Friday, January 19, 2007

Managing to be Wealthy - book review

Managing to be Wealthy - Putting Your Financial Plan-and Planner-to Work for You - John Sestina, CFP,ChFC

I love this book, I would, I am a worksheet junkie. I think that was what drew me to 31 days to fix your finances. I have contemplated getting rid of this book several times (every time we move I have pared down our massive media collection) but I continue to hold on to it.

I have read this book cover to cover at least once and go back to reference it often, it is a great book. Mr. Sestina is a respected professional in the Financial Planning world. A quote from the back cover "Don't mistake this for just another book on getting your financial life in order. John Sestina is one of the fathers of today's financial planning're getting it from the horse's mouth"- David J. Drucker, MBA, CFP, President, Sunset Financial Management, Inc. Albuquerque, New Mexico.

Before I get too far I will point out that yes, I am aware that he is also a Quixtar/Amway Diamond. Honestly, if it weren't for that fact I probably never would have heard of him. I have heard him speak on numerous occasions.

It was his occupation as a financial planner that led to his involvement in the first place, I believe the story was that he was looking out for the welfare of a client & attended an opportunity meeting. I do not recall what happened with the
client over the years, but John & his wife built a successful Amway business, he was building his Financial Planning Business as well SO, that aside, there are many people that look to him to plan their finances (including some big name former NFL players*see ESPN link at bottom). If he can handle their money, I am surely going to listen to the free advice! (well at least the price of the book!)

Ok, enough said, it doesn't matter who speaks the good advice, as long as it's good, does it?

So why am I writing about a book that has been out since 1993? Well, because I am also reading Rich Woman: A Book on Investing for Women - Because I Hate Being Told What to Do! as I may have mentioned before. Mrs. Kiyosaki continually mentions educating yourself on what investing is all about, learn the lingo, etc... Well,
this book does a lot of that. He covers saving for college, retirement, future, liabilities, taxes, estate planning,investing, businesses, and when to consult a professional.

The book begins with the six steps to financial freedom
1. What do You want? identify Financial & Personal Goals
2. What do you have now? Collect Information
3. What's holding you back? Consider problem areas
4. How do you get what you want? Develop written recommendations and alternate solutions
5. Put your plan into action
6. Is it working? Review the plan

I think the only problem I have with this book is that the Appendix D: You need a second business, is just that, an appendix & D no less! I think that is one of the most important points in the book. Sure it was put in as a way to convince you to get into their business, but there is a walk through of the process on deciding what business is right for you.

Maybe it doesn't need to be a "second" business forever, but business ownership (especially the sole proprietorship type of business he recommends) is the best way I have found to make a little money on top of your "job" and to keep even more money by way of tax deductions. The business vehicle mileage deduction for 2006 tax returns is 44.5 cents per mile. Mileage alone is worth the investment. I was involved in a home based candle business for 2 months in 2006, I racked up over 300 miles. The value of the miles was more than the commissions I earned (therefore I stopped doing it, but we still have other business ventures.)

He also touches on how you can shift your income by employing your children. Obviously this needs to be a valid and believable thing or the IRS will red flag you in seconds. I haven't used this benefit yet, as my children have been too young. But the 7 year old is starting to help, he was getting paid to shred papers, before we got the coal furnace. I wasn't paying him $10 an hour, more like $0.25 a session (hey he was 5 and we didn't end up needing the deduction that year anyways!)

I am spending 2007 putting MY financial house in order & this is my Go-to-Book. The good news for you if you don't already have it & want it, there are bunches of used ones available on!

This book is cited in the 2004 books Midlife Mamas on the Moon: Celebrate Great Health, Friendships, Sex, and Money and Launch Your Second Life by Sunny Hersh
and Surviving Financial Disasters: Bankruptcy, Foreclosure, Eviction, Auto Repossession, Excessive Debts and Much Moreby Tiffany R. Love

Some links to articles where Mr. Sestina was interviewed.

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