it can't do.  Simply sticking it in an investment and hoping it will grow is like sending your child off to a boarding school and hoping they turn out alright.

If you and your partner aren't BOTH looking after your money, you can't have any real confidence in your financial future.


The Facts and Myths About Couples and Money

The truth about money management s that it's not really that difficult.  If you know what to do and what not to do, it's actually pretty easy.  The challenge is that we're not taught about money in school.  As a result, much of what we learn about it comes from friends, word of mouth, and marketing.  This is why a lot of otherwise smart people spend their whole lives doing the wrong things with their money.

It comes down to this...

It's not what you know about money - it's what you don't know that can wipe you out.

So much of what people have learned about handling money is actually dead wrong.

Myth:  If we love each other, we won't fight about money.

Fact:  Money has very little to do with love...and a lot to do with how much you fight.

Love has nothing to do with money.  It doesn't matter if you love your spouse or partner more than anything in the world.  If the two of you have conflicting values about money and make financial decisions that fail to accommodate each other's feelings about the subject, you are going to have serious relationship problems.

  1. How you spend money has nothing to do with how much you love each other.

  2. The two of you were probably raised differently when it came to money.

  3. The two of you probably value money differently.

  4. The tow of you probably spend money differently.

You don't have to change who you are or what you value in order to finish rich.  Nor do you need to become financial geniuses.  The things you need to do in order to become wealthy are basically quite simple.  They don't require positive-thinking exercises or memorizing mantra. All they require is what I call "positive action."

Myth:  It takes money to make money.

Fact:  It takes very little money to make money...as long as you are patient and disciplined.


Many people pay way too much in taxes because they don't understand that there are many simple, legal ways to reduce their tax bite.

Myth:  If we don't talk about money, everything will work out okay.  

Fact:  If the two of you don't start talking about money, you'll more than likely die broke.

Smart Couples Talk About Money All The Time

Couples who plan together have a better chance of being happy together.  The fact that most of us are not raised to talk about money is a real tragedy.  Show me a couple who doesn't talk about money and plan their finances together, and I will show you a couple headed for financial trouble - if they're not already in it.  People find it difficult to bring up the subject of money with their partners.  They think their money problems will just go away - they won't, they'll only get worse.  

You have to clean up your mess before you can move forward.

Couples Financial Quiz

  1. I know our current net worth (i.e., the value of the assets we have minus the liabilities we owe).

  2. I have a solid grasp of what our fixed monthly overhead is, including property taxes and all forms of insurance.

  3. I know how my partner feels about our monthly overhead.  We have discussed both the size and nature of our regular expenses and obligations, and are comfortable with them.

  4. I know how much life insurance my partner and I carry.  I know exactly what the death benefits are, how much cash value there is in our policies (if any), and what rate the money is earning (if applicable).

  5. I have reviewed our life insurance policies sometime in the last 1-2 years and I am comfortable that we are paying a competitive rate in today's insurance market.

  6. I know the current value of our home, the size of our mortgage, the interest rate on the mortgage, and how much equity we have in our home.  I also know the length of our mortgage-payment schedule and how much it would cost per month to pay down the mortgage in half the time.  OR   I know how much rent we pay, when our lease expires, how much of a security deposit we gave the landlord, and what renewal rights we have.

  7. I know what type of homeowner's or tenant's insurance we have and what the deductibles are.  I know whether or not our policy would provide us with "today's replacement cost" or actual cash value, if our home and/or property were destroyed or stolen.

  8. I know the nature and size of all or our investments (including cash, chequing accounts, savings accounts, money-market accounts, GICs, Treasury bills, savings bonds, mutual funds, annuities, stocks and bonds, real estate investments, and collectibles such as stamps, comings, artwork, etc.).  I also know where all the relevant paperwork is kept.

  9. I know the annualized returns of all the above-mentioned investments.  I know the current value of all of our retirement accounts (including RRSPs, RESPs, company pension plans, etc.).  I know where the statements for these accounts are kept and I have a solid grasp of how all our accounts performed last year.

  10. I know what percentage of our income we are saving as a couple.

  11. I know how much each of us is putting into our respective retirement accounts, whether that amounts to the maximum allowable contribution, whether our employers are making matching contributions and what our respective vesting schedules are.

  12. I know how much money each of us will be getting from our pension plans and old age security when we retire, and what our pension benefits (if any) will be.

  13. I know whether or not we have a will or living trust, what its provisions are, and how up-to-date it is.

  14. I know whether our income would be protected by disability insurance should I or my partner become unable to work.  If we do have disability insurance, I know the amount of the coverage, when the benefits would start, and whether they would be taxable.  If we don't have disability insurance, I know why we don't have it.

  15. I know what my partner's wishes are regarding medical treatment (including being kept alive by artificial means) in the event he or she falls seriously ill or is seriously injured.  I know whether or not our will includes a valid power of attorney covering such situations.  I also know how my partner feels about being an organ donor.

  16. I know if my partner has taken an investment class in recent years.

  17. I know how my partner's parents handled their finances and I know what effect that has had on how my partner feels about how we manage our money.

Give yourself one point for every time you answered "True" and zero for every time you answered "False."

14-18 points.  Excellent!  you and your partner have obviously been planning together, as a result of which you have a good grasp of the state of your finances and how you both feel about money.

9-13 points.  The two of you are not totally in the dark, but there are some areas in which your knowledge is less than adequate.

Under 9 points.  You and your partner don't make a habit of talking about money, do you?  As a result, your chances of being hurt financially because of insufficient knowledge are enormous.  You need to learn how to work together in order to protect yourselves from future financial disaster

If you scored well on this test, congratulations!  But don't go out and start celebrating just yet.  Even among knowledgeable money managers, it's rare to find people who have a handle on every aspect of their own finances and what they could and should be doing to assure themselves secure futures.  So even if you scored 12 or above, I guarantee you'll discover a few secrets and ideas that will be of enormous value to you.


Decide what you feel are your top 5 values, write them down, and start planning your life around them.

What is really important to you?  What is the purpose of money in your life?

Financial planning involves values first and stuff second.  What can happen if you do financial planning strictly by the numbers, instead of by what's important to you is that you can convince yourself to not even bother trying.

Unpleasant situations are the result of repeated decisions and actions that conflict with your value system - your behaviour doesn't match your personal values.

You Can't Plan Where You Want To Go Until You Know Where You're Starting From

A Purpose-Focused Financial Plan requires actions needed in order to bring they way you life your life into harmony with your values.  Stay focused on values - not goals, not things, not stuff to do or buy.

Many of us can be with our partners for years, sometimes decades, and not know their most deeply held values.  If you have children, consider doing this exercise with them.  There's no reason young kids can't start living life in line with their values.  Think about the impact you could have on your children if you actually knew what their values were and helped make them real.  Think about how much better your life would be if you had started doing this yourself when you were still a child.

Your values are what motivate you and shape your life.  They have already motivated and shaped you, whether you know it or not.  People will do more to protect their values than almost anything else.  People will do more and act more quickly, with regard to their finances when they understand how their actions relate to their values.  

There Are Three Fundamental Truths Of Financial Planning

  1. You can't plan your finances if you don't know where you're starting from.

  2. You can't plan your finances if you don't know where you want to end up.

  3. In order to stay on track from your starting point to your destination, you have to monitor your progress.

Unfortunately, most people don't plan together, they just let their financial life happen to them.

A Little Planning Can Lead To Big Rewards

Financial freedom and happiness don't require that you make a lot of money.  Anyone can do it, it's just a matter of planning:

  • When you are settled in a center where you want to live, buy a house as soon as you can.  

  • For purchases other than a vehicle, pay cash.  If you don't have the cash, don't make the purchase.

  • Put some of your money into investments, don't just spend what's extra on "fun".  Consider buying rental property that will provide a return on your investment and increase in value over time.

  • Purchase used, but well-maintained cars and look after them.  Wait for a good deal if you can.

  • For big luxuries, like a boat or a cottage, put aside a little bit of money and wait for a great deal.  You may find you can buy your dream for half the cost by watching and waiting rather than buying new and making payments.  (Wouldn't it be nice to buy two dreams rather than one?)

  • Plan your work around the lifestyle you want.  Determine how much flexibility and free time are important to you and design a lifestyle that supports those goals.  Don't take on a huge house if you want to work less, retire sooner or have one of you stay home with the kids.

  • Find a way to do work you love so that your job fulfills you rather than just feels like "work".

  • Keep trying until you find what works for you.

Taking Your Values An Making Them Real

Nothing can change a person's life faster than defining a number of specific, meaningful goals and then putting them down in writing.  Simply writing down a few meaningful goals can literally transform your future in just a matter of days.

Life Is Difficult

It's not easy to get good grades or graduate from university or find someone to love and then have a great relationship or marriatge.  It's not easy to succeed in work or business.  It's not easy to become wealthy.  It's not easy to raise good kids.  It's not easy to stay healthy.  BUT it also happens to be true that it takes just as much effort to have a "bad life," in which you don't get what you want, as it does to have a "good life" where you do.  So given the choice, why not go for the good life?

Most people simply let life "happen" to them.  wherever the river of life takes them, that's where they go and you know where most people end up?  On the rocks!

Most people who just go with the flow wind up complaining about where they "floated".  They go around saying life is not fair.  Well, I disagree.  Life is totally fair.  You get what you go for.  Go for nothing and you get nothing. Go for something and even if you miss your main goal, you might still achieve a lot of good stuff along the way.

I'm not just saying this.  Goal-setting works.  It's a fact.  The world is filled with people who started out with nothing and wound up with more than they ever dreamed - simply as a result of having set goals for themselves.  One phenomenal example of this is a woman we all know named Oprah Winfrey.  Here's someone who grew up poor, was abused as a child, was told she'd amount to nothing, and yet became on of the greatest role models of our time.  Now, Oprah didn't wake up one morning when she was a teenager and say, "I think tomorrow I'll have my own TV show and influence the lives of millions of people every day."  She worked for decades setting goals and battling against all kinds of obstacles to make it happen.

Many people "want" to be wealthier.  Other "want" to be happier, or have more romance, or a stronger family.  Practically all of us want something we don't currently have.

Wanting something and getting it are two different things.  In order to achieve a dream you must set a goal and be prepared to get the education and do the work necessary to achieve your goal.  In order to achieve your goal, you must know precisely what it is that you're after.  In other words, you need to take your vague ideas about what sort of life you'd like and make them specific.

Make Sure Your Goals Match Your Values...As A Couple



Everyone in North America makes enough money to be wealthy.  So why aren't we all rich?  The problem isn't our income; it's what we spend.  We simply waste a lot of it on small, every day things.  Those "small things" can add up very quickly to some amazingly large amounts.

Most of us don't really think about how we spend our money - or if we do, we focus solely on the big items.  At the same time, we ignore the small but steady expenses that drain away our cash.  We don't think abotu what it cost us to earn our moeny, and we don't realize how much wealth we could have if, instead of wasting it, we invested it.

It's not hard to figure out why so many people have been going broke.  These days you can buy just about anything without actually having to pay for it...at least not right away.  You can go to a furniture store and decorate you whole house, and the nice people there won't bill you for 18 months.  Or maybe you want a new car or a boat, or both.  No problem.  You just go to the showroom, smile, and - presto! - you've got yourself a brand-spanking-new BMW or Mercedes with low monthly payments (or not so low).

With all these opportunities - all these temptations - all over the place, who wouldn't give in?  Gosh darn it, we're working hard.  The world is a tough place.  We deserve nice stuff.  Not only that, but we deserve it now!  Forget about saving.  Give me my stuff today.  FedEx me my stuff.  And, oh yeah, while we're at it, make sure to put it on the credit card that gives us frequent-flyer points.  Don't they have some sort of special promotion this month where we can earn extra miles?  Maybe e we should spend a little more and get a little more stuff?

All too often, being careful about the give things makes us feel as if we can afford to forget about the little things.  We don't like to admit it, but it's true.  There's a tendency to say to ourselves, "I'm not wasteful with my money, but gosh darn it, I should at least be able to buy myself a nice cup of coffee and a bagel in the morning.  I ought to at least by able to rent a few videos tonight and pick up a pizza.  Five dollars here and $5 there isn't such a big deal, is it?

Well, maybe it is.  $5.00 here and there can become a million-dollar investment if you do it right.

Why We Blow It

Money is easy to waste, especially on the small stuff.  You can't go two blocks in any city in America without coming across a fast-food restaurant or a juice bar or a place to have a fancy cup of coffee.  Stop in any one of them on a regular basis and you can easily wind up spending $5.00 a day on nothing.  Drink a couple of cans of pop or bottled water and there's another couple dollars down the drain.

We haven't even talked about bad habits like cigarettes and alcohol that can eat through your money like a termite tears through your house.

How To Stop

Track your expenses for the next seven day.  Were you looking for a bigger miracle?  Simply keeping all your bills, even the ones for less than a dollar -ESPECIALLY the ones for less than a dollar - will teach you a lot about how you waste your money.

Multiply what you just "blew", nickel and diming yourself broke, times 52, then multiply that times 30, multiply that times 1.5 to account for inflation, multiply it by 5 to take into account how much it would have made had you invested it and you'll see what you're going to waste over the next significant portion of your life!

Albert Einstein, widely considered one of the greatest minds of all time, was once asked to name the most amazing phenomenon he had ever come across.  He replied that it was the power of compound interest.  It was truly "miraculous" when you looked at it, he said, and even more so when you actually put it to work.


David Bach


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