The Difference

[Runum]

I've been listening to an interview with Jean Chatzky. She mentions her new book "The Difference, How Anyone Can prosper in Even the Toughest Times" I like her stuff until the point where she starts spouting off the 401k, diversification mantra.

I bought the book because I wanted to see what her research has shown about the differences between the economic classes in our country. It's a short book, I may finish it tonight. I will post a review when finished.:cheers:

 

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[lexingtonjames]

Jean Chatzky... :002:

 

[Runum]

Chapter 1 Forbes 400 – A lot of the people on the list in 1982 were not on it in 2007. Wealth is very fluid and changing. There are several different paths taken to achieve that wealth. Women are still behind but rapidly gaining in pay and net worth. Old wealthy family’s fortunes are divided among the heirs. Central question then, why do some people make it to wealth and some do not? Author tried to answer by doing a study about 5000 people. The study looked at many different facets of life to try to determine the difference. Result was 4 different groups: wealthy, financially comfortable, paycheck to paycheck, and further in debtors. Most Americans fit into the last 2 groups. Author identified 20 specific differences between the top 2 groups and those that struggle financially. Author also identified another group called “The Movers” that moved from economic group to other groups and why they were able to move.
Author then began to specifically identify the four groups. She included traits and habits of each group. She gave statistics about the people in each group moving up and down the financial spectrum. She further extended that where you are in your life is a matter of choice.
I generally agree with what Chatzky has written in Chapter 1. The problem with any publication that tries to divide people into 4 groups is that you may not agree with the dividing lines. In order to make sense of the data she had to identify what wealthy means numerically. Many will not agree with her strict definition of what wealthy is. It is interesting to read about some of the differences between the groups. Many of her findings directly correlate with what we have been about here.

 

[Runum]

Chapter 2 Chatzky continues on with the fact that your lot in life is the result of choices and you have freedom of choice. However, with that choice must come ambition. How much do you want it?
After you decide you want it then comes the question of how much will it cost you. You will immediately come into goal conflicts. Your long term, good goals will collide with you short term wants. In most cases the short term wants win. In order to combat this you have to set up small steps and small rewards for completing those small steps. You will also have to tell the difference between your goals and fantasies. Once you have your goals you set up the small steps as a kind of road map to success. Also, you really need to focus on one goal. If you split your attention in several areas you won’t be as effective. Chatzky says that goals that provide value for mankind are better to work for than purely selfish goals.
This will bring you to the why. Why do you want to achieve wealth or whatever? After that hurdle you need to be on guard for your potential stumbling blocks and frivolous diversions that drain your finances.
Chatzky then offers a short strategy guide to get started.
Again, a lot of this is what we agree with on this forum. Define your goals, how to achieve them, and watch out for doo-dads(from RDPD). :cheers:

 

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