Updated on 03.19.13

The Simple Dollar Weekly Roundup: Book Club Edition

Trent Hamm

Given the very positive (overall) comment, email, and Twitter response to my idea of bringing back the “book club” idea for a handful of books, along with many similar suggestions for it, I’m going to follow the crowd with most of those suggestions. Here’s how I’m going to try it.

First, the book I’m going to read through for the first book club is The Total Money Makeover by Dave Ramsey. I think it can inspire a lot of strong discussion and matches the theme of The Simple Dollar quite well.

I plan on writing two entries a week on The Total Money Makeover, spread out over about six weeks. They will appear on Wednesdays and Saturdays. The first one will appear on Wednesday, July 1.

The entire goal is to move slowly through the book, discussing the ideas in it in more detail than could be done in a single post and trying to hit some good discussion points on specific ideas that might generate some controversy/discussion. It will be more imbued with my own take on the material than the typical book review – I’ll mostly quote a bit from the book, then go off on that specific point.

If this works – and I think it will – I’ll follow it up in September or October with Never Eat Alone, then later with Getting Things Done. Those were the three books that many, many people seemed interested in.

So, on July 1, I’ll post the first entry, which will cover everything up until the Debt Myths chapter on page 17.

Here are some interesting personal finance articles I’ve found recently.

Stacked Costs and Second-Order Foods: A New Way to Think About Rising Food Costs This is a good argument for eating simpler foods and knowing how to cook them. If you’re able to eat from staples, you’re less impacted by rising fuel costs, rising labor costs, etc. (@ casual kitchen)

Getting Started With Canning (aka Home Food Preservation) This brought back a lot of memories of childhood – and helped fuel a lot of plans for later this summer. (@ lifehacker)

Elizabeth Warren and the Terrible, Horrible, No Good, Very Bad, Utterly Misleading Bankruptcy Study Whenever I read a study that has an outcome that I consider shocking, I usually don’t believe it until I can read the fine print. This is a great example of why. (@ megan mcardle)

The Truth About Vizualization and Goal Achievement Visualization doesn’t matter unless it leads you to action. (@ awake at the wheel)

The Buy Ahead Principle: One of my Biggest Grocery Saving Secrets This is a good tactic if you stick strictly with stuff you’re sure that you’ll use in the future and stuff that won’t go bad. (@ money saving mom)

The Money Diaries: The 20-something Emotional Spender I know a lot of people like this. I wish they read sites like The Simple Dollar. (@ i will teach you to be rich)

What Are You Willing To Consistently Pay More For? Everyone has some things that they’re willing to pay more for. I’ll pay more for good wine, cheese, and produce, for example. (@ man vs debt)

5 Perfectly Respectable Ways To Get A Free Meal Volunteering gets my vote. I’ve volunteered many times and received a free meal in the process. (@ wise bread)

Joining An Investment Club? Watch Out For Groupthink Groupthink is always dangerous. It’s even more dangerous when you have your money on the line. (@ the digerati life)

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  1. jason says:

    About the Elizabeth Warren study–the columnist isn’t immune to suspicious claims of her own, e.g.:

    “Yes, people complain about deductible increases and more cost-shifting, but a $500 or $1000 increase in the annual deductible won’t tip any family into bankruptcy”

    That statement is as unsupportable as anything she’s citing in Warren.

    The comments on the column are an amazing merry-go-round of “no, you missing the point” statements.

  2. Steve says:

    The article about second-order foods was an interesting read, but unfortunately its conclusions are not borne out by the evidence. It seems the author may have started with the premise “eating locally grown plants is better than eating TV dinners” and then built up an argument to support the predetermined conclusion. Maybe it’s possible that a 30% increase in corn prices could lead to a 100% increase in meat and Doritos prices, but since that’s not actually what happened, the whole argument seems to be called into question.

    On the other hand, maybe I’m simply justifying my own predetermined conclusion. (I tend to favor the “outside edges of the grocery store” diet – eat the basic ingredients of meat, produce, and dairy and try to avoid the middle of the store where the processed foods are found.)

    Of course, no one’s talked about food inflation in a while, because the economic crash seems to have taken care of the problem.

  3. Trent Hamm Trent says:

    jason: there’s a world of difference between a blog post and a published study.

  4. jason says:

    Agreed, to a point. But in the post–and especially her replies to comments–McArdle goes to great lengths to establish her criticisms as something more than an off-the-cuff remarks.

    She didn’t publish her critique over her lunch break as a casual observer of economic conditions. She invested a great deal of effort in cataloging Warren’s errors and published it in the Atlantic with comments open for business. McArdle wants people to believe her version of the story, not Warren’s, so she labors under the same expectations. Not quite the same as firing up a private blog to record a few dilettantish witticisms.

    That said, I think that many of her criticisms have merit, and while I admire Warren in lots of ways, McArdle is well within her bounds to hold Warren to account on methodological grounds. But her commenters are also within their rights when they ask her to defend her own methods.

    You’re a careful writer with a lot of experience writing for a large audience, Trent. I’m sure you’ve found that to broadcast an analysis is to invite critique, regardless of platform. These days, published is published, to a degree never seen before.

    And that’s very much to McArdle’s credit and benefit, provided she’s okay with applying the same rigor to her own notions as she expects Warren to bring to hers. In fact, I bet McArdle would be the last person to defend the statement I cited above by saying, well, it’s just a blog, so I don’t have to support *all* my claims.

  5. imelda says:

    Trent, I would encourage you to take a look at some of the comments to McArdle’s blog post. While reading her entry, I was confused because she makes a claim–that Warren’s numbers are inflated–and then she fails to back it up. Some of the comments point out that McArdle focuses on the absolute number of bankruptcies filed (ignoring all the changes to bankruptcy and health care law), whereas Warren’s report is explicitly about the percentage of bankruptcies driven by health costs.

    IOW, I found McArdle’s post VERY unconvincing. I don’t know much about the topic, tbh, but I know enough about logic to see that her arguments were very weak.

  6. jc says:

    I likewise found McArdle’s post full of insinuation and polemic (how is Warren’s being head of the TARP–clearly largely a ceremonial position at this point anyway–relevant to this discussion?) and not at all convincing, except to raise the general level of “fear, uncertainty and doubt” around both authors’ claims. Which is no doubt what she intended.

    On the other hand, the Casual Kitchen article is great. I can’t even begin to explain to people how much money we save in this household just by making oatmeal, beans, brown & white rice, pasta and frozen veggies the foundation of most meals. And this is for an apartment full of confirmed, voracious meat-eaters. With these as the foundation, there’s little room left in the bowl for big hunks of meat, cheese or egg.

  7. Mary Jo says:

    Trent, my library carries two editions of “The Total Money Makeover,” one from 2003 and one from 2007, with a slightly different number of pages. Does it matter which edition we use? Do you know if there were any content additions between 2003 and 2007? Thanks!

  8. littlepitcher says:

    Re: paying more for certain items or services

    This cheapskate has discovered that the cheapest item breaks down fast, but the second cheapest generally wears well. The most expensive item carries an open invitation for repairmen to overcharge you, but the second most expensive generally does not receive that treatment, and repair costs can be more easily negotiated.

  9. mellen says:

    Let me see if I have this right; Warren claimed that the % of bankruptcies attributable to medical expenses had increased from roughly 50% to more than 70% and McCardle tries to refute her claim that they’ve risen in number? Percentage and total are clearly different. The total number may have gone down but the % did increase; McCardle said so:

    “…in 2001, 1.45 million households filed for bankruptcy. In 2007, that number was 727,167.” and “…medical bankruptcies, from about 750,000 to slightly over 500,000.”

    750,000 of 1,450,000 is about 50% and 500,000 of 727,167 is more than 60%. Given those numbers, the percentage has increased even though the total number has decreased.

    Now, do I believe that all those people were in financial difficulty because of a medical crisis? Not a chance. More likely they were in financial difficulty BEFORE and the medical problem simply pushed them over the edge. THAT is what McCardle should be arguing, that judges allow people to file a “medical bankruptcy” because an illness was the final straw.

    Those are numbers I would like to see analyzed.

  10. Dana Booth says:

    Littlepitcher: very interesting. I’ve certainly observed the same in the cheapest too many times unfortunately.

    Trent: People must already be clamoring to the library for the book; it’s already checked out and on hold at one local branch and checked out at two others! I’ve put in my request :) Looking forward to the book club discussions. Imagine if one referenced article can bring the comments it has already, what a whole book club discussion will bring :)

  11. Aaron says:

    My guess is that McArdle is pushing an agenda here — insisting that medical costs aren’t actually hurting people because the number of bankruptcies declined. Well, as the commenters point out, total bankruptcies declined because of the ’05 law (written, I might add, largely by creditors and widely regarded as horribly unfair).

    It’s the percentage we should look at – or, even better, the actual amount of economic disruption. How many people have unsupportable medical debt that they can’t discharge in bankruptcy? Quite a few, I’d wager.

  12. Daniel says:

    @Steve: In my defense, let me say that the Doritos example was just that, an example. The purpose of my post was to show that when you apply more processing, branding and energy costs to food, the price of that food necessarily goes up. It does not mean that every processed food at all times will always be more expensive.

    Foods go “on sale” because the grocer needs to clear out product, or for any number of other reasons. I was pointing out in the comments the irony of Doritos being on sale–immediately after I posted the article–to make the point the there are always going to be exceptions like this. But the general point still holds: the more energy and processing applied to foods, the higher the cost stack borne by the consumer.

    Casual Kitchen

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