Simple Money by Tim Maurer | Personal Finance Book Review

Tim Maurer's Simple Money starts with the premise that personal finance is more personal than finance and focuses on the theme of "enough." The book is not so much about improving the state of your finances as it is about leading a "richer life" with a "freer mind." That is not to say that following Maurer's guide will not improve your finances. It will, but the book's goal is more to improve the reader's life. Having more money is a subset of that and not a goal in itself.

Simple Money is different from other personal finance books in that it provides a sort of one stop shop for everything in the realm of personal success and fulfillment, from goal setting to finding your life's calling, to how much life insurance one should buy, to saving on car insurance and everything in between. There is even a chapter on how to use a free Trello account to organize your life. That is quite an achievement when you consider the relatively short 286 page length and how much of the content is repeated.

Every chapter begins with a sort of executive summary that tells you why you might want to read it. Each chapter ends with a summary of its content and invites the reader to enter into a journal any insights gleaned therefrom. While I normally hate this kind of repetition (it reminds me a bit of those shows on TV where there is a summary of what just happened before and after every commercial break), this format worked well in introducing and reinforcing ideas and didn't feel like page padding. That said, I skipped many of the concluding summaries.

Simple Money is a quick read if you read straight through, but most would benefit from rereading and doing the exercises, which aim to simplify traditionally complex topics and involve answering thought provoking questions. Most people have trouble deciding what they want from life, apart from general and vague statements like "I want to be rich" or "I want to be happy." Maurer's exercises, which he has derived from financial experts, psychologists, philosophers, and other researchers, help turn these general wishes into actionable and attainable goals that Maurer calls "next actions."

Next actions differ from regular goals because they are associated with a larger project (e.g. save for retirement) and are self-selected, authentic, and others-oriented. Mauer persuasively claims that goals formed in this way are much more likely to be achieved than traditional goal setting because they align your subconscious/emotional/reptilian brain with your rational brain, which he takes from another researcher in metaphorically calling the elephant and the rider. The elephant is much bigger and will do what it wants despite what the rational rider says. The trick is to get the elephant, your subconscious mind, to want to do what the rational mind knows is correct. When the two work together, they are unstoppable.

No personal finance book would be complete without guides on how to save money and how to invest. Simple Money has an abundance of both. It even comes with a sample index fund portfolio, which Maurer claims has produced 10% annualized returns for the last 38 years with 20% less volatility than the S&P 500.

The portfolio is

Asset Class
US Large Cap
US Large Value
US Small Cap
US Small Value
International Value
International Small Cap
US Treasuries

While I enjoyed reading Simple Money and found it enlightening, I didn't like the author's tone. There was something annoyingly preachy about it. This is subjective, of course. The book is worth the time it takes to read it, and the more you put into the exercises, the more you will get out of it.