Book Review: How to Think About Money

How to Think About Money is a really slim book. It’s only 146 pages long and I was actually a bit disappointed when it arrived last week. However, after racing through it and finishing it in a couple of hours I don’t think it needs to be any longer.

HtTAM contains a set of principles the author Jonathan Clements has come up with over the course of his career as a journalist and investor. 

They are fairly simple but, as the author explains: “putting these ideas into practice takes thought and effort”.

Here are the twelve suggestions he ends with:

1. Spend money on experiences rather than things
2. Spend money on time with family and friends
3. Save and invest so you can do what you want every day instead of being forced to work (this doesn’t mean retiring, but rather doing work you enjoy)
4. Plan to live too long rather than die too soon
5. Invest over decades, ignore short-term market moves
6. Keep your monthly fixed costs low
7. Make saving/investing automatic
8. Invest in globally diversified idex funds
9. Focus on the inherent value of your investments (dividends, etc.) rather than the price
10. Saving for retirement should be a primary goal as it is so monumental
11. Consider your finances as a whole, including your human capital (earning power)
12. Getting rich is not the goal, having enough to enjoy your life is

Of course the book goes into much more detail on these, but that list should be enough to give you an idea of where the author is going.

Now, this kind of content was perfect for me, but I eat and breathe this stuff every day. I’m not sure this is the book for someone starting out with personal finance. For someone starting out with the idea of saving Your Money or Your Life is still my go-to book. For investing, Millionaire Teacher.
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If you’re comfortable with both you might just enjoy How to Think About Money. I did, very much. I’m actually planning to read it again and focus on what I can work on in my money thinking.