How to Think About Money

THERE ARE THOSE WHO think the goal is to beat the market and amass as much wealth as possible, that street smarts and hard work ensure investment success, and that the road to happiness is paved with more of everything.

And then there are those who get it.

Want a more prosperous, less stressful financial life? How to Think About Money is here to help. The book is available as a $13.99 paperback, as well as a $9.99 Kindle edition and $9.99 Nook edition. An international edition, available outside the U.S. and Canada, was published in October 2018 and can be ordered from Amazon in the U.K. and directly from the publisher, Harriman House.

An international edition was published by Harriman House in the U.K. in October 2018.

The book’s goal: to provide readers with a coherent way to think about their finances, so they worry less about money, make smarter financial choices and squeeze more happiness out of the dollars that they have. How to Think About Money, which was named 2017’s adult book of the year by the Institute for Financial Literacy, focuses on five key steps:

Step No. 1: Buy More Happiness. There is a connection between money and happiness, but the relationship is far messier than most people imagine. If we want to get the most out of our dollars, we need to think much harder about how we spend and which goals we pursue.

Step No. 2: Bet on a Long Life. Most of us will enjoy an amazingly long life that will often see us pursue more than one career and spend perhaps 20 or 30 years in retirement. That has big implications for how we handle our money.

Step No. 3: Rewire Your Brain. Thanks to the instincts we inherited from our hunter-gatherer ancestors, we are hardwired to fail both as savers and as investors. Result: It takes great self-discipline—or, in the absence of self-discipline, a certain amount of self-deception—to manage money successfully.

Step No. 4: Think (Really, Really) Big. We divvy up our financial life into a series of buckets, thinking of our insurance policies as separate from our bank accounts, and our stock-bond investment mix as unrelated to our debts. But to manage money prudently and make the right tradeoffs, we need to bring together all of these financial pieces—and the central organizing principle should be our paycheck, or lack thereof.

Step No. 5: To Win, Don’t Lose. To get ahead financially, we should think less about making our money grow and more about the dangers that could derail our financial future. This doesn’t mean we shouldn’t take risk by, say, investing heavily in the stock market or taking on a hefty mortgage to buy our first home. But even as we save and invest for the future, we should also aim to minimize potential subtractions from our wealth. Those subtractions might appear modest, like mutual fund expenses and stock trading costs, or they can be huge, such as selling shares at a market bottom or becoming disabled and yet not having disability insurance. Either way, there’s the potential for great financial damage.

How to Think About Money might be the best financial book I’ve read in the last five years. If I had written a book as good as this one, I would consider my life’s work complete.”—James Dahle,

“My favorite personal finance book of 2016.”—Ben Carlson,

“Clements spent 20 years at the Wall Street Journal, where he was the newspaper’s personal-finance columnist. Those bona fides and his long history of giving smart advice makes this a must read.”—Barry Ritholtz, BloombergView

How To Think About Money offers readers exactly that—five easy steps to help you think differently about your finances and how to achieve financial independence.”—Robb Engen,

“A refreshing take on the philosophical side of how we save, spend and enjoy our money.”—

“Now why didn’t I think of that? That’s what you’ll ask yourself after you read Jonathan Clements’s fine new book. Its beauty lies in the commonsense and wisdom that is summed up in just five simple steps that will help you to earn your financial independence. Easy to understand, essential to follow.”—John C. Bogle, founder, The Vanguard Group

“Jonathan Clements brings his intelligence, insight and commonsense to How to Think About Money, which is packed with wisdom and great guidance. Read it and reap the rewards in the years and decades ahead.”—Eric Tyson, author of Personal Finance for Dummies and Investing for Dummies

How to Think About Money is financial feng shui —a blueprint for harmonizing all the aspects of personal finance into a balanced way of approaching and managing money. I found myself measuring my own attitudes and beliefs against the yardsticks in Jonathan Clements’s book, and was pleased to find that we’re on the same page. As someone who has written extensively about young people and money, I’d especially recommend the book to generations Y and Z. But anyone who feels overwhelmed by the challenges of today’s world can benefit from Clements’s advice on how to make smart financial choices, as well as how to develop, in his words, a ‘coherent way to think about their financial life’.”—Janet Bodnar, editor, Kiplinger’s Personal Finance magazine

“Jonathan Clements is one of the greatest financial consumer advocates of our time, not only because of his emphasis on a practical and commonsense approach to personal finance, but because his message is delivered in a welcoming, easy-to-understand manner. That approach moves his readers to take the most important step toward winning in the personal finance world—taking ownership of one’s financial life and following that with action.”—Peter Mallouk, president of Creative Planning and author of The 5 Mistakes Every Investor Makes and How to Avoid Them

“Concise, important and true. Jonathan Clements provides you a path not just to better finances, but to a better life.”—Terry Burnham, finance professor, Chapman University, and author of Mean Markets and Lizard Brains

“Jonathan Clements writes so well and thinks so clearly that even financial planning, saving, and wise decisions are almost fun to think through with him as our guide.”—Charles Ellis, author of Winning the Loser’s Game

“In How to Think About Money, Jonathan Clements, one of the premier financial writers of our times, provides readers with a roadmap for a successful financial life. It’s an easy read that can result in changing the way readers look at investing and life. Read it and reap.”—Mel Lindauer, columnist and co-author of The Bogleheads’ Guide to Investing and The Bogleheads’ Guide to Retirement Planning

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