Every other Sunday, The Simple Dollar reviews a personal productivity, personal development, or career book.

If you’ve been reading my weekly roundups for long, you know I’m a big fan of the Unclutterer blog and its chief writer and editor, Erin Doland.

I link to Unclutterer frequently because I believe there is a strong connection between clutter and financial problems, since clutter represents having more physical possessions than you can manage and all of those possessions cost money. Plus, dealing with clutter requires a time investment and in our busy lives, time has a very high value.

Unclutter Your Life in One Week essentially offers a “detox” plan for getting clutter out of your home, office, and life, ostensibly in one week. I should say right off the bat that I found actually accomplishing all of the ideas in this book in one week to be impossible. That doesn’t mean the book has value, but you should not expect that all clutter in your life will be gone in one week if you follow this plan. Although, I will say that there is some function of how cluttered your life is when you start and how thoroughly you’re going through your life with the plan.

That being said, the advice in this book is stellar, in my opinion. Let’s dig in and look at some of the specifics.

The Foundations
Most of us have lives that are overbooked, overworked, and overstuffed. We have more things that we want than we possibly have time for. I’m certainly in this boat myself – I’d trade all the material items I have for another four hours in my day.

In our rush to jam even more into our lives, our lives become inherently complicated. We accumulate more things than we can deal with and some things begin to slip simply because there aren’t enough hours in the day. Those “things that slip” often take the form of clutter – items in our lives that we simply don’t have the time to process. These tend to build up throughout our lives, filling up our homes and our day planners with a backlog of things that need to be taken care of and things we don’t have the time to actually enjoy or use.

Dealing with clutter is an intense process, because it not only requires dealing with this backlog of stuff, but it also requires dealing with the elements in your life that are causing clutter.

Monday
Monday is the best day of the week to begin establishing new routines. It’s also a good day to tackle the “firsts” – the elements of clutter you face first throughout your day.

For example, many of us face a cluttered closet in the morning when we wake up, so a good first step is to get your clothes in order. If you have more clothes than you can adequately fit in your dresser and closet, you need to eliminate some.

At work, the first thing we often see is our desk or workspace. Figure out a place for all of the stuff that you see – and don’t be surprised if the space for many of those things is the trash can.

Tuesday
Tuesday is the most stressful day of the week, so it’s the best time to tackle the areas of your life that cause you the most stress and require the most work to keep up.

At home, Erin encourages decluttering the bathroom (with the goal of being able to easily find all of the things you need but tossing the things you don’t actually use that tend to fill up your bathroom closet) and also streamlining your household chores. I find in my own life that when I have a household chore routine, things are more likely to work well.

At work, one should take a look at filing all of their papers so that the documents one needs can easily be found and the less-important things are out of the way. At my previous job, I found that having a filing cabinet split into two pieces worked for me – a single drawer for stuff I actually used sometimes and the rest for stuff I needed to retain but would rarely look at. 99% of the time, I’d just look in that one drawer and find what I needed.

Wednesday
Wednesday is “hump day” and a perfect day to focus on communications and processes in our day.

At home, take a look at your kitchen and your bedroom. For us, at least, the kitchen alone can be a major project for de-cluttering. One big tactic that works is simply reducing your kitchen implements, replacing fifteen low-quality single use items with one high quality item that simply does the job. You don’t need a butcher’s block, you just need one really good chef’s knife, a bread knife, and a paring knife. You don’t need tons of casseroles and Pyrex, you just need a few high-quality French ovens. A more streamlined shopping plan helps, too.

At work, re-evaluate your commute and your communication processes. How do you get to work? Does your trip fill you with unnecessary distractions and angst? Look for the least stressful way to get to work. When you’re there, look at how you communicate with others. Does it happen in an orderly fashion with appropriate emotions? I find that “communication sessions” work well for me, where I spend a period of time each day just handling communiques, then I turn off those communication channels to allow myself to focus on other areas.

Thursday
On Thursday, the focus should be on organizing your living spaces at home and focusing on your workflow and processes at work.

At home, look at the places you spend your time during the day. For us, that means our family room, and the obvious place to look there is our entertainment center, which is often a mess thanks to kids pulling out DVDs and playing with various items. Another spot to look is our book collection in the laundry room, which could sorely use some time.

At work, examine how you work on projects. Do you have difficulty completing them? Do you have too many projects? Start using the “five whys” and dig into the reasons for this. Quite often, there are some simple things blocking you from a much better workflow.

Friday
Friday’s focus is solely on uncluttering your schedule. Most of us have schedules that are so full to the brim with activities that we scarcely have time for important things in our lives. How many of you read the previous activities and thought, “That sounds awesome, but I don’t have time for it!”

The best way to do this is to simply prioritize the things you’re doing. Figure out what elements are truly of low priority and either treat them as such or find ways to completely eliminate them. Then, look at the higher priority things and look for ways to compress them – perhaps, instead of watching a show live on Tuesdays, you can record it and watch it commercial-free on Wednesdays. Perhaps instead of unwinding after work, you can spend a brief bit of time truly relaxing and then get on with the things you need to do.

The Weekend
The biggest benefit of unclutterinig is that it truly frees your weekend. If you have established routines for handling everything throughout the week – and you’ve uncluttered your time enough to allow for it – your weekends go from being “catch up” time to being big blocks of free time with which you can do whatever you want.

That’s really the reward, isn’t it?

Is Unclutter Your Life in One Week Worth Reading?
Absolutely. This is the single best book I’ve ever read on organizing your life. Much like my favorite book on time management, Getting Things Done (and, incidentally, Unclutter Your Life in One Week has a foreword by the author of GTD, David Allen), Unclutter Your Life in One Week shines because of the small implementable details, like the few pages devoted to how to organize your clothes and fold your shirts (seriously – I started using that method and it works really well).

If you were to do everything in this book, it would take much longer than a week, without a doubt. However, the modularity of it allows you to pull out pieces to tackle the most egregious parts of your life and then gradually move to other details as the “de-cluttering” advantages become clear.

This book has found a semi-permanent home on my bookshelf as I move towards decluttering some of my own life (like that nightmarish junk drawer and the train wreck that is my closet and, frankly, my time schedule).

Every other Sunday, The Simple Dollar reviews a personal finance book.

Over the years, I’ve professed a ton of admiration for Thomas Stanley and William Danko’s excellent personal finance book The Millionaire Next Door. It was the first book I reviewed on The Simple Dollar and it’s still one I turn to regularly for ideas and inspiration.

One of the most interesting themes in The Millionaire Next Door is the idea that you really can’t judge a book by its cover when it comes to personal wealth. In fact, quite often, public displays of affluence disguise a debt-ridden underaccumulator of wealth, while many exceptional accumulators of wealth possess ordinary, often seemingly outdated things. The underaccumulators of wealth focused on appearance, while the exceptional accumulators of wealth focused on how things functioned.

Thomas Stanley expands upon that single idea here in Stop Acting Rich. The entire premise of the book is simple: lasting wealth and happiness is rarely found through buying expensive things. Throughout the book, Stanley relies on extensive research of people who have acquired financial security – much the same group as in The Millionaire Next Door – to illustrate and reinforce his points, painting a pretty convincing case of the actual buying habits one should adopt if one is seeking lasting personal wealth.

1 – The Difference Between Being Rich and Acting Rich
Stanley opens Stop Acting Rich by defining a group of people he calls “aspirationals” – people who choose to act like the super-rich, but don’t have the financial resources to truly back it up.

The “aspirationals” and the truly rich (people with truly exorbitant wealth) tend to spend a lot of money. Stanley reviews these spending habits in detail here – think yachts, country clubs, cases of vintage wines, private jets, BMWs and the like. To put it simply, “aspirationals” often have to sacrifice every dime they have to appear rich, leaving them incredibly vulnerable to losing everything.

What’s interesting is that this “aspirational” and “truly rich” phenomenon continues all the way down the money scale. In many neighborhood, there are “aspirationals” – people who are pushing themselves into financial ruin to keep up appearances – and people who can actually afford to live there.

The solution to financial success is pretty simple – stop being an “aspirational.”

2 – Everything You Think about Rich Is Wrong
When you step back and look at “aspirationals” from an outsider’s perspective, an interesting phenomenon occurs. Aspirationals are more common than the truly rich by far, so our “pop” idea of what it means to be rich actually comes from people who are financially poor and are making reckless decisions for their future.

Those aspirationals are seeking respect from the wrong group of people. In truth, it doesn’t matter at all what the random person on the street thinks of you, yet it’s the respect of the random person on the street that aspirationals desperately seek.

“But what about dressing for success and the like?” The only people who you should focus on impressing and winning the support of is your professional peer group and community. Their respect is what will actually impact your life. In many – if not most – professional communities, the watch you wear or the car you drive doesn’t matter one little iota.

3 – Do the Shoes Make the Man?
Many people argue that by doing things like dressing for success, they’re creating the groundwork for success. People will trust and respect them and money will flow their way. So they focus on the material elements – they focus on the perfect shoes, the perfect suit, the perfect handbag, the perfect car, and so on. After all, gotta look good, right?

Yet, while that person is focusing their energies and resources on appearing rich, others are focusing their energy on building the skills that will pay the bills. While one person is buying expensive shoes and keeping up appearances at the country club, the other person is practicing their speeches and coming up with a better business plan.

In the end, one of these two people will find lasting wealth. Will it be the glossy suit with nothing underneath, or the person who put in the time to prepare?

Don’t put the appearance of success before success, or else someone who is actually putting in the footwork will grab that brass ring away from you, leaving you with nothing but a mountain of debt. Focus on the skills that pay the bills, not on the bills that bring more bills.

4 – Brother, Do You Have the Time?
Want to know why you’ll often read articles or hear about people who wear expensive things getting extra attention? It’s because having high-end items makes you a target for people who want to drain even more of your money.

Think about it. If two people walk into a jewelry store, with one person dressed in normal clothes and another person dressed to the nines and wearing a $10,000 watch, which one do you think will get more attention from the salespeople – and thus more encouragement to buy a more expensive item than he or she intended to buy? Such “attention” is the type of attention that causes you to walk out of a store with an overpriced item.

If you value your money, you’re better off not appearing affluent in public.

5 – Keeping Up with Your Spirits
Here, Stanley focuses in specifically on one type of product – sspirits – to make a greater point about purchasing habits. People who buy high-end wines and spirits do so because they believe that having a particular brand – a brand that’s been built up with a lot of careful marketing – of liquor will somehow enhance their satisfaction with their lives.

In truth, an expensive brand is often of debatable quality as compared to the “bang for the buck” choice. The premium paid for a luxury brand may offer a bit more quality, but the minute increase in quality is rarely worth the extra price. What people pay for is the “cachet” – the idea that this particular brand will contribute more to the quality of their life than the other brand.

And that’s called marketing, my friends. Nothing more, nothing less.

6 – The Grapes of Wrath
Stanley discovered an interesting correlation between the net worth and the amount people spent on wines. Ignoring the outliers, the more a person spent on a bottle of wine, the lower their net worth was.

Why the focus on wine? More than almost anything else, wine is a prestige-oriented product. There are many, many wines with strong tasting scores well under the $10 threshold, yet many people who are “aspirationals” tend to seek out the prestige wines – vintages with exorbitant costs that are only marginally better than the $10 versions and, even worse, actively turn their noses up at the lower cost vintages.

Such snobbery has a dual effect. Not only does it sap you of your financial strength, it also can cause unwanted negative consequences. Stanley relates a tale in which a person thought they were showing off high class and sophistication by turning up their nose at the $12 wine offered to them and brandishing their own expensive vintage, but in the eyes of the wine offerer, the person was being downright rude and his actions cut off a potentially useful relationship. To put it simply, trying too hard to appear affluent can cut off relationships.

7 – The Road to Happiness
Among millionaires, what automobile manufacturer has the highest loyalty rate? The highest percentage of ownership? The most recent buys?

One might expect to hear names like Mercedes-Benz and BMW here, but in truth, the answers are Chevrolet, Ford, and Toyota, respectively. In other words, millionaires aren’t the ones buying the expensive cars. Who is? The “aspirationals” – the broke people pretending to be their idea of what a millionaire is.

You can actually judge people by their cars. If you see a shiny new Mercedes rolling your way, it’s likely that the person inside isn’t rich, they’re just pretending to be rich.

8 – Geeting Out of the Poorhouse
The size of a home is a better predictor of the size of one’s mortgage than the size of one’s net worth.

Stanley actually draws this correlation statistically in this chapter, as well as relating that ratio of financial assets to home value to one’s state of happiness. Guess what? The lower that ratio is – meaning that you’ve got a mortgage so large that your net worth is significantly lower than the value of your home – the less happy you are with your life.

Instead of buying what you think you need, focus on buying what you actually need. We did this very thing at our home, where our two children share a bedroom (and soon the three of them will). They don’t need a bedroom to play in – that’s what the family room is for. Why have that unnecessary extra space? Just so we can store more stuff we don’t need?

9 – All that Glitters Is Not the Millionaire’s Goal
Accumulating wealth is an unhealthy goal in life. A person is much better off with other goals in their life.

Of course, the ability to enjoy all that life has to offer without the need to spend exorbitantly on stuff is a key part of being able to accumulate wealth. Wealth isn’t accumulated on an elaborate European vacation – it’s accumulated by spending a summer vacation camping and visiting museums. Wealth isn’t accumulated with a country club membership – it’s accumulated with a walk in the park with people that you want to be around. Wealth isn’t accumulated from rich mahogany and many leather-bound books – it’s accumulated from a home you feel comfortable in and books you actually read, probably checked out from the library.

Is Stop Acting Rich Worth Reading?
Stop Acting Rich is basically just a somewhat more action-oriented but perhaps slightly less rigorous and thought-provoking book than The Millionaire Next Door. They’re very comparable, as they cover many of the same topics.

From my perspective, it felt like The Millionaire Next Door was broader in scope, while Stop Acting Rich focused in on more specific behavioral issues. For some, that may make Stop Acting Rich more worthwhile; for others, perhaps not.

For me, I didn’t feel like Stop Acting Rich surpassed the original at all. Perhaps it was because the first book introduced the ideas, but this often felt like a re-hash in places, albeit of some excellent ideas. If you’ve never read The Millionaire Next Door, Stop Acting Rich would be an excellent read – if you have, it’s probably redundant.

The Simple Dollar has reviewed hundreds of personal finance, personal growth, and career books. Please check out the full list of Simple Dollar book reviews, alphabetized for your convenience.

Every other Sunday, The Simple Dollar reviews a personal development, career, or entrepreneurship book.

Knowing how to be a leader – and using that skill from time to time – opens doors for you no matter what you’re doing in life. It helps your career. It helps your social standing. It creates a positive reputation for you, one that often precedes you. It can even help your family life and personal friendships. In short, leadership can be truly rewarding.

The problem with leadership, though, is that the vast majority of people don’t know how to actually be a leader. For a small number of us, leadership comes easy – a natural extension of who we are. For the rest, though, it’s not obvious at all. We’re held back by our own seeming desire for simplicity (though, sometimes, it’s simpler to lead) and our own lack of self-confidence or sense that we’re not leaders at all.

A long time ago, I was forced into a leadership position on a project that I felt completely unprepared for. A very kind friend in a high place mailed me a copy of this book – Warren Bennis’s On Becoming a Leader – and encouraged me to give it a read. The ideas in this book helped me to step up and actually make the most of the situation as it was handed to me and, since then, I’ve recommended it to several others (as I did in a recent Reader Mailbag, actually).

What makes this book so compelling? Let’s dig in and take a look.

Mastering the Context
Every situation in which one is called to be a leader has some sort of context. The people involved are part of the context, as are the specifics of the situation. Quite often, leaders become too tied to the context of the situation and, as a result, come up with pretty poor leadership decisions. Bennis offers several good and bad examples of how leadership can be destroyed by context. For me, the most potent example was the presidency of George W. Bush – in the context of his political ideology and of the disaster of 9/11, he made choices that were perhaps not the best leadership choices for the United States (I don’t think anyone would argue, whether they be liberal or conservative, that mistakes were made during the Bush years). A positive example of stepping outside of context is Norman Lear – the creator of the seminal sitcom All in the Family. He took the context – sitcoms of the 1960s – and looked not at a situation full of rules, but instead a situation where many of the rules could be broken. That’s what a leader does – he finds ways to break away some of the context, opening up new areas for success. (Incidentally, I think this is why great leaders also have a big dash of creativity.)

Understanding the Basics
Here, Bennis identifies a pretty large handful of traits one will find in a leader: a guiding vision, passion, self-knowledge, candor, maturity, trust, curiosity, and daring. Bennis argues that most of these traits are not ones people are simply born with – they’re usually self-made by a person who pushes themselves and wants to excel at leading others. He goes on to distinguish that there’s a big difference between merely being a manager and being a leader – in fact, he argues that, quite often, an MBA makes a person a good manager but a pretty poor leader. A manager manages and maintains the status quo – a leader leads people somewhere great.

Knowing Yourself
In order to lead, you must know yourself intimately. You have to know what you’re truly capable of and what you must ask others to help you with. Without such intimate self-knowledge, you can never effectively lead because you’re incapable of understanding how to select people to fill the roles you most need filled. Bennis points towards four key lessons one must learn in terms of knowing oneself:

You are your own best teacher. Pay attention to the things that work for you and don’t work for you. Don’t listen to what everyone else says – try things for yourself and see if they fly.

Accept responsibility. Blame no one. If something goes wrong under your watch, it’s your fault, period. Don’t blame others for it – step up and take responsibility. Yes, you can make moves to make sure that this doesn’t happen again, but the failure is your responsibility if you’re the leader.

You can learn anything you want to learn. Knowledge can be acquired by anyone if they’re persistent. Don’t use ignorance as a crutch. Instead, accept that you are ignorant about some things and step up to educate yourself.

True understanding comes from reflecting on your experience. Look back at what you’ve accomplished and try to figure out how you accomplished it. Similarly, look back on your failures and determine what you did wrong to cause that bad result.

Knowing the World
Almost all of the worthwhile learning that people do comes outside the classroom. It comes from losing yourself in an experience, reading books because you want to read them, trying new things because you want to try them, and reflecting on all of this stuff, adding it to your tool belt. People who choose not to do this are actively choosing not to be leaders – they’re happy being managers.

Read a book. Travel. Meet new people. Build a friendship. Find a mentor. Mess something up. You learn from these things, not from rote memorization in a classroom.

Operating on Instinct
Every decision we make in life is based on incomplete information. At some point, we have to decide that it’s good enough and go ahead with whatever decision we have at hand. Our ability to still make good decisions even with incomplete information relies on instinct – a sense of what the right decision is that comes from inside. Often, that voice inside of us is built out of a lot of learning about the world, a lot of experience of both success and failure. Learning trains our instincts so that we can make better decisions with less information.

A leader, in the end, is a person others rely on to make the difficult decisions and set the direction for everyone. A well-honed instinct is key to being that kind of leader, and a good leader relies on and trusts that voice inside of himself.

Deploying Yourself: Strike Hard, Try Everything
Every single one of us fails in life. The difference between leaders and others is whether or not they pick themselves up and try again. Do you face your fears? Do you again try the things you failed at in the past, or do you avoid them like the plague? If you try something and it goes badly, do you avoid it in the future or do you relish the challenge of improving in that area?

To put it simply, a leader does not back down from a challenge. They don’t allow fear to control what they do. Instead, if something is scary or deeply challenging, it’s something they focus even harder on achieving.

One particular quote at the end of this chapter really struck me.

The means of expression are the steps to leadership:

1. Reflection leading to resolution.
2. Resolution leading to perspective.
3. Perspective leading to point of view.
4. Point of view leading to tests and measures.
5. Tests and measures leading to desire.
6. Desire leading to mastery.
7. Mastery leading to strategic thinking.
8. Strategic thinking leading to full self-expression.
9. The synthesis of full self-expression = leadership.

In other words, it all begins with reflecting on your successes and failures and building from there.

Moving Through Chaos
It’s often thought that leaders don’t have the same crises that we do. We think they don’t have to deal with office politics, layoffs, demotions, fighting for promotions, and so on. We think they view the world as a set of chess pieces to play with as they wish, that “strategic vision” means playing games with people.

In truth, most leaders had to overcome a great deal of career adversity to get where they’re at today. The only difference is that, at every opportunity, they took the opportunity to try to grow as a person and improve their instincts instead of complaining and commiserating about their hard luck. A trial by fire can either burn you or forge you – leaders are forged.

Getting People on Your Side
The key to getting people on your side is to be trustworthy and to constantly show that their trust is well-founded. Bennis identifies four key elements of such trust.

1. Constancy. You stay the course for the people that rely on you. When problems come, you handle them, but through it all, you maintain a steady direction and don’t descend into chaotic behavior.

2. Congruity. If you say something, you mean it, and it shows in your actions. If you expect something of your followers, you expect it of yourself first and you follow through with it.

3. Reliability. When it really counts, you’re there for the people who need you.

4. Integrity. When you make a promise or a commitment to someone else, you follow through with it.

Organization Can Help – or Hinder
There are times in which the group you’re intending to lead simply will not be led. If the people involved don’t care or they have a completely different direction in mind than the one you’re providing or the bureaucracy in the system is so intense that no amount of bushwhacking will clear it, no leadership can help the situation.

Instead, a leader should attempt to learn from this situation. What can be done to end the situation as painlessly as possible? What can be done to avoid such situations in the future? Every failure is a lesson.

Is On Becoming a Leader Worth Reading?
On Becoming a Leader pretty much delivers what the title promises. It’s the best discussion I’ve ever read on things a person can tangibly do to improve their leadership skills. If you’re interested in improving them, this one’s pretty much a must-read.

The question comes down to whether or not you personally find it valuable to work on your leadership skills. My perspective is that most lives have avenues that can be improved through leadership – it helps you build better relationships with others in the workplace, in the community, and in one’s family if they’re able to step up and be a leader when the situation calls for it.

The Simple Dollar has reviewed hundreds of personal finance, personal growth, and career books. Please check out the full list of Simple Dollar book reviews, alphabetized for your convenience.

Every other Sunday, The Simple Dollar reviews a personal finance book.

Ever since I first gave it a sincere read-through in late 2006, The Bogleheads’ Guide to Investing has been my go-to guide for investment advice, the first place I turn when I have a question about investing. My paperback copy is now well-worn and thoroughly enjoyed.

Recently, a follow-up (of sorts) has appeared on the scene. This time around, however, the book is more of a collaborative effort, containing chapters written by different authors who focus in on specific topics. What they all have in common, however, is that they are all “Bogleheads,” referring to people who believe strongly in the investment philosophy of John Bogle, the chairman of the Vanguard Investment Group.

To put it simply, The Bogleheads’ Guide to Retirement Planning focuses on a fairly conservative investment philosophy, one that doesn’t involve extremely risky investments or exposure to cataclysmic failure in the face of a market downturn. The Bogleheads’ philosophy instead mostly focuses on careful balancing of one’s portfolio (so that a sudden stock market swan dive won’t ruin your future) and investments designed to match the market at a low cost instead of gambling on a chance to beat the market that has a high cost attached to it.

Intrigued? Let’s dig in and see what the book has to say. I’ve broken this down into individual chapters and have labeled each chapter with the chapter’s author.

The Retirement Planning Process
Thomas L. Romens
THe book opens with a chapter that discusses the difference between saving for retirement – something every adult should be doing as soon as they enter the workforce – and planning for retirement. Saving merely means socking away money into something designed for long-term growth. Planning for retirement, on the other hand, involves knowing in great detail what one’s retirement will look like – standard of living, personal goals in retirement, and what assets are needed to get a person to that point. During the saving phase, a person should sock away as much as he or she can, so that the planning phase is much simpler and less prone to risk (since, without adequate savings all the way along, retirement planning will have to involve significant risk or a significant extension of one’s working life).

Understanding Taxes
Norman S. Janoff
Taxes are confusing (and I believe they’re unnecessarily so). Mostly, this chapter just highlights most of the areas of tax law that are really relevant to individual retirement planning. Since the amount one pays in taxes has a direct impact on how much money one needs to have in retirement (the more taxes you’ll have to pay, the more money you’ll need), understanding taxes is vital. This is mostly just a great little reference to the different taxes that most of us are subject to.

Individual Taxable Savings Accounts
Dan Kohn
The first retirement savings option that’s discussed in the book is the individual taxable savings account. These can vary in type from savings accounts at your local bank to investment accounts at a brokerage house. These all work in more or less the same way – you put in money you’ve earned from your career after taxes, pay taxes on any gains that you make with that money, but you have the freedom to withdraw it and do what you want with it without any additional penalty. Such taxable accounts have one very big advantage – flexibility.

Individual Retirement Arrangements
Jim Dahle
Another option for a person wanting to take ahold of their own financial destiny are individual retirement arrangements, like Roth IRAs. These are accounts you can set up with brokerage houses that take advantage of specific tax laws to either defer your tax payments on your earnings to retirement or, in the case of Roth IRAs, eliminate them entirely. Typically, such accounts are set up directly by you with a brokerage house. Usually, you set up an automatic investment schedule and you’re completely responsible for the account, from investment choices to withdrawals. Thus, such options tend to provide much more flexibility than employer-based accounts (like 401(k)s), but tend to require a bit more effort on your part.

Defined Benefit Employer Retirement Account
The Finance Buff
The title of this chapter refers to pension plans – and if you have one, you’re lucky. Your primary concern should be how these plans are insured against the health of your business. What happens to your pension plan if your business fails? Most modern plans have some sort of insurance against this – often, the plan is run by a third party that specializes in such plans. If you have this plan, it’s usually very easy to understand as it clearly outlines the exact benefits you’ll receive in retirement.

Defined Contribution Plans
Dan Kohn
For most of us, this means 401(k) or 403(b) plans. Such plans allow us to put in pre-tax money (meaning money is taken out of our paycheck before taxes and we only pay taxes on the remainder) and then pay taxes on it only when we withdraw it in retirement. Such plans usually also include some matching funds from our employer, which is essentially free money for retirement. If you can get that free money, get it now – start saving immediately if you have access to matching funds from your employer. If not, you may want to consider your 401(k) or 403(b) plan to be a backup and look at individual retirement arrangements, as they will minimize your tax burden in retirement.

Single-Premium Immediate Annuities
Dan Smith
Annuities are actually a form of insurance, in which you pay a premium regularly over a long period of time in order to ensure some specific amount of income in retirement. Annuities can be valuable tools, but they offer some risk in the form of insurer default (the insurance company going out of business). They also leave no legacy to your children. However, they do offer a solid return on investment provided the insurer is a stable company with a long history.

Basic Investing Principles
Bob Davis
You can’t control the stock market, nor can you consistently beat it over a long period of time (as a small-scale investor, anyway). However, there are many strategies you can use to ensure a stable and steady return on the money you save for retirement. One important part of investing is understanding how much risk you can tolerate, which involves how many years you are away from your goal as well as your personal psychology. Rebalancing (and knowing how to rebalance) your portfolio is also vital, especially as you approach retirement age. Costs are also important – if you can keep costs low, you keep more money for retirement in your own pocket.

Investing for Retirement
David Grabiner and Alex Frakt
In order to invest successfully for retirement, you need to have a plan. That involves calculating exactly how much money you’ll need in retirement, determining how much (realistically) you can safely earn each year in your investments, and then using that to figure out how much you need to be saving each year. Just having a plan isn’t enough, though – you need to implement it and then continue to follow through with it. Take the time to actually write out your investment plan in detail – putting it down in writing makes it concrete.

Funding Your Retirement Accounts
David Grabiner and Ian Forsythe
If the first step is to begin saving, where do I begin? Where do I start putting my money if all of these options are available? The first step is to start living within your means – spending less than you earn consistently – and putting your money towards repaying high interest debt. The only retirement savings you should be doing while doing this is in accounts where you receive an employer match. Once that’s done, move some of the money you were using for debt repayment into other plans. Use a Roth IRA if you’re in a low tax bracket – otherwise, use a tax deferred plan like a 401(k). The chapter goes into great detail about additional options as well.

Understanding Social Security
Dick Schreitmueller
Here, Schreitmueller gives a great overview of how Social Security works today in very readable terms – this can be really useful information for people near retirement age now. However, I find this advice is less and less useful the further you are from retirement, simply because I do not believe that Social Security will be a viable option for retirees in thirty years or so. I’m planning for a retirement without Social Security – if it happens to be there, I’ll look at it as icing on the cake.

Withdrawal Strategies
Carol Tomkovich
The amount you withdraw each year from your retirement accounts doesn’t have to be set in stone at all. It can vary greatly depending on your actual needs – they might be more or less than you expect – and whether or not you’ve found a new job or income stream. Many retirees find that, with so much idle time on their hands, they need to find something to do with their time and, for many of them, that means a second career or a new job. Also, some older folks will realize that if they conserve their retirement savings well, they may be able to pass on a legacy to their children and grandchildren – that legacy becomes very important to them.

Early Retirement
Jeff McComas
Everyone follows a different route to retirement. Few people simply walk out the door and into the waiting arms of Social Security on their 65th birthday. Quite a few people retire earlier than that (or at least jump into a second career). There are several tools people can use to handle an earlier-than-usual retirement: penalty-free withdrawals from a Roth IRA (since you can withdraw the balance at any time), self-employed pension programs, sapping your home equity, and so on. Each option has advantages and disadvantages and are worth exploring on their own.

Income Replacement
Lee E. Marshall
What about the unexpected? What if you are injured, acquire a long-term illness, or unexpectedly die? If your current financial state would cause such events to be completely disastrous, you need to look seriously at insurance solutions to protect you and your family against such outcomes. Long-term disability insurance and life insurance are all important to at least consider and evaluate.

Health Insurance
Lee E. Marshall
On the flip side of that coin is care for illnesses from which you may recover (at least partially) after a period, such as cancer. Again, if you can’t afford the costs for such incidences out of pocket (and most of us cannot), you need to evaluate insurance for such situations. Health insurance and long-term care insurance are both worth investigation to keep your family safe and secure.

Essentials of Estate Planning
Robert A. Stermer
Estate planning can be really complicated. Make sure that you, at the very least, know what durable powers of attorney, living wills, wills, and trusts are and which of those you need to have for your financial situation. It is never too early to do this kind of planning – even a simple will can aid the people who survive you in the event of something untimely occurring to you.

Estate and Gift Taxes
Robert A. Stermer
If you leave behind even a moderately-sized amount of money, there’s a good chance that a significant portion of that legacy will be eaten up by transfer taxes and estate taxes. Such taxes are confusing and often unclear to the layperson. If you are planning on leaving behind a significant amount of money to others, it’s well worth your while to study such taxes thoroughly – this chapter really only gives a brief overview of things and helps you identify whether or not you should dig into the topic.

Seeking Help from Professionals
Dale C. Maley and Lauren Vignec
There are many, many finance professionals out there who would love to have your business as you piece through these issues. Of course, muddying the water are individuals who are simply out to line their own pockets by collecting commissions on sub-par investments, as well as others who are quite happy to run up a big pile of fees. The first step is for you to learn as much as you possibly can without a professional so that you know exactly what you do need from a professional. Once you’ve reached that point, you should be able to formulate the exact questions you need answers for, which you can then take to a financial professional of your choosing. The chapter provides an excellent guide for finding one.

Divorce and Other Financial Disasters
David Rankine
Divorce sometimes happens and it can be a real financial burden. One option is to sign a prenuptial agreement to protect both parties and make the divorce process easier (if it happens). Without it, the best route of attack is to simply incorporate the realities of your divorce into your retirement savings – likely, it means that you’ll have to begin saving a larger portion of your income. Another important note from this chapter: most retirement savings are exempt from the claims of creditors, so if creditors are knocking at your door, don’t strip your retirement savings to appease them.

Is The Bogleheads’ Guide to Retirement Planning Worth Reading?
If you’re of any age and a little worried about your retirement (especially in the light of the 2008 financial mess) and are willing to actually invest the time to learn about what retirement investment means and how it works, The Bogleheads’ Guide to Retirement Planning is the book for you. It’s thoroughly well-written, has a consistent set of ideas behind it, does a great job of breaking down concepts into understandable pieces, and leads right into sensible action.

Admittedly, I’m partial to the book due to the philosophy. My own investing ideas are very similar to those of the Bogleheads – I believe in buying low cost index funds for pretty much any long term investment purpose. The Bogleheads’ Guide to Retirement Planning goes far beyond that, though, explaining why one would do that and how it works in terms of planning for a successful retirement.

Be aware, though – this book is fairly heavy. It’s quite readable, but it’s not breezy beach reading. It’ll take you some time to read through it. But if you give this book your time and attention for several evenings and think about what’s being said in terms of your own life – and then turn some of the ideas into action – you’ll find yourself in a much better place for retirement.

This may just be the newest addition to my bookshelf.

This is the sixteenth of sixteen parts of a “book club” reading and discussion of Keith Ferrazzi and Tahl Raz’s Never Eat Alone, where this book on building a lifelong community of colleagues, contacts, friends, and mentors is teased apart and looked at in detail. This entry covers the thirty-first chapter – “Welcome to the Connected Age” – which appears starting on page 291, as well as some concluding thoughts and links back to earlier entries in this series.

Much of the material up to this point in Never Eat Alone occurs offline, in face to face meetings.

But, as you sit there reading this article, the obvious is true. Many of our interactions today take place online. We’re hyperconnected.

Just fifteen years ago, when I was in high school, I would have to stay home waiting by the phone as people played phone tag to make plans. Conversations were infrequent and the vast majority of socialization happened face to face. Today, most teenagers are in constant contact with each other via texting. The vast majority of their socialization takes place through social networking and instant messaging protocols.

That’s a tremendous change, and it’s rippling throughout our world. Quite a lot of my communication with others happens via email and Skype. Thanks to sites like Facebook and Twitter, people can get to know others quite well without ever meeting face to face.

Ferrazzi digs into this a bit in the closing chapter of the book.

Community and Alliances
As communication becomes easier and easier, alliances and relationships will become ever more important. On page 291:

Rugged individualism may have ruled for much of the nineteenth and twentieth century. But community and alliances will rule in the twenty-first century. In the digital era, when the Internet has broken down geographical boundaries and connected hundreds of millions of people and computers around the world, there’s no reason to live and work in isolation. We’ve come to realize, again, that success is not contingent on cool technology or venture capital; it’s dependent on whom you know and how you work with them. We’ve rediscovered that the real key to profit is working well with other people.

The vast majority of my work is conversation.

My day is usually filled with reading tons of emails and comments. I’ll then take from those emails and comments some ideas on what people are thinking about, and those provide the seed for future articles.

I’ll spend the day working on articles that are seeded by readers. In essence, these are responses – continuations of the conversation. I’ll post them, and they themselves will receive comment.

The conversation continues.

At my previous job, I did a lot of individual work, but there was still a huge amount of collaboration and conversation involved. I would email other workers for assistance. I would communicate with our clients for feedback. I would communicate with my boss when formulating future directions.

Communication is the key to everything. Working well with others is the one skill, above all, that’s valuable today. Master your interpersonal skills and communication skills and you’ve become much, much more valuable, no matter what you’re doing.

The Rebirth of Unions
Ferrazzi forecasts an interesting development on page 293:

Old style labor unions and guilds are showing signs of revitalization. As the outsourcing of jobs outside the United States continues, and more and more of us become free agents, Americans are finding strength in membership to something larger than themselves. We’re giving our loyalty and trust not to our companies but to our peers.

I don’t believe that the idea of what a union was in the twentieth century will continue to hold. Those unions are dinosaurs, large, dying behemoths locked in a struggle of mutual assured destruction with other dying behemoth corporations.

Instead, the future of unions is in actually caring about your peers and helping them to succeed directly. It won’t be some collective bargainer that you pay to negotiate a slightly better wage or better conditions for you. It’ll be a good relationship with the guy in the other department who will help you out when you need it.

I’m about as “free agent” as one can get. Yet, I’m part of an organization much like this – LifeRemix. The handful of people in this small group are peers. We all write (in various media) materials that strive to help others succeed in life. Because of that, we often have similar experiences and utilize similar resources.

By sharing those experiences and resources with each other, all of us in that group benefit. I’ve established great interpersonal relationships with many of them virtually and I look forward to meeting many of those people in the future.

What Is Our Legacy?
After all of this, what are we leaving behind in this world? Ferrazzi digs into this a bit on page 293:

Certainly, some of us will tally success in terms of income and promotions. Others will cite their newfound celebrity or the exciting expertise that they’ve amassed. For others still, it will be the fabulous dinner parties they throw or the aspirational contacts they’ve befriended.

But will such success feel empty? Instead of being surrounded by a loving family and a trusted circle of friends, will you only have colleagues and clients?

Sooner or later, in one way or another, we all will ask ourselves these questions. Moreover, we’ll look back on our life and wonder, What is my legacy? What have I done that is meaningful?

I don’t like to think of my own mortality. Such thoughts make me uncomfortable.

However, I do wonder (quite often, really) what my mark on this world will be.

I’m lucky in that The Simple Dollar has reached a lot of people in a positive way. I’ve read tons of emails from people who have begun turning their financial life around. I also have a book in print and another on the way.

I also have the legacy of my children. I strive to raise them well and I think (or is it hope?) that they’re starting off in the right fashion.

But what beyond that? What can I do with my life that will help as many other lives as possible?

It’s something I puzzle over all the time, and it’s starting to guide me more and more.

Some Final Thoughts
Quite a few people were surprised when I chose to dig so deeply into Never Eat Alone here on The Simple Dollar. After all, this is a personal finance blog. Shouldn’t I be talking about investments or saving money on ketchup?

Here’s the truth. I believe that successful money management comes about as a result of success in a lot of different aspects of life – and one major part of that is the relationships you build with others. Do you have a lot of people you can call a friend, both in personal and professional circles? These people provide companionship, advice, encouragement, and opportunities, almost at every turn.

In short, they’re integral to your career. They’re integral to opening personal and professional doors for you. They’re integral in helping you through the hard times in life.

People without such relationships are often in a tough spot. They have no one to call if they lose their job. They can’t organize a party when they need help re-shingling their roof. They never have the opportunity to meet the leaders in their field because they’re never invited in the door.

That’s the whole point of Never Eat Alone. Successful relationships with other people often make or break the success you experience in your own life, not just professionally, but personally, too.

For those of us who aren’t naturally socially adept, Never Eat Alone is a powerful handbook for doing just that. Even if you don’t agree with all of the ideas and tactics presented, the book is always thought provoking and it’s always pushing in the direction of building more and better relationships with the people all around you.

That, my friends, is a recipe for success in life.

Other Entries
Here are the fifteen earlier entries in the Never Eat Alone book club series. Enjoy!

Don’t Keep Score (chapters 1 and 2)
Build It Before You Need It (chapters 3 and 4)
The Genius of Audacity (chapters 5 and 6)
Do Your Homework (chapters 7 and 8)
Managing the Gatekeeper (chapters 9 and 10)
Share Your Passions (chapters 11 and 12)
Follow Up or Fail (chapters 13 and 14)
Expanding Your Circle (chapters 15 and 16)
The Art of Small Talk (chapters 17 and 18)
Social Arbitrage (chapters 19 and 20)
Anchor Tenants (chapters 21 and 22)
Build and Broadcast (chapters 23 and 24)
The Write Stuff (chapters 25 and 26)
Build It and They Will Come (chapters 27 and 28)
Find Mentors, Find Mentees, Repeat (chapters 29 and 30)

This is the fifteenth of sixteen parts of a “book club” reading and discussion of Keith Ferrazzi and Tahl Raz’s Never Eat Alone, where this book on building a lifelong community of colleagues, contacts, friends, and mentors is teased apart and looked at in detail. This entry covers the twenty-ninth and thirtieth chapters – “Find Mentors, Find Mentees, Repeat” and “Balance is B.S.” – which appear on pages 273 through 290.

Just over a year ago, I wrote an article entitled “How to Find and Utilize a Mentor, No Matter What You’re Doing.” In it, I discussed strategies for identifying a mentor in one’s community and adopting that person as your mentor.

What I didn’t discuss in detail was the value of a mentor. Why would you want to have one?

The most valuable reason to have a mentor, I’ve found, is that a great mentor is a boundless source of advice that actually works. If you manage to get a successful elder statesman as your mentor, they likely have forgotten more about your area of interest than you’ll ever know. That wisdom can be incredibly helpful to you as you start out and grow into your area of interest.

Beyond that, a mentor can be a great source for connections and other resources to help you grow. They can put the word out for your fledgling career or entrepreneurial endeavor.

I believe a mentor is one of the most valuable things a person can find in their career or entrepreneurial journey.

The Historical Nature of Mentoring
On page 274, Ferrazzi puts mentors in a historical context:

No process in history has done more to facilitate the exchange of information, skills, wisdom, and contacts than mentoring. Young men and women learned their trade by studying as apprentices under their respective craftsmen. Young artists developed their individual style only after years working under elder masters. New priests apprenticed for a decade or more with older priests to become wise religious men themselves. When finally these men and women embarked on their own, they had the knowledge and the connections to succeed in their chosen field.

My belief is that the world would be better off if we returned to this sort of apprenticeship in most career fields. There are very few career fields today that do not require a pretty large skillset and isn’t benefitted by quite a lot of additional knowledge. Incorporating some form of apprenticeship into a field means that new entrants learn all of these things under the careful eye of a person who has learned them.

Yes, in many cases, apprenticeship already exists informally. I had several strong mentors during my early years that taught me many, many things. Yet, even then, it was limited. They were mentors to me out of the goodness of their heart, taking time out of their busy schedules to teach me things. On the other hand, as a proper apprentice, one would actually be very strongly tied to one’s master, doing much of their grunt work but also fine-tuning one’s skills and knowledge base over a long period of time.

Mentoring alone is incredibly helpful and it has spawned many a successful professional. Apprenticeship offers even more, yet we seem to have abandoned it culturally due to our impatience and our drive for profits. Is that a good thing? For quarterly returns, yes it is. For long term growth of skill-based fields, it’s not at all.

Everyone Has Something to Offer
In some ways, almost everyone you meet in life can be a mentor. On page 276, Ferrazzi spells this idea out:

The fact is, from my father’s perspective, everyone had something to offer. When he’d go out for his weekly sit-down at a local diner with his friends, he took me along. He wanted me to be comfortable with older, more experienced people and to never fear seeking their help or asking them questions. When my dad would show up with me in tow on a Friday night, his buddies would say, “Here’s Pete [my father's nickname] and Re-Pete [my nickname to his buddies].”

This passage really struck me because it points to something really important about mentorship: you can learn valuable lessons from almost anyone.

Here’s an example. For several years, I lived in an apartment about three miles from my workplace. It was in a large town that had solid mass transit available, so I would go out of my apartment building each day, walk a little ways, and there would be a bus stop. I’d wait for the bus there and ride it to work.

Most mornings, the same small group of people would be there at the same time and, over time, I got to know them. Many of them were professionals in other departments at the same place of employment. From those people, I learned a lot. They taught me how to speak up. They taught me how to diminish my intimidation factor (I’m a very tall, broad shouldered guy and can inadvertently intimidate people on occasion) and how to seem more friendly. They taught me about the nuances of office politics and gave me lots of advice on how to deal with difficult situations I was facing.

And they were just people at the bus stop. Yet, still, they were useful mentors who taught me a lot.

When you keep your ears and eyes closed, you miss out on a lot of valuable lessons.

Getting a Mentor
How exactly do you build up a relationship with someone who might be a primary mentor of yours. On pages 281 and 282, Ferrazzi offers up some strong ideas:

The best way to approach utility is to give help first, and not ask for it. If there is someone whose knowledge you need, find a way to be of use to that person. Consider their needs and how you can assist them. If you can’t help them specifically, perhaps you can contribute to their charity, company, or community. You have to be prepared to give back to your mentors and have them know that from the outset. [...]

If, however, there are no immediate opportunities for help, you must be prudent and conscious of the imposition you’re placing on that person. Almost every day, some ambitions young man or woman sends me an email that states all too directly, “I want a job.” Or, “I think you can help me. Take me on as your mentee.” I shudder at how deeply these young folks misunderstand the process. If they’re going to get my help, and they haven’t even offered their help in return, then at minimum they should attempt to endear themselves to me. Tell me why you’re special. Tell me what we have in common. Express gratitude, excitement, and passion.

I get emails all the time from bloggers who have just started a blog. They have maybe two or three posts up and they write to me essentially demanding that I take the time to visit their site and give them thorough feedback on what they’ve done.

In essence, these people are asking me to be their mentor. They’re asking me to give my experience and careful advice to them. Often, it’s in exchange for nothing, and just as often, they’ve given me nothing in return for it, not even the basic start of a conversation.

Now, if they happen to be presenting a blog that might be interesting to me, I’ll check it out, but most of the time, I just delete these emails. The people making such requests do not want to establish any sort of relationship. They just want to be handed a recipe to get themselves a few more page views.

On the other hand, several much wiser bloggers have started out by emailing me questions and observations about The Simple Dollar. They’ve written long posts, linking back to my site and debating what I have written. After an extensive conversation, then they might ask for some specific help, and at that point, I’m very happy to oblige.

The role of the mentee isn’t just to take. Every relationship is an exchange, and if you’re not offering to exchange anything, the other person likely won’t offer anything, either.

The Myth of a Work-Life Balance
On page 287, Ferrazzi attacks the idea of a balance between professional and personal life:

When it became clear to me that the key to my life was the relationships in it, I found there was no longer a need to compartmentalize work from, say, family or friends. I could spend my birthday at a business conference and be surrounded with warm and wonderful friends, as I recently did, or I could be at home [...] with equally close friends to celebrate.

To put it simply, once you figure out what your true central values are in life, the boundary between “work” and “personal” becomes a non-issue. In every aspect of your life, you just seek those true central values and do whatever is most in line with them.

For me, my central values are my children and my personal and intellectual growth. Almost every activity I choose to do, whether it’s work related or personal, seeks to push me in one of those two directions. I try hard to grow intellectually due to my work, and I push through the drudgery to earn income so I can support my children. I’ll spend long afternoons playing with my children and taking them to intellectually-stretching events or playing mentally challenging games with them or engaging them in social situations. My favorite pastime with friends is to play a game with them that requires me to think. I’ll happily invite anyone over that’s interesting to me and makes me grow somehow as a person, whether I know them through my professional work or they’re a close personal friend.

In the end, what’s the boundary? My only boundary of any sort is that I’ll turn off my cell phone if I want to engage in a focused activity with my children. Aside from that, pretty much anything goes.

I know what’s important to me and everything balances on that. The details? I’ll figure them out as I go along if my central values are in the right place.

There Is No Equation
What if you have multiple central values and you try to balance them? Ferrazzi, on page 287, argues that there is no equation that can be balanced:

The kind of false idea of balance as some sort of an equation, that you could take this many hours from one side of your life and give it to this other side, flew out the window. And with it went all the stress of trying to achieve that perfect state of equilibrium we read and hear so much about.

In essence, what Ferrazzi discovered is that the best way to spend your time is the way that mixes your various core values and interests the best.

One of the key highlights in my life is inviting friends over. I love to socialize. I love preparing meals for guests. I also love conversation with intelligent people and engaging in thought-provoking activities with them. This balances several key values in my life all at once.

What I learned, though, is that I get even more value out of this if I simply disregard the professional-personal barrier in terms of who I invite. For instance, the thought of inviting J.D. and his wife to a dinner party with several of my own personal friends sounds like it’d be incredibly enjoyable for everyone. There is no line between personal and professional there at all – it’s just people I like that I find interesting. The only difference is in how I connected to them.

I spend my time looking for activities with synergy throughout the various core values and passions in my life. I love taking my children to the grocery store, for example. It provides countless teaching opportunities, a fair amount of playfulness, the ability to riff on my passion for cooking, plus countless opportunities to jot down ideas for posts for The Simple Dollar. Where’s the line between personal and professional there? To put it simply, there isn’t one.

There’s just me.

Who Are You Spending Time With?
Ferrazzi ties these points together in an interesting way on page 288:

If you buy into the myth of balance (the one that sees life as an equation), as I once did, the answers to such questions as “If I’m so ‘accomplished,’ why aren’t I having more fun?” or “If I’m so ‘organized,’ why do I feel so out of control?” is to “simplify,” “compartmentalize,” or “reduce” your life into its most essential components.

So we try to save time by eating our lunches at our desk. We have less serendipitous conversations with colleagues, strangers, and other “nonessentials” at the water cooler. We consolidate our schedules to include only the most important actions.

People tell us, “If you just get more organized, if you strike a balance between work and home, and limit yourself to the important people in your life, you’ll feel better.” That’s just totally misguided. What they should be saying is “I gotta get a life filled with people I love.” The problem, as I see it, isn’t what you’re working on, it’s whom you’re working with.

Think about it this way. How many of your coworkers would you choose to spend time with if you didn’t work with them? If that number is very low, then it’s likely you have a strong desire to separate work and personal life. If it’s high, it’s likely that you do fill your social calendar with these people and thus you have a naturally balanced life, balanced in the way you want.

Ferrazzi’s argument isn’t that you should devote your life to work – I know that’s what at least a few readers thought when they read this. Instead, he’s saying devote all of your time to what you enjoy doing and the people you enjoy doing it with. Boundaries aren’t all that important.

The more time you find yourself spending doing things you don’t like doing with people you don’t like spending time with, the lower your quality of life is. There’s no paycheck worth chasing that’s worth sacrificing so much of the happiness in your life.

On Saturday, we’ll tackle the final chapter – “Welcome to the Connected Age” – and I’ll share some final thoughts.

Every other Sunday, The Simple Dollar reviews a personal development, personal productivity, career, or entrepreneurship book.

Since starting The Simple Dollar, I’ve gradually developed the belief that the reason many people get into financial trouble is that their lives become overwhelmingly complicated. Attempting to balance a career, a marriage, a family, relationships with friends, hobbies, community responsibilities, and so forth can pretty much drain a person, making them more susceptible to peer pressure and advertising’s influence. The end result is that they spend more than they should for a mix of reasons: emotional support, escapism, a desire to live the quality of life they think they deserve because of all of their hard work.

In truth, though, people in that type of high-pressure situation who seek some sort of quality improvement in their life are best served not by charging themselves into debt, but by dialing things back a little. Letting go of the little, unimportant things opens up the time and the emotional room for things that are really important – time with family, time with hobbies and personal passions, and time with loved ones and friends.

I know this from experience. My reaction to my early professional life – particularly immediately following the birth of my first child – was to spend with reckless abandon. I thought I should have a better life than I had because of my hard work and because of the lifestyle of my friends, so I spent money to chase that mirage. Along the way, though, I just became unhappier and eventually I found myself trapped in a ridiculously complicated life with more debt than I could handle.

The solution was simplifying my life, of which debt reduction and elimination was just one piece.

Recently, I picked up a copy of Janet Luhr’s Simple Living Guide, which basically has the same message: the best solution for the difficulties of modern life is to simplify things. It’s a pretty hefty book – nearly magazine-sized in height and width and almost 500 pages in length – but it’s loaded with countless ideas on simplifying one’s life, which often ties directly into a stronger personal finance situation. Let’s wade through the book a bit.

1 – Time
Luhrs’ argument here is that many of us have jammed our schedules so tight with stuff that on the rare occasions when we do have free time, we collapse in a heap of exhaustion and do something of little or no personal value to ourselves, like channel surfing. This arrangement devalues our time – most of the time, we’re so packed with stuff we barely enjoy it, and the rest of the time we do stuff that has very little personal value.

Luhrs suggests a different approach. Her first suggestion is to focus on one thing at a time, completing it well. Multitasking should be held to a minimum, because multitasking means that you’re only giving a slice of your attention and focus to things and are thus doing them at a low level of quality – not a standard that’s good for your sense of well-being. If this new approach means cutting some stuff out, so be it. The ramifications of this approach are pretty widespread – it leads to more pride and satisfaction in one’s work and free time and also leads to an elevated sense of quality in life. If you’re happy with what you’re doing, you have a much lower tendency to crumple and waste time at the end of the day – instead, you find ways to keep it up and spend that time on things personally important to you.

2 – Money
Debt is dangerous to a person’s spirit. It introduces living requirements into your life – you can’t lose your job, you can’t take challenging and rewarding risks with your career, and you move at a much slower pace towards the bigger goals you have in life. Debt is the enemy of simple living. Thus, in order to simplify your life, you have to boot the debt out.

How do you do that? The easiest recipe is to simply spend less than you earn and apply the difference to eliminating debt and building an emergency fund to keep crises at bay. Once that’s done, keep up the “spend less than you earn” mantra and apply that difference towards saving for the big dreams you have in life. Things are much simpler when you’ve got a fat bank account and no debt.

3 – Inner Simplicity
Mental exhaustion is another danger for many people. Jamming your mind full of complex thoughts and ideas and organizing lots of separate pieces of information constantly is a pure drain on your mental energy – and over time, you simply feel worn out by it, even though you weren’t exerting yourself physically.

Luhrs’ solution to this problem is to take time out without mental demands on yourself. She suggests meditation and/or prayer. I’ve found both to be a big help for me, particularly when it seems like I can least afford the spare time. Just stopping for a short period and clearing your mind of thought, of the mental debris of the day, goes a long ways towards making everything seem substantially more manageable.

4 – Work
For many of is, work is drudgery. It’s just a way to bring in the money to pay the bills. On a good day, it brings us a bit of joy – on the bad days, though, it’s awful, filled with politics and pettiness and other things we don’t enjoy. Yet we do it anyway.

Unsurprisingly, such an environment is a major obstacle to simple living. It drains our mental energy and saps our spirit. The best way to avoid it is to get out of debt (reducing the financial hold) and then seeking work that genuinely makes us happy. In other words, frugality becomes a gateway to the kind of happiness that we want to achieve.

5 – Simple Pleasures and Romance
Quite often, the joys in our life that bring us consistent happiness are the simple pleasures – breakfast in bed, a delicious cup of coffee, a glass of wine, an evening spent playing a game with your spouse. If we seek out these simple pleasures instead of investing tons of time and resources into enormous things that don’t generate nearly the enjoyment for the effort, we’re better off.

Of course, on the other end of the spectrum, simple pleasures become less pleasureful if they’re allowed to become completely routine. The pleasure of the morning coffee, for example, becomes an ordinary routine if done over and over again. The way to keep pleasures pleasureful is to mix up that routine. Don’t have a morning coffee every day (or have cheap coffee every day and a really good cup on occasion). Alter your evening routines all the time. Take a warm bath once for every ten showers. Simple pleasures are enjoyable because they break routines, not because they establish them.

6 – Virtues
What essential values do you hold most dear in your life? What virtues do you consider to be the most important? Living your life with these values and virtues at the center brings a certain amount of simplicity and joy from every element of your life.

If you value truth, for example, a life filled with lots of little white lies makes your life unhappy and needlessly complex. Break through this by sticking close to your virtue. Eliminate those little white lies.

The same goes for any virtue you hold in high esteem in your life. Strive to actually act through that virtue as much as you possibly can. The psychic rewards are tremendous.

7 – Families
If you made the choice to have a family – get married and/or have children – one of the most powerful things you can do with your time and energy is to spend it on them or with them. Families mean responsibility and joy at the same time, and the only way to live up to that responsibility and gain that joy is to invest in it with your time and energy.

Plan family-oriented events where everyone spends time together – I’m a big fan of “family game night.” Plan dates with your partner. Do little things to remind the people in your family that you care. Eat meals at home together, all at the same table. The reward? Better relationships with the people at the center of your life.

8 – Holidays
Many people try to “make up” for a year of neglect by going massively over the top, planning the “perfect” holiday season. Of course, the holidays are rarely perfect and thus you end up feeling disappointed and disheartened with the whole thing.

That’s the wrong approach. If you spend consistent time and energy on and with your family, the holidays no longer have to be “perfect.” Scale back on the festivities and play it more loose. You’ll find that the real joy of it comes from spending time together – and not worrying about perfection is a lot less expensive and a lot less stressful.

Yes, have traditions – they’re wonderful. But don’t make those traditions incredibly elaborate. Stick with the simple – a Christmas Eve reading of ‘Twas the Night Before Christmas, for example. Don’t worry about spending all of the holidays in the kitchen preparing some sort of perfect, elaborate meal.

9 – Cooking and Nutrition
The healthier the materials you put in your body, the healthier you’ll feel overall, both mentally and physically. That’s not to say that you subscribe to some sort of idealized diet – that adds stress – but instead that you should subscribe to just a few simple principles to guide what you eat.

What sort of principles? Luhrs offers some suggestions. I’ve found a lot of power in just following what Michael Pollan suggests in his book In Defense of Food: Eat food. Not too much. Mostly plants. By “food,” Pollan means unprocessed food, as close as possible to raw ingredients like vegetables and meats.

10 – Health and Exercise
Want to make your health and exercise simple? Understand how your body works. Learn more about it by reading basic guides to human health. Pay attention to the feedback it gives you – if you feel tired and sluggish and overweight, you likely need to make changes. Gently push it to make it stronger – in other words, exercise without overdoing it. Take long walks. Do simple weight exercise.

Unless you want a stunning body, a gym membership and a personal trainer are complete overkill, adding complexity to your life. Most of us just need to move a little bit, and we can get that by just adding more motion to our lives through simple exercise and walking.

11 – Housing
The American ideal often seems to be the big, giant house. However, that big, giant house requires a lot of upkeep and maintenance, eating our time, physical energy, and mental energy. Instead, we should strive for just enough housing to meet our needs and not our dreams.

If you’ve got rooms that you don’t use in your home, you should consider downgrading. Why? Mostly, that extra room just means more maintenance costs and maintenance time while it’s just used to store more and more stuff.

12 – Clutter
This idea of “more housing means more room for stuff” leads right into the idea of clutter. Clutter is one of the biggest opponents of simple living, as clutter means more maintenance time, more maintenance effort, more maintenance cost, and the psychic cost of having more stuff than you can deal with.

What can you do? Focus on getting rid of stuff you don’t use. If you don’t use the item more often than once a year, get rid of it. Sell it, trade it, gift it, hand it to a neighbor. Also, keep mail and “junk” from building up in the junk collecting areas in your home.

13 – Gardening
Luhrs is a strong advocate of gardening as a significant part of a simple life. In her eyes, gardening gets a person in touch with the earth and the environment around them, requires them to work their body but allows the mind to rest (almost in a meditative fashion), and produces the freshest food possible.

My wife and I are fairly avid gardeners. We have a small garden in which we grow a variety of fruits, vegetables, herbs, and flowers and, throughout the year, we’ve been able to enjoy the products of that garden. While I don’t really have a chance to get the “Zen” nature of gardening – trust me, with a two year old and a three year old trampling around, it can be hard to lose yourself in it – I do easily see how it can arrive.

14 – Travel
The book closes with a chapter on travel, which mostly argues that for most people, travel is overbooked with things and thus the travelers rarely get the time to truly enjoy the experience. I agree – the more wide open you can make your trip, the better. When we went on our honeymoon, our plan before we went was “spend a week in London, a few days in Edinburgh, and a few days in Inverness,” and it was tremendous.

Really, though, the value of traveling is that experiences, not things, are really the spice of life. Traveling with freedom opens the door to many, many experiences which will stick with you forever, adding true value to your life. It’s also much less expensive to loosely book your trips, since you’re not throwing money at activities that you don’t really have the time to fully enjoy.

Is The Simple Living Guide Worth Reading?
The Simple Living Guide is an excellent book to read if you feel as though your life is simply too complicated and that complexity is bringing you down. I tend to think that, in modern life, that’s a fairly common complaint. I know that, for me, I spent much of the early part of this decade feeling exactly that way.

However, if you already are living a fairly simple life, The Simple Living Guide probably won’t contribute much to your life. This is really just a great “food for thought/getting started” guide for a person whose life feels like it’s running off the rails.

I did enjoy the book, but in many places I thought to myself, “I’m already living this kind of a simple life.” I think that’s a good thing.

This is the fourteenth of sixteen parts of a “book club” reading and discussion of Keith Ferrazzi and Tahl Raz’s Never Eat Alone, where this book on building a lifelong community of colleagues, contacts, friends, and mentors is teased apart and looked at in detail. This entry covers the twenty-seventh and twenty-eighth chapters – “Build It and They Will Come” and “Never Give in to Hubris” – which appear on pages 259 through 272.

One major challenge for many people is how exactly to find people to connect to. Many of the typical social methods people use to meet each other are shots in the dark, hoping that you find someone compatible.

Ferrazzi is a big proponent of clubs and community organizations. If you dig around, there are hundreds, perhaps even thousands of these in your local area, but many people never put in the footwork to find such organizations.

Over the years, I’ve been a member of many, many such groups, and I have to agree – they’re often useful in building relationships and providing a great way to spend time. In my experience, the best organizations are the ones that combine the camaraderie of a club with a natural passion that you already have.

Join a Club
Ferrazzi lays out the reasoning behind joining a club or organization on page 261:

All clubs are based on common interests. Members are united by a similar job, philosophy, hobby, neighborhood, or simply because they are the same race, religion, or generation. They are founded by a common proposition that is unique to them. They have, in other words, a reason to hang out together.

Take a look in the mirrow. Who are you? Where do you live? Where did you go to school? What do you believe in? The answers to these questions give you things that you have in common with other people, and this can often be the basis of participation in organizations.

Perhaps your school has an alumni association. Perhaps you’re a believer of a certain religion. Perhaps you engage in a particular hobby that others might share. Maybe you suffer from a certain medical condition, or have survived a certain social situation.

Whatever it is, there’s either an organization out there that will help you find people that you have something in common with or you can start such a group yourself. The people you meet will not only be easy to meet, but many will have social worlds that don’t overlap your own, giving you many opportunities to get to know people in different areas and stages and walks of life.

Bring Something Extra
On page 261, Ferrazzi talks about your unique selling proposition:

At a time like this, you have to figure out what is your U.S.P. – your “unique selling proposition,” for all you non-MBA types out there. What secret sauce can you bring to the table? Your proposition can be an expertise, a hobby, or even an interest or passion for a particular cause that will serve as the foundation from which an entire organization or club can be established.

When you join a club – or, especially, when you start your own – you need to bring something unique and interesting to the table or else you’ll just stand out. Perhaps it’s nothing more than a willingness to participate and take on the difficult tasks. Perhaps it’s a set of resources that you have that you can contribute to the group. Maybe it’s personal talent.

An example: when in college, I joined a computer group, where people would trade software and computer parts, build computers for people, and give each other advice. The group was somewhat anarchical, though, and the job of president – the person who had to interact with the college and arrange rooms for meetings and the like – was thankless, though people did appreciate that someone was willing to do it. For one (long) year, that was me. Because of that year, I built up several long-lasting friendships, resulting in two separate guests at my wedding a few years later.

Whatever it is, having that extra “something” will help you become an integral part of any group and make it possible for you to meet lots of people. Stand up, offer what you can, and good things will happen.

Clubs Aren’t for Rich White People
On page 263, Ferrazzi eschews the “rich white guys” notion of what a club is:

The days when clubs were only for wealthy white men to consort with people just like themselves are over. It doesn’t matter if it’s a group of carpet salespeople meeting weekly to discuss the trials and tribulations of their jobs; a roundtable of female Republicans who are dissatisfied with the stance of their state party; or a group who share a passion for great wines and who come together monthly to do tastings, hear vintners who are traveling through the area, and who plan an annual trip to Napa. Whatever it is and whoever you are doesn’t matter.

The idea that a “club” is just an exclusionary group of like-minded people who don’t want anyone else interfering in their ways died along with the pet rock. Sure, there are still a few such archaic groups around, but most groups simply aren’t like that, and if you use the fear of exclusion to keep you from dabbling your toes in the water, you’re making a big mistake.

The entire purpose of a group is to meet people that overlap in some demographic fashion, whether it be a hobby or a belief or a location or a political affiliation or something else. That overlap is the one thing that matters.

Yes, maybe some groups that seem like they would fit simply don’t fit, but it’s not because of exclusion. It’s usually because of personality clash.

The Value of a Club
The compelling reason for club membership is spelled out on page 264:

As long as it’s an association of people with shared interests meeting in a specified place (even if that place is cyberspace), you’ll benefit from belonging to something larger than yourself. You and your fellow members will be strengthened by a collective identity. And whereas with business, where boundaries of most relationships are clearly defined by a specific project or deal and end when that project or deal is done, membership in a club (preferably a club you’ve started) will lead to friendships that will last for years.

Being in a club means that you’re building a bond with other people that goes beyond the minutiae of the day. People come together in clubs because of common interests and beliefs and passions, not because they’re made to out of business or because it’s convenient.

That’s why clubs are often the best opportunity for building new friendships and connections in your area. The people in that room share something that transcends the ordinary. Often, they work together to build something even more interesting and exciting. That environment is the type of place where relationships and friendships thrive.

Take some time and find out what groups, clubs, and organizations are available in your area and give them a shot, whether it’s a book club at the library or a hunting club at the local range. Whatever it is, if it matches you, you’ll likely match it.

Momentum
Whenever people start building a lot of new relationships, these relationships often snowball. Friends will constantly introduce you to new friends, and so forth. Ferrazzi looks at this more deeply on page 268:

The pursuit of a powerful network of friends is not in and of itself a bad thing. But the closer you get to powerful people, the more powerful you tend to feel. There is a point where your reaching out to others will pick up momentum; one powerful contact will lead to another and then to the next. It can be a very fun and motivating and important ride.

At one point in my earlier career, I noticed that this very phenomenon happened to me. At one point, I completed a pretty substantial project and was able to share the results of that with a large number of people. Later, at a large conference (the first of its kind I had attended), I would meet up with these people and they were constantly introducing me to others. By the end of it, I knew many of the key people there, pushing one of my friends to comment that it sure didn’t seem like I was a first-timer.

If you provide something of value to others and make a sincere effort to befriend them, help them, and maintain a connection, they’ll remember you. When the time comes, they’ll introduce you to people they know and you’ll get to know new people. Eventually this will reach critical mass – people will talk positively about you when you’re not around, realizing that they have you in common, and this will often bolster your reputation strongly without any effort from you. You’ll get calls and messages out of the blue from people wanting to know you.

It’s awesome. It works. It really happens. But it requires being a sincere and helpful friend to a lot of people over a long period of time.

Vanity
Unfortunately, that kind of success can lead to vanity. On page 268:

Don’t let a little vanity seep into your actions or excite more expectations or create a deeper sense of entitlement. Don’t get your Ph. D. in master connecting, and then, for some reason, forget all the classes and values that were your foundation.

Everyone fails in life. What will you do when the phone calls that were once returned immediately no don’t even get a response?

It’s easy to think that you really are awesome and that a gravy train of success will keep on running. Inevitably, though, something happens. We all fail. We all do something we shouldn’t.

The end result of that is sometimes connections close right in your face, and often even a domino effect can occur as the story of your mistake spreads.

What happens then? You rely on your old friends, the ones who have been around for a long time. The only problem there is that if you’ve stopped being true to who you are, you’ve also stopped being true to them – and it’s likely they won’t be there for you.

If you begin to think you’re better than people you once thought of as a valuable equal, it will eventually backfire on your face. Remain humble, and remember who your truest friends are and the values that helped you to start opening the doors in the first place. If you stick to those values and beliefs, you’ll do all right.

On Wednesday, we’ll tackle the twenty-ninth and thirtieth chapters – “Find Mentors, Find Mentees, Repeat” and “Balance is B.S.”