Discover the Wealth Within You: A Financial Plan for Creating a Rich and Fulfilling Life by Ric Edelman

From Barnes & Noble

The Barnes & Noble Review
Most people who save and invest do so for similar reasons: to buy a house, to secure their children's education, to be able to retire comfortably. However, as Ric Edelman reminds us, these worthy goals are just part of a much larger picture: What about traveling the world? Or taking oil painting classes? Or making a donation to a worthy cause? While it's crucial to plan for the most important events in your life, such planning needn't be an imprisoning or all-consuming process: In fact, it should still allow you to realize your more individual dreams as well.

In Discover the Wealth Within You, Edelman's fifth book, he offers a sometimes irreverent but always sensible take on financial planning that might just excite you -- especially those of you who would rather do anything else than make a financial decision. First, Edelman argues, you must have specific goals, and therefore he carefully guides the reader through the goal-setting process. He admonishes his readers not to list such items as retirement or college education, but to include the things that will make their present lives more fulfilling. If you're stumped as to possibilities, Edelman offers extensive lists in a handy journal section.

Once you've established your goals, it's time to make them happen. Edelman uses the analogy of baking a cake to liven things up, and it's a charming tactic. He lists various types of "cakes" (or financial plans) but advocates using mutual funds to create a diversified portfolio. There's plenty of charts and numbers to make his case, as well as an indispensable guide to understanding the Morningstar ratings. There are also warnings about Wall Street analysts, mutual fund "window dressing," and the noise of the less-than-informative news media.

Whether you're just beginning to invest or already have a plan in place, Discover the Wealth Within You should be a wonderful source for advice. The funny footnotes and asides (as well as pertinent cartoons) are icing on the cake, so to speak. Read, learn, and reap the benefits down the road. (Holly McGuire)

Holly McGuire is a book editor and consultant based in Chicago, Illinois.

From the Publisher

Chapter One

Does the Cabbie Know
Where You Want to Go?

Have you ever gotten into a cab but refused to tell the driver where you want to go? Of course not. The whole point of hailing a cab is to have the driver help you get to your destination. You tell him your goal, and the cabbie both develops the plan for getting you there and implements it for you.

Financial planning operates the same way. Thus, if you don't have goals, the planning effort is as pointless as asking a cabbie to drive you around town, with no destination in mind.

I bet you can tell me what surveys reveal are the top three reasons people save money. They are:

• To buy a home

• To pay for college

• To afford a comfortable retirement

If you were to expand this list, you could add:

• wedding costs

• capital expenses, such as a car

• celebrations, such as a couple's 50th anniversary

• vacations

• major medical expenses

• elder care costs

• and, ultimately, leaving your money to your kids and/or other heirs.

Each of the aboveis a common reason why people save and invest. Each requires or constitutes a set of goals. And when combined, each fits into an overall financial plan.

But one thing bothers me about this entire list. And I imagine it bothers you, too. You know what the problem is?

Simple: The entire list is boring.

I mean, really boring. Yeah, I'll grow up. Buy a car. Get married. Have kids. Pay for college. Maybe foot the bill for a wedding or two. Retire. Wither away in some old-age home. Die.

And to make this even more fun, I'm supposed to pay some financial planner to tell me I can't afford it.

There's more to life than this, isn't there? Tell me there is! Please! Yes, there is much more to life than obligation and responsibility. There is also personal fulfillment and happiness. In fact, it's partly why our nation was founded.

In the Declaration of Independence, the founders of our nation recognized our right to "life, liberty and the pursuit of happiness."

The pursuit of happiness.

The document doesn't say anything about financial planning.

This is what makes the United States of America the greatest nation on earth. If anyone ever disputed that notion, no one has dared do so since September 11, 2001. On that day, our lives changed forever. At some point — was it days? weeks? I can't remember — I began wondering if this book's message would still be valid. So, I reread my manuscript, and discovered that you still need the message this book offers you, and that perhaps you need to hear this message even more so than before that horrible day.

That's because this book is all about setting and achieving goals. More than ever, you need to focus on your future. But as you read, you'll see that my emphasis on goal-setting is of a personal, and in many cases, materialistic nature. And in the aftermath of September 11, I suspect that many of us will have replaced many such goals with different, more fundamental ones. Where in the past goals might have pertained to beach houses, fancy cars and exotic vacations, people increasingly are considering goals that involve their communities, charities and families. All of this is healthy, and as you'll see as you read on, it is entirely consistent with my message.

Life is about the future. And our future is bright, thanks to the incredible foresight of our nation's founders. So, let's return to our nation's roots — and begin our journey, a journey in the pursuit of happiness.

Discover the Wealth Within You. Copyright © by Ric Edelman. Reprinted by permission of HarperCollins Publishers, Inc. All rights reserved. Available now wherever books are sold.

Publishers Weekly

Personal finance specialist Edelman acknowledges up front that this is really two books in one. The first half aims squarely at readers of motivational self-help books, as the author exhorts readers to set exciting goals for themselves climbing mountains, collecting handbags that will inspire their quest for wealth. In the second half, he advises readers on investing in mutual funds, targeting his counsel toward those with at least some knowledge about the field. He attacks some common investing wisdom, particularly the value of Morningstar ratings and the advantages of index funds. Edelman painstakingly points out that he's criticizing the mutual fund industry's misuse of Morningstar ratings in advertisements, not the Chicago-based ratings agency itself. Fair enough, though his argument glosses over the point that ratings are helpful when used as one of many criteria to evaluate a fund. More troublingly, his dismissal of index funds stems from his premise that fees, including mutual fund loads, are the least important consideration in an investing decision. There is much good evidence to the contrary. Performance is unpredictable; fees aren't. Unlike his earlier blockbuster, Ordinary People, Extraordinary Wealth, Edelman's latest may strike a false chord with readers. On deadline, Edelman inserted some references to the terrorist attacks, apparently to compensate for the self-indulgent tone of the "goal statements" that clash with the newly sober national mood. Agent, Gail Ross. (Apr. 1) Forecast: The book is aimed at two very large readerships, and both groups will probably pick this up, based on the author's name alone. Edelman's face on the cover and New Yorker and Peanuts cartoons inside the book will attract browsers, too. Copyright 2002 Cahners Business Information.

Product Details

• Interviews & Essays
• Read an Excerpt

Interviews & Essays

Q: Are you born with moneymaking ability, or can it be learned? Do some people really have the "Midas touch"?

A: Nobody is born with the ability to make money. Instead, it's something we learn. And thank goodness for that, because this means that anyone can do it. You simply have to be shown what works and what doesn't work. Once you understand these simple concepts, you too can make money and become wealthy. Unfortunately, too many people who want to become rich don't know this, and so they try wacky get-rich-quick schemes that never work.

Q: Once you define your financial goals, how do you go about achieving them?

A: Financial success begins with setting goals and by that I mean tangible, life-changing goals. Merely saying, "I want to be rich" is not a goal. "I want to own and live in $200,000 home within five years" is a goal: It is specific, it is tangible, it is attainable, and most important, it has a date. A goal is not a goal until you assign a date to it and write it down. The key is to stay focused on your goal and not become distracted. By focusing on what you really want, you won't notice that you've given up things that really weren't all that important to you, but which were interfering with your ability to achieve your goal.

Q: What is the biggest mistake people make in trying to achieve financial freedom? How can these mistakes be avoided?

A: The biggest mistake people make is procrastination. People simply delay getting started. They figure they have plenty of time, or they hope they'll have more money later to make it easier getting started. What many people fail to understand is that time is the biggest weapon they have in their fight to become rich, and that giving away time is the main reason people stay poor. And then, when people finally understand this point, they often get frustrated that they haven't started sooner, and they can begin to feel that it's too late. Such attitudes merely keep poor people poor. Instead, you've got to realize that you have the rest of your life ahead of you. Forget the past, focus on the future, and get started now!

Q: Why is the subject of money so emotionally charged?

A: Money is laced with your feelings of self-worth, your emotional stability, and it plays into the power in your relationships. Our society equates success with financial reward, often to the exclusion of family, health and spirit. One of the best ways to help yourself become wealthy is to first understand that financial success is only one part of success; those who focus solely on money rarely attain all that they seek, and the few who do quickly discover that money does not buy happiness.

Read an Excerpt

Have you ever gotten into a cab but refused to tell the driver where you want to go? Of course not. The whole point of hailing a cab is to have the driver help you get to your destination. You tell him your goal, and the cabbie both develops the plan for getting you there and implements it for you.

Financial planning operates the same way. Thus, if you don't have goals, the planning effort is as pointless as asking a cabbie to drive you around town, with no destination in mind.

I bet you can tell me what surveys reveal are the top three reasons people save money. They are:

1. To buy a home
   
2. To pay for college
   
3. To afford a comfortable retirement
   

If you were to expand this list, you could add:

1. wedding costs
   
2. capital expenses, such as a car
   
3. celebrations, such as a couple's 50th anniversary
   
4. vacations
   
5. major medical expenses
   
6. elder care costs
   
7. and, ultimately, leaving your money to your kids and/or other heirs.

Each of the above is a common reason why people save and invest. Each requires or constitutes a set of goals. And when combined, each fits into an overall financial plan.

But one thing bothers me about this entire list. And I imagine it bothers you, too. You know what the problem is?

Simple: The entire list is boring.

I mean, really boring. Yeah, I'll grow up. Buy a car. Get married. Have kids. Pay for college. Maybe foot the bill for a wedding or two. Retire. Wither away in some old-age home. Die.

And to make this even more fun, I'm supposed to pay some financial planner to tell me I can't afford it.

There's more to life than this, isn't there? Tell me there is! Please! Yes, there is much more to life than obligation and responsibility. There is also personal fulfillment and happiness. In fact, it's partly why our nation was founded.

In the Declaration of Independence, the founders of our nation recognized our right to "life, liberty and the pursuit of happiness."

The pursuit of happiness.

The document doesn't say anything about financial planning.

This is what makes the United States of America the greatest nation on earth. If anyone ever disputed that notion, no one has dared do so since September 11, 2001. On that day, our lives changed forever. At some point -- was it days? weeks? I can't remember -- I began wondering if this book's message would still be valid. So, I reread my manuscript, and discovered that you still need the message this book offers you, and that perhaps you need to hear this message even more so than before that horrible day.

That's because this book is all about setting and achieving goals. More than ever, you need to focus on your future. But as you read, you'll see that my emphasis on goal-setting is of a personal, and in many cases, materialistic nature. And in the aftermath of September 11, I suspect that many of us will have replaced many such goals with different, more fundamental ones. Where in the past goals might have pertained to beach houses, fancy cars and exotic vacations, people increasingly are considering goals that involve their communities, charities and families. All of this is healthy, and as you'll see as you read on, it is entirely consistent with my message.

Life is about the future. And our future is bright, thanks to the incredible foresight of our nation's founders. So, let's return to our nation's roots -- and begin our journey, a journey in the pursuit of happiness.