This is the twenty-ninth part of The Simple Dollar Book Club reading of Your Money or Your Life. Want to know more?

The book closes with an excellent list of resources for materials related to the themes of Your Money or Your Life. I investigated several of these and found a few well worth noting if you found the concepts in this book worthwhile.

Several of the online resources mentioned in this section wound up eventually pointing to yourmoneyoryourlife.org, where you can download a whole pile of resources if you explore the site a bit. Some of the resources require a small payment, while others were free. The biggest drawback is that the site appears to have been designed circa 1995, meaning it looks low-tech and the navigation is pretty confusing.

The best part of the Resources section was an extensive recommended reading list, of which I’ve already read and reviewed two: The Overspent American by Juliet Schor, What Color is Your Parachute? by Richard Nelson Bolles, and The Complete Tightwad Gazette by Amy Daczyzyn. I quite liked all three of these books, especially the latter two, and I’m going to use this as something of a “recommended reading list” for future book reviews here on the site.

I’ve also been trying really hard to find a copy of Getting a Life, the less-heralded follow-up to Your Money or Your Life. It’s supposed to be an application of the material in Your Money or Your Life, where a rather materialistic couple actually applies the material to their own life. In other words, it’s an anecdotal complement to Your Money or Your Life, and I hope to review it soon.

The collection of additional online resources is also rather sparse and outdated. Several of the sites appear to be defunct and only one really appealed to me and provided thought-provoking information. Frugal Corner (http://www.frugalcorner.com/) was a rather interesting list of frugal resources, and I wound up following a large number of the links on that site to other resources, even though perhaps a third of the links are dead (again, it’s an old resource). Still, you’re far better off reading online personal finance blogs and frugality blogs than following these links.

In all, the resource list was somewhat outdated, but it’s useful to look at as merely a recommended reading list. I found several items I plan to read in the future from this section.

Tomorrow, I’ll give some of my closing thoughts on the book.

Over the last month, I’ve helped three different readers polish their resumes as they look to make a major career shift. In each case, I noticed several problems crop up over and over again. These problems weren’t ones that would sink the person, but they did prevent that person from standing out from the crowd, and adding the problems together ended with a forgettable resume.

Here are ten things I would always do when writing a resume, regardless of the conventional wisdom about resumes.

1. One page only, period.
This often bothers some people. “I have tons of good things to write about,” they think, so they fill up their resume with six pages of good stuff with just a sprinkling of great stuff in there. Hot tip: it’s not the “good” stuff that will get you the job. The only stuff you want on your resume is the cream of the crop, and that cream will fit on one page. If it doesn’t, you’re not cutting out enough merely “good” stuff.

2. Write everything with active verbs.
Every bullet point on your resume should sound like you took some sort of decisive action, and the more action-oriented, the better. Employers want people who get things done, not people who “participate.” Don’t write that you were involved with a project that produced $5 million in sales, state that you wrote 20,000 lines of code for a project that produced $5 million in sales. Don’t say that you “helped with the development of a new system” – write that you developed that system in a team environment.

3. List everything positive that you can think of about past positions, and use the best.
Was there positive growth at the organization while you were there, even if you weren’t directly involved? Mention it. Were you involved, even in a cursory fashion, with a hugely successful project? Mention it. Only mention the things that were clearly and strongly successful on your resume.

4. Be concrete.
Don’t state that you were involved with a hugely successful Project X, state precisely (in an action-oriented form) what your role was with that project, followed by a statement of exactly how successful it was in a quantitative fashion. Don’t state that you were involved with writing a new HR manual – instead, state that you contributed 24 proofread pages to a documentation system used by 25,000 employees. Don’t state that you did some coding for the public interface – state that you wrote 41% of the code for a website used by 2,000,000 visitors a month. If you’ve done the job of trimming things down to only the big successes, these numbers should be impressive ones.

5. Assert your abilities strongly right at the top, but be sure they’re backed up by the concrete achievements that follow.
What is the big picture that all of these selected “best” accomplishments paints about you? Try to summarize that as briefly as you can (two or three sentences, preferably), and put that right at the top of the resume. That’s likely the one piece that a reviewer will read, so make it hum and also make sure that everything below backs it up. For example, “I am a computer programmer looking for employment in the insurance industry” is not a good way to start. Try “My passion is developing intuitive web-based interfaces for data entry, something I did with great success at ABC Corp, where I developed a data entry application used by 25,000 people.” That’s going to get an employer interested, especially when it’s backed up in the information below.

6. Lead off with home runs.
When ordering the items on your resume, always put the best items at the top. If you’ve cut your list of accomplishments at your last job down to four great ones, pick the best one and list it first. Do this with every element of your resume – if you have some stellar things to say about involvement in a professional or civic organization that speaks to your leadership skills better than anything, lead with them. If you’re president of a professional organization, that’s going to likely be a job cincher, so put that right up at the top so it is noticed quickly.

7. Leave accurate and professional contact info.
Do not, I repeat, do not leave a phone number for contact that has an immature voice mail message. Do not give an email address with the number 69 on it, and also preferably is based on your own name in a sensible fashion (make a new Gmail one if you need to). Make sure that whatever contact method you use, the entire experience of using it reflects very professionally on you.

8. Write a one-page cover letter, always.
Keep it brief and simple, just a few paragraphs, but always include it. It should never run to multiple pages, no matter what. What should it say? It should just reiterate that you’re interested in the position (being quite specific about the position), and it should state in your own words how exactly the highest points of your resume really match what the needs of the position are.

9. Be professional on social networking sites.
One of the first things people will do when they’re interested in a candidate is to see if there’s any information about them on Google, Facebook, LinkedIn, and so on. Make sure that what they find is professional in nature and that it reflects well upon you. It doesn’t have to be buttoned-down, but it does need to represent you in such a fashion as to show that you won’t be a detriment to the company (at the very least) and ideally shows you as a big positive to the organization. I often recommend that people start a very simple professional website for themselves, perhaps with a simple blog updated weekly or so discussing issues of professional interest. Remember, your internet presence is an extension of your resume, so if there are inane things out there with your name on them, it’s not much different than stapling them to your resume.

10. Don’t be flashy in the design of the resume.
Whatever you do, don’t do something overly splashy with your submission. Don’t include a huge photograph of yourself on the resume. Don’t use some sort of “designer” paper that makes the text hard to read, and avoid flashy fonts. Do something simple and just let your achievements do the talking. I’ve seen at least two interviews where the “flashy” resumes were immediately trashed – just don’t bother.

In a nutshell, the goal of any resume is to get an interview, and the best way to get there is to show off your best accomplishments in a professional fashion and make sure that the trails they follow indicate professionalism as well.

About four or five times a week, a reader will send me a very extensive explanation of what they’re doing financially and simply ask me if I think it’s okay – and virtually every time, it’s just fine. Even though some of the themes are repetitious, I actually quite like these emails, as it shows there are a lot of people out there making good, strong financial choices.

What I find interesting is what all these emails have in common: a general sense of “I think I’m doing this right, but I’m not sure.” I have this same exact feeling as well, quite often, when it comes to my financial planning.

Why is this sense of unease so universal? If I feel it and a fair number of my readers feel it, there must be something to it. I think there is a pretty deep fundamental concern for “getting it right” among people who are getting their financial house in order.

For me, I made some big financial miscues earlier in my life. These miscues taught me one key thing: I certainly don’t have all the answers when it comes to money, and because of that, I’m often concerned I’m not following the right path.

However, there are at least three big factors that make me feel better about this.

First, no one has all the answers when it comes to money. There are a lot of financial gurus out there, as well as some great financial role models. Guess what? None of them have all the answers. The best thing you can do is learn, synthesize, and figure out what’s right for you.

Second, there’s only one absolute truth in all of the information. Spend less than you earn. Everything else from personal finance stems from that. Frugality? That’s all about spending less. Career building and entrepreneurship? Earning more. Investing? Earning more (and a bit of spending less, too). If you constantly use that rule of thumb as your guide, you’ll do just fine.

Finally, we’re not alone in this struggle. I often look at others and think, “They really have their head on straight.” Meanwhile, others look at me and think the same thing. What does that all add up to? We’re all in this together, making little mistakes, but largely following a strong financial path.

If you’re sitting there worried about your financial plan, you really only need to ask yourself a few things. Are you spending less than you earn? Are you actively looking for ways to spend less and earn more, and practicing some of them? Are you protecting yourself against a big increase in spending or a big drop in earnings in the future? If you’re doing these things, rest assured – you’re in pretty good shape.

Every few months, to fulfill the requests of a vocal group of readers, I list the four or five books I’ve read most recently (besides the ones directly for The Simple Dollar), along with my brief thoughts on them. Here we go…

Cryptonomicon by Neal Stephenson is the book I’m currently reading (in fact, I’m just starting it) as a prelude to tackling Stephenson’s “Baroque Cycle” trilogy. I’ve read this one several times and it’s one of my favorite science fiction novels.

Theodore Rex and The Rise of Theodore Roosevelt by Edmund Morris are two parts of an amazing biography of a fascinating man. If you’ve ever been intrigued by Roosevelt, these are books well worth reading.

Lonesome Dove by Larry McMurtry is the single best Western novel I’ve ever read – and perhaps ever written. I’ve read it over and over again.

God’s Politics by Jim Wallis attempts to lay out a road map for more progressive Christians to get involved with politics. While the idea is appreciated, I think it’s much harder to get the more progressive Christians to get involved, as most progressive Christians tend to practice their faith quietly (at least, that’s been my experience).

Yep, I spend a lot of time reading.

10 Reasons You Should Never Pay Off Your Mortgage Ric Edelman is the one personal finance “guru” I’ve entirely avoided on The Simple Dollar. Why? He makes some good points, but they’re mixed in with some huge assumptions, and if you blindly follow, you can get burnt. If you are willing to read what he says and actually analyze it (like what this article does), he’s worth reading for an interesting take on things. (@ my money blog)

Free Shopping at Walgreens I agree that Walgreens sometimes has astounding deals if you pay attention. (@ wise bread)

Build Wealth With A “Virtual Employer” This is a rather creative way to find a psychological stick to encourage yourself to save money. (@ get rich slowly)

The Simple Dollar Retro: I’ve Loaned My Friend Money And Now It’s Eating Me Up Inside Don’t. Loan. Money. To. Your. Friends. If you need to get them out of a financial pinch, give the money. Loans turn your friendship into the same relationship you have with your mortgage handler – is that what you call friendship?

Each Sunday, The Simple Dollar reviews a personal productivity or personal development book.

One of the most profound challenges in my life – and in the lives of a lot of people caught up with what seems like an endless list of demands – is staying happy. For the most part, I do a solid job of it, but there are times when I feel overwhelmed and disheartened by all of the demands crunching down on me.

Stumbling on Happiness argues that much of our own happiness comes from our personal ability to imagine our future, and our evaluations of that future do quite a bit to determine whether we’re happy or not. This holds true from the big things (what will I be doing a year from now?) to the little things (I don’t want to order the same food Jenny is ordering – even though that’s what I intended to order – so I’m going to order something else).

Does this book make valuable points about the general state of being happy that we can apply to our own lives? Let’s dig in and find out.

Wandering Through Stumbling on Happiness

1. Journey to Elsewhen
The book opens by addressing the fact that much of our thinking involves predicting the future. This goes from thinking things like “I wonder where he’s going with this paragraph…” to “if I continue to accelerate, I will get ahead of that car next to me.” Much of this thinking comes down to two elements: next, which is short term prediction like that person in the car I just mentioned, and later, which is when a person tries to envision their future a year from now.

Like many people, I spend some significant time planning my future. I imagine myself watching my children grow up and eventually moving deep into the country. I imagine growing old with my wife. I imagine buying a van in a couple of years. These are all things I envision when I think about the future, and I spend a lot of time trying to steer my boat in that direction. The only problem is that life isn’t that simple. Likely, somewhere between here and there, something will change and that’s not what I’ll wind up doing. Maybe my wife’s transmission will fall out of her car tomorrow. Maybe I’ll get a book deal with a $500,000 advance. The point is that I’m steering my ship down a river and trying to pull it in one direction, but the current is far more powerful than my boat.

2. The View from in Here
Happiness is far too broad and intense to be easily defined in words – we often think of it as one of those things that is just understood rather than described. Yet happiness is different for different people. Gilbert uses the example of conjoined twins named Lori and Reba. If you think about being a conjoined twin, it seems like a miserable existence, but Lori and Reba are actually quite happy being conjoined and they wouldn’t have it any other way. Why?

Take a set of experiences in your life and put them on a scale of 1 to 10, where the 10 is the greatest happiness you’ve ever experienced. For most people, experiences above a 2 or a 3 put them in a positive mood. Now, imagine a piece of your favorite kind of cake. Where does it rank on that scale? For some people, it might rank a 3, or a 5 – it depends on a lot of different factors. For Lori and Reba, it might rank an 8. Why? Their definition of a “10″ on the happiness scale is quite a bit different than your definition of “10″ on the happiness scale. Because of that, the positive attributes of being conjoined – the aspects of that intense kind of physical and emotional closeness with someone – rank very high on their personal happiness scales, and they are loathe to give that up.

3. Outside Looking In
Happiness (and other emotions) are purely subjective – it’s impossible for us to know how happy an event makes someone else because it varies so much from person to person. Thus, emotions are notoriously difficult to actually study. However, accepting three premises takes the edge off of the difficulty. The first premise is that all measuring tools are imperfect, and that if you expect perfection from any instrument, you’re going to be disappointed. The second premise is that real time reports of an individual aren’t as subjective as you might think, as consistent language goes a long way towards minimizing distractions. The third premise is that by realizing that it’s imperfect and accounting for that, you can go a long way towards making studies more accurate.

These ideas make it possible for people to study human emotions even though their variety from person to person can be great. We can learn about common triggers for happiness, chemical reactions in the mind, and so on, making something as subjective as human emotion a somewhat objective thing to study. In other words, one actually can study human emotion, as varied as it is, with some basis in fact.

4. In the Blind Spot of the Mind’s Eye
The story opens with the tales of Adolph Fischer (an anarchist executed for his cursory involvement with the Haymarket riot) and George Eastman (founder of Eastman-Kodak). Adolph lived a rather depressing life, but appeared to be elated when executed. Eastman lived a truly great life in many ways, but committed suicide alone. Why?

The difference is that emotions are often merely the influence of a lifetime of experience. In the case of Adolph, he was dying as a martyr for a cause he believed in – and he may have realized this as he was about to be hung. Eastman was on the downward slide of a great life and was suffering from a great deal of physical pain. The point is that the moment of death, a common experience for the two, was prefaced by very different feelings and reflections from the people involved. The chapter illustrates that our mind does this in all sorts of different ways, most interestingly in the case of short term memorization (of which the book gives a few examples you can try yourself).

5. The Hound of Silence
Here, Stumbling on Happiness states that it is much easier to notice the presence of something than to notice the absence of it. This seems like common sense, but there are a lot of interesting applications of this effect. For example, when you imagine the future, there are a lot of details thaht you never even consider, and that the further off the future that is imagined, the less detail you use when you imagine it.

I found this point to be profound when thinking about planning and personal finance – and it makes a lot of sense. It’s much easier to visualize your life one year from now than it is to visualize your life fifteen years from now. Because of that, it’s much easier to plan financially in detail for that one year destination than for that fifteen year one. That’s why people often just put money into their retirement account and don’t really even think about it until it gets close – it’s far enough off that it seems vague and grey.

6. The Future Is Now
Even more interesting, people tend to imagine the future as being as similar as possible to their lives right now. Stumbling on Happiness offers a great example of this from the “World of Tomorrow”-esque books of the 1950s, in which the world seemed like a mix of a 1950s sitcom and The Jetsons. In other words, when you imagine the future in fifteen years, most of the details are filled in based on the world around you right now.

For example, when I imagine the future, I imagine it with my children in it, period. Sure, they’re older than they are now, but they’re always a presence. I imagine them doing things like I see children doing now: reading, playing outside, even playing on the Wii. But is this exactly how their later childhood will be? Probably not – there are likely to be some changes that I don’t foresee, both in society and in my own personal life, between now and then.

7. Time Bombs
Similarly, people tend to constantly compare the present to the past and the future to the present, as though what has already gone before is an absolute arbiter of whether what is to come is good or not. For example, people would prefer to take a lower paying job that continually gets small raises than a higher paying job that gets small pay cuts, even when the total pay from the higher paying job is far higher than the lower paying one. Why? The lower paying job looks better compared to the past of that job.

It’s a comparison trick, really – a quick way for our minds to find what seems like the best deal. That’s why a wine seller will often stock a few bottles of extremely expensive wine that they don’t intend to actually sell – it makes the other wine look like a great deal by comparison, whether it is or not. Look around the next time you’re at a luxury shop – there are usually a couple items that are quite expensive highlighted, while a lot of items are at a much more palatable price point. The store doesn’t really intend to sell the expensive item at all, instead just intending for the less expensive items to seem more reasonable in price.

8. Paradise Glossed
Here, Stumbling on Happiness makes an interesting case for limited optimism in most people. In other words, almost everyone views the neutral world as being generally good, but not overly great. It’s essentially another trick our minds play on us, because if we viewed the world as it actually is, most of us would never get out of bed in the morning, but if we succumbed to how we’d like to believe the world is, we’d all be daydreamers and have a difficult time functioning in life.

Most of us are somewhere in between those two extremes, with variations in both directions. In fact, the phrase “rose colored glasses” is actually pretty apt: they shade the world, but don’t prevent us from seeing the world.

9. Immune to Reality
In fact, we use a lot of tricks to delude our thinking, and quite often these tricks add up to a misrepresentation of the way things actually are; instead, we see things as we would like to see them. This is often why a flower from an unknown suitor is a lot more fascinating and memorable than a flower from a known suitor – we can add whatever details we like to the unknown one and can spend time imagining all sorts of things.

This is also why people try so hard to explain away bad things that happen to them, like a job loss. They’ve built up a picture of how things are in their mind using a lot of tricks, and this picture is hard to let go of, even when reality intervenes. In fact, explaining things away is the normal reaction for people, and it often takes significant “work” to not just try to explain away negative events and seek out the root cause.

10. Once Bitten
This portion of Stumbling on Happiness focuses on how we remember events, including a thorough look at the peak-end rule. In a nutshell, the chapter concludes that people often remember the peaks and valleys of an experience most vividly, and these peaks and valleys sometimes overrule the remainder of the experience.

I liked the movie example, and I found that this was true for my wife. She claimed for quite a long time to absolutely despise the movie Pleasantville, while I largely recalled her liking it. When we rewatched it later, we found out that we were both right – she liked almost the entire movie except for the closing five seconds of the final scene, which she felt let down the whole movie. This one peak negative experience overshadowed the positive of the other two hours of the movie for her.

11. Reporting Live from Tomorrow
Stumbling on Happiness concludes with a chapter that argues that one final major factor of happiness is other people, but not necessarily in the way you might think.

For example, Gilbert argues that some ideas that are useful for the perpetuation of the human race are not entirely accurate. For example, the idea that children are great. I’ll be the first to say that my children are a very central part in my life, but I’ll also admit that many parenting tasks are drudgery: discipline, changing diapers, and so on. Even more interesting, parents often show up on psychological tests as being personally rather unhappy during the period where children are in the home, from the birth of the first child to the departure of the last. Yet many people reflect on parenting as being great. Why? This belief is needed for the perpetuation of humanity, but may not necessarily be true for many individual people.

Buy or Don’t Buy?

I found Stumbling on Happiness to be an interesting read. If you’re looking for an interesting bedtime book to read, one that can be digested a few pages at a time and also provide some interesting insights, Stumbling on Happiness is probably a great book to pick up.

However, aside from the last two chapters, there’s not a whole lot in Stumbling on Happiness that is deeply applicable to one’s life. If you’re looking for a book that will explain to you how to be happy, this isn’t it.

For me, Stumbling on Happiness was largely what I expected – and a little more. There are many life situations that I take for granted that adjust the things I view as joyous – I have had a blessed life, and that has often led me to have a higher threshold for happiness than many people. Does this affect how I should raise my children, or how I should live my own life? There are a lot of things to reflect on in this book, and for that, I found it to be quite a worthwhile read, even if it didn’t give me a lot of answers.

This is the twenty-eighth part of The Simple Dollar Book Club reading of Your Money or Your Life. Want to know more?

Finally – the last section of the book itself. Although this “book club” isn’t quite finished, this is the last piece of actual text from the book, as today’s reading finishes up the ninth and final chapter, leaving only an epilogue (which just recites the content of the book), resources, and notes.

Your Money or Your Life finishes up with several small pieces, the first one being a brief discussion strongly in favor of a cushion (one of the three pillars from yesterday). A cushion, if you’ll recall, is an emergency fund – an amount of very liquid cash that you have on hand in the event of a major crisis.

Cache, on the other hand, is much more interesting. When you reach the crossover point and quit your “real” job, Your Money or Your Life argues that your personal expenses will drop to at least some degree, leaving you with a continuing surplus even after detaching from your job. This is cache, which is effectively money you can channel into your later activities. For example, let’s say you quit your job so you can start making wooden rocking horses in your wood shop, selling some to rich families and donating others to all kinds of charities. The business would likely pay for itself and a little more, but the cache would allow you to keep making horses even during December, when you might give away every rocking horse you make.

Alternately, you might just spend the money entirely on charitable giving, or use some of it to pay for equipment for whatever you do. The point is that cache will exist in your post-financial independence life and it’s money you can use to really make a difference in the lives of others. After all, you are truly financially independent, right?

Your Money or Your Life closes with a brief discussion about a potential future where everyone jumped on this train, and looks at the societal changes it would bring. Interestingly, it looks like a capitalist boom – unemployment drops, productivity rises, urban sprawl and urban decay lessen, volunteerism and social activism grow, and consumerism decreases. Sounds like a pretty good world to me; I think that if everyone jumped on board the full philosophy of Your Money or Your Life, it might be bad, but an increase in people doing things this way might be good.

Tomorrow, we’ll look at the “Resources” appendix to see if there’s anything else of interest out there related to this book. This section appears on pages 337 through 343 in my paperback version of the book.

The northern Midwest often faces some very rough winters, often including periods of many days with temperatures below zero Fahrenheit (-18 Celsius). Since I’m about to face my first winter as a homeowner, I spent some time contacting many of the homeowners I know in the area and asking for tips on reducing winter heating bills, and I collected eight of the best.

Use a programmable thermostat Your house doesn’t need to be as warm at night as it does during the day, so install a programmable thermostat and use it to drop that temperature during the time when you’re asleep and when you’re not at home.

Wear clothes in layers This is extremely effective. Just wear lots of layers of clothes. I often wear a tee shirt, a long underwear/insulation shirt, a long-sleeved tee shirt, and a sweatshirt, and just peel off layers or add them as needed, and you can re-wear the outer shirts a few times without washing them.

Keep lots of blankets around Just keep a few blankets in each living room and bedroom so that you can cover up with them. Generally, I only really get cold when I sit still, and thus blankets help with that.

Air seal your home If the temperature difference between the inside of your house and the outside is seventy degrees, even a small air leak can make a huge difference in the amount of time your furnace has to run. Sometime in the fall (or even early in the winter), air seal your home. Go around your house looking for places where you can feel a draft or feel cold air leaking into your home, locate the source, and seal it. Here’s a guide for getting started.

Install EnergyStar windows When you replace your windows, spend a little extra and buy energy efficient windows that minimize the loss of heat through the windows. This also helps during the summer, where the efficient windows slow down the heat from entering your home from outside.

Cook at home Seriously, firing up your oven and baking a casserole makes for a cheaper meal than eating out, plus that heat spills over and helps with the heating of your home. While it’s not hugely efficient, you’re basically just taking advantage of the synergy between your oven and your furnace to your benefit.

Place a “solar collector” in your windows that collect sunlight. If you have windows that receive significant sunlight in the winter, put a simple “solar energy collector” in them to draw some of the heat. Just get some aluminum foil, some cardboard for backing, some black paint, and a bit of duct tape. Paint a big sheet of aluminum foil black, tape the black foil to the cardboard, then put this in the window with the black side facing out, leaving an inch at the top and bottom for air flow, by taping it to the window frame. This can generate some impressive heat, actually, and can help quite a bit for keeping rooms warm in the winter.

Don’t close off unused rooms. If you try to close off unused rooms in your house to save on heating, you’ll often find that the “cool” room isn’t that much cooler than before and your bill probably won’t change at all (and may even go up). Why? Your home’s heating system was designed to heat your whole house, for starters, and you’re also trying to leave a cold room inside your exterior walls, meaning it will draw heat from other rooms and cause them to chill quicker.

This is the twenty-seventh part of The Simple Dollar Book Club reading of Your Money or Your Life. Want to know more?

According to Your Money and Your Life, the three pillars of financial independence are capital (the amount you have invested), cushion (a cash reserve/emergency fund), and cache (your saving habits and frugality). This section focuses on the capital and is perhaps the most controversial part of the entire book.

Dominguez and Robin offer nine basic criteria for investing, and these are quite interesting:

1. Your capital must produce income.
2. Your capital must be absolutely safe.
3. Your capital must be in a totally liquid investment.
4. Your capital must not be diminished at the time of investment by commissions, loads, and fees.
5. Your income must be absolutely safe.
6. Your income must not fluctuate.
7. Your income must be payable to you, in cash, at regular intervals.
8. Your income must not be diminished by charges, management fees, redemption fees, etc.
9. The investment must produce this regular, fixed, known income without any further involvement or expense on your part.

If you read through those pieces, it’s pretty clear that Your Money and Your Life does not recommend most of the common investment tools of the modern era. By these critera, stocks don’t fit the bill in any way, shape, or form.

Obviously, this isn’t going to cut the mustard if you need 10% growth to reach your goals. There is no investment opportunity that returns that 10% with that level of reliability – it just doesn’t exist. Because so many investors shoot for high returns, they ridicule this advice because it doesn’t add up to the numbers they need.

This advice, actually, leads directly to investing in U.S. treasury notes. Those completely fit the bill for this description and return 3%-6%. Another option is a very high yield savings account, again one that returns a consistent percentage. These options are very close to rock solid and pay out very regularly and consistently, much like a paycheck. The good part of such investments is that the returns are going to be the same (3%-6%) whatever the stock market is doing. The bad part is that it’s impossible to get double digit returns in a single year with such investments – you can’t do it.

That’s why this is good investment advice if you plan on living strictly off of your investments, but not so good if you’re trying to grow your investments for wealth. That’s why retirement portfolios are very heavy in stocks when you’re young, but gradually shift to bonds when you move towards retirement, eventually being dominated by bonds. They’re stable and safe and return a steady amount – but they don’t grow like gangbusters, ever.

I don’t believe this is intended for investment advice for people looking to grow their wealth – instead, it’s for people who want to live off of the income of the money they’ve saved up and don’t have a lot of interest in growing it further, but they want long-term stability. For that, I think this advice makes sense.

Tomorrow, we’ll finish up the ninth chapter, “Now That You’ve Got It, What Are You Going To Do With It?” starting with the header “Cushions Make For Smoother Landings.” This section appears on pages 318 through 327 in my paperback version of the book.