This Is the Year I Put My Financial Life in Order

Every so often, a book comes along and I find the time to read it.

A harmonic convergence, if you will. I was fortunate to get an opportunity to read (and review) a book that I think you’ll dig: “This Is the Year I Put My Financial Life in Order”, by New York Times columnist and author, John Schwartz.

To start with, I consider this effort a true companion piece to the classic, “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy.” But not in the way you’d expect. See, Schwartz is an excellent writer. He’s had a long career working at blue-chip pubs including Newsweek, Washington Post, and currently, as a correspondent for the New York Times.

As such, his book is a much more engaging financial memoir of sorts. Filled with entertaining anecdotes and forehead-slapping moments, Schwartz walks us through a life of fairly modest means, leading up to a fairly fruitful retirement in-store. But make no mistake. This is no Mr. Money Mustache story…

A Book for the Traditional Careerist

Schwartz’s experience, filled with highs and lows, resonates with what you and I might consider the classic “American Dream.” Not the dream of FIRE (Financial Independence with Early Retirement) involves saving 50-70% of your income to retire early. Rather, this is what happens when you set aside maybe 15-20% and avoid extravagance, over a long and steady career.

Schwartz and his wife Jeanne have achieved what “Millionaire” says you’ll achieve when you follow tried and true guidelines:

1. By and large, spend (and live) below your means
2. Invest early and consistently in your employer-sponsored retirement plan (set and forget)
3. Insure thoughtfully (healthcare and term life) and get a living will

You Are Allowed to Love Your Job

This was the kicker for me. Here’s a guy who loves his job. Wow! Count me among the envious. Schwartz is a journalist, and he lovingly weaves his career path throughout the 200-plus pages of financial hijinks.

Now, it’s not all roses. As Schwartz reminds us, the media establishment of old went through massive upheaval in the 2000s, as alternative sources (fake news?) brought disruption to a decades-established industry. Surviving that landscape as a journalist took talent and resilience. Fortunately, Schwartz brought good chops to the game and has survived.

Heck, if I could do it all over again, I would’ve applied myself a bit more at journalism camp during my freshman year of high school. One classmate ended up writing for the Boston Globe, while another still does a column for Sports Illustrated. Would I want to work until my 60s, or beyond as a journalist?

Tough to say. But there’s zero evidence that Schwartz is reluctant to roll out of bed every day, like so many of us corporate types yearning to be rid of the cubicle.

Fundamental Lessons

Whether you plan to retire early or continue to work up to the traditional retirement age, there are strong bits of wisdom Schwartz offers:

1. When it comes to your work-sponsored 401K plan, be mindful of the administrative fees. Read the fine print. Anything approaching 1% or more can put a serious crimp in your future savings.
2. Frugality is crucial. Money saved is more valuable than money earned. Get a Costco membership, but don’t go nuts (unless the nuts are macadamia and you don’t let them spoil.)
3. Avoid individual stocks. Join the Bogle Bus and ride Index Funds to Wealthville (That’s a Cubertism, not a Schwartzism)
4. Avoid financial advisors like the plague. One of the more entertaining chapters describes Schwartz’s interviews with a variety of financial planners and services. They all seem to contradict each other, and (surprise) want to take massive dumps on index funds. If you need a pro’s help, limit yourself to fee-only advisors.

“I’ll be hearing f-ing Christmas bells before I’m out of here”

Poor John Schwartz. The guy never stood a chance. The header above was a nice, salty reply from a derelict tenant when threatened with eviction. I love his chapter on houses for several reasons. Schwartz has some royally epic fails to share with his readers. New York City is a jungle for small-time landlords, like our sage author Schwartz once was.

You may come away from this book with the idea that renting out property is a recipe for misery. Don’t fret, people. As I’ve written before, there are myriad ways to protect yourself and be a superstar successful landlord. The main lessons I took from Schwartz were 1.) don’t rent property in NYC unless you’re a commercial outfit with highly absorbent legal underpants. and 2.) don’t rent property in NYC. Period.

Sacrifice Is Part of One’s Financial Life

I respect Schwartz a great deal. The guy takes his lumps. When times are really tough, and he’s carrying two mortgages because his NYC Apartment From Hell won’t sell, he survives on fries and gravy for lunch. Every day. There’s a serious brush with bankruptcy. Schwartz goes into detail about how his family seriously weighed this option at a financially low point in their journey.

The story about their wise choice in a single-family home illustrates how we all can grow and learn from past mistakes. With the NYC “AFH” behind them, the Schwartz’s found a fixer-upper that they managed to, over time, turn into a highly valuable property. A major contributor to Schwartz’s net worth wound up to be property equity – something that wasn’t remotely in the picture when the bankruptcy was in the mix.

Analytical geek that I am, I enjoyed reading about the Venn diagram Schwartz used in selecting a house: Commute, Schools, and Affordability. We all can relate to these priorities, no? The author figures a manageable commute to be less than 45 minutes. That’s nowhere near outrageous, but I get flustered at 30.

Some families concede hour-and-a-half commutes to live near “good” schools. In doing so, they may not realize how that extra time away from their kids is more impactful to their development than whether a school is an “A school” or “B school.” Don’t get me started…

Healthcare and Raising Kids Ain’t Easy

There’s a lot of humor and heart in this book. Schwartz is on the progressive side of the equation. When his wife Jeanne goes through a medical emergency, the author is clear about the importance of good health insurance.

Author John Schwartz underscores the argument for improving Obamacare, rather than dismantling it. If nothing else, health emergencies are the most devastating to one’s financial health. We can all agree that in this country, we have the resources to provide healthcare insurance to EVERYONE. NOW.

Schwartz cites the USDA figure for raising a kid: $233,610. The eye-popping reality is that children ain’t cheap. In his chapter, “The Kids”, Schwartz does a fine job of interspersing anecdotes from raising his own three children in a part of the country notorious for high child-rearing costs. Whew, especially after reading about luxury summer camps, I’m glad we’re living large in the Midwest.

I appreciate how the author is dedicated to paying for his kids’ college tuition, out-of-state to boot. We’ve pretty much planted the flag in our household on covering half of our twins’ in-state college costs. They’ll likely get another year from their grandparents, leaving the rest to their ability to get scholarships, and occasionally WORK.

Schwartz’s kids owe him a debt of gratitude. Instead of being saddled with debt out of school, his brood can start their career lives with a clean slate. That put a major dent in the author’s retirement kitty, but our hero is a dedicated journalist. And who knows how long he’ll keep at it? If he’s like his father, he could be penning columns into his 90s…?

Get Inspired by This Is the Year I Put My Financial Life in Order

Those of us die-hard early retiree wannabes will appreciate the pitfalls and nuggets of wisdom from Schwartz’s misadventures. I found this book to be a true page-turner. It never bogs down into extraneous details. The use of personal anecdotes and non-preachy style makes the book very accessible.

FIRE bloggers might read this volume and think, “Hey, I knew all of this stuff already, and I’m cranked up to 11 on my money dial!” And that’s fine. But we all start somewhere.

This is a book for those who perhaps don’t know where to start. You want to be a millionaire next door, but need an example to follow. You know, someone with relatable trials and tribulations?

If nothing else, this book reminds many of us that a job can be a good thing. John Schwartz made a rewarding path for himself in journalism that has worked well, and without the Ivy-League pedigree that many in his field fall back on. Give this one a read, and place it alongside the Millionaire Next Door on your bookshelf. The “how-to” meets “Exhibit A.”