*Disclaimer: Since I like this book and have gifted so many copies already that Amazon won’t let me order more, my opinion might sound overwhelming. The following is a summary / review based on the author’s understanding of the book.
Over a period of time, as I experienced money and worked in finance, I understood that most of the financial advice available online and in print is purely BS! Hence, initially I was apprehensive as I wondered whether this is just another book with impractical or irrelevant advice packaged in a fictional yet emotional narrative. But it soon shattered my apprehensions as it imparted a structured understanding to my experience and an explanation for the irrational behaviour that I witness closely amongst clients.
Yes! Disregard to the logical explanation, or rather justification, that we keep providing to ourselves, most of our decisions are irrational and driven by emotions. After all, man is a social and emotional creature that throws the excel compounding logic out of the window. Hence, rather than merely focusing on the power of compounding, this book also elaborates the reasons why we fail to implement such a simple yet powerful strategy in our personal finance.
And most importantly, this is one of the few books that acknowledge the power of luck! We often underplay the importance of luck only to appease the human ego and avoid underplaying the role of efforts and intelligence. However, luck is an indispensable ingredient that plays a significant role in personal and business success. Read this blog on role of luck in business success to understand the contribution of luck. Or just a Malcolm Gladwell says in his book Outliers, sometimes you just have to show up at the right place at the right time and be a just smart enough person with the will to grind.
As you might have read that most of your life is not about what you do but how you react to what is done to you. The same implies to other aspects including business and finance. In theory, business is simple, you buy things and create value that is greater than the sum of costs in order to generate a profit margin. However, what makes it challenging is the fact that in the real world environment your every action has at least one, usually numerous, reaction! Just as business in a nutshell so is personal finance, simple in theory yet difficult in practice. This book not only acknowledges this fact but also suggests practical measures.
And finally it discusses the implications of context as relevance is important for any advice or strategy. In simple words, what works for me may not work for you, what worked for Mr. Buffet may not work for Mr. Jhunjhunwala and what worked for JP Morgan in Industrial era may not work for SoftBank in Internet era. Strategies become obsolete as they spread and favourable environment becomes competitive as more market entrants, while your situation and aspirations remain unique. Thus, just as business strategy needs to be contextual so does financial advice and this book explains it through excellent narrative.
Moreover, this book states the psychological reasoning and hacks. One of the very simple yet powerful advice given by the author is that you do NOT need a purpose to save but just a mindset to save. Now imagine if you start to save as diligently as you did to save for your new car or house, how much more money you would have put aside. At twenty-nine years, when I look back with this mindset, I sincerely regret the saving opportunities that I let go. On this note, I would recommend you to read this blog on Financial Captivity that describes how our wants keep us away from financial freedom.
Finally, the author puts his money where his words are. He not only shares the story of other successful people but also shares his strategy and choices. You might find this modest as it fails to come across as a get rich quick recipe, but for someone like myself working in finance who do are skeptic about overwhelming success this comes across as a practical and adaptable advice. You will not find this as glamorous as the YouTube gurus touting real estate or stock money, but this is the most practical advice valid for most! Whereas, the advice from internet ‘gurus’ is questionable and if not, is only valid for a few.
Although this might come across as a bitter or bland pill to swallow, disregard to your current situation as a frivolous millennial banking on inheritance, aspirational Xennials strategising investments or wise Generation X planning retirement, this book is a must read!
And if you are an entrepreneur seeking the understanding and knowledge to grow your business and achieve your financial goals, you should refer to our highly admired course on Business Management Fundamentals
Header Image Photo by Visual Stories || Micheile on Unsplash
Savvy Munshi 
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