How To Be Smart With Your Money

Orion Publishing Company, Published 2009

Written By Duncan Bannatyne

England

5 Stars = LIFE CHANGING!

How the blurb describes the book:
It’s not what you’ve got, it’s what you do with it that counts, and today’s turbulent financial markets show just how important it is to be in control of your money. Star of Dragon’s Den Duncan Bannatyne knows more about money than most, having built a one billion business empire from scratch.

Being clever with your cash isn’t difficult and here Bannatyne reveals the secrets of how to make the most of your money by focussing on:
- Earning
- Spending
- Borrowing
- Investing
- Saving
- Budgeting

Whether you’re 18 or 80, Bannatyne’s no nonsense; jargon free advice will help you make choices, whether you just want more cash in your pocket or are looking to achieve financial security.

How to be smart with your money – the indispensable guide on how to make your money work harder for you.

Mr Home Budget’s Review:
So what can you learn about home budgeting from a billionaire. Surely anything they have to say could not relate to your life. But this book is not written on how to make a billion dollars or how to start and run a successful business. This book is about how to make your budget work. And if you have already checked out the star review, it does just that.

While the author, Duncan Bannatyne is now worth over one billion dollars. He wasn’t always so good with his money. In fact, until he hit 31, he was basically broke and had no idea about money management. So just like you and me, he had to learn about it one-step at a time.

The book holds your hand and takes you through how to set up a good family budget from start to finish. And while it is a UK written book for that audience, 95% of the ideas will translate into any country, regardless. The one thing which struck me over and over again was this was written by a billionaire. You constantly have to remind yourself of this fact whilst reading the book. As too often, the advice is the same as advice which could be given to you by your next-door neighbour.

Even now with a billion dollars to his name, he talks about little things which a lot of people wouldn’t do even with far less to their name. For example, he talks about buying a high-end camera for a holiday to Africa. After shopping around to get the best price, he decided to purchase a bunch of accessories (carry case, stand, and extra batteries) to go along with the purchase. But after being informed of a $16 fee to get the extra batteries delivered as they were out of stock, he backed out of the sale. He notes it was unfair to charge him extra money for delivery of a product that he was going to buy. As he notes, $16 is $16 no matter how much money you have.

One point he really tries to hammer home right throughout the book is just being smart and having a good paying job does not mean you’re good with money. In fact he has come across a lot of extremely smart people who have woeful budgeting skills. On the other side of the coin, there are many people who are blue-collar workers, who have their house paid off and cash in the bank. All because they know the secret to any good home budget, “you must not spend more than you earn.” In his opinion, there are a lot of people who openly admit they are not good with money. However, these people are just giving themselves an excuse not to have to think about budgeting. By always saying that they are not good with money, it allows them not to have to worry about it. Thus allowing them to continue spending when they want and on whatever they wanted. As he notes on page 55, “For every smart budgeter I know who calculates how much they need to put aside, I know another one who blows their money as soon as they earn it and are virtually penniless between paydays.”

This is one paragraph which really stood out: (Remember this is advice from a billionaire) “How many times in the past year have you had to deal with unexpected expenses? Maybe your roof leaked, your car broke down or your washing machine packed up. I think it’s pretty hard these days to go for a year without finding yourself shelling out for something you hadn’t budgeted for. Having a rainy day fund for these inevitable expenses will no longer cause you quite as much grief. And having the money handy means you won’t have to borrow to pay for your emergency, which means you won’t be paying unnecessary interest. In fact, you will be earning interest if you put your rainy day money into a savings account rather than a piggy bank.

Because the whole point of rainy day money is that you will need it at short notice, you’ll need to keep it in an instant access savings account. This means you won’t get the best rate of interest on it – you can get better rates if you are prepared to tie your savings up for a fixed period – but at least you won’t have any penalties to pay when you need to get at your money.”

And the following on page 87, sends a message on how to do a good budget: “For a couple of months – even just a couple of weeks would help – have a go at keeping a record of everything you spend money on. Not only will this help you see how quickly you’re eating into your monthly budget, but it will almost certainly reveal where your spending is under control and where you lose control. Most of us have a weak spot in our spending – computer games, betting, shoes, downloading music, cake, and keeping a record is the best way I know to identify the areas of your financial life where you throw caution to the wind.”

Overall you are doing yourself no favours by not reading this book. And it’s great to see that there are people with massive amounts of money who really have not forgotton where they came from.

Pros:
The book is written in such a simple manner; it really is quite addictive.
You can’t help but increase your bank balance, even by only using a handful of ideas.
Gives you a great insight into Duncan Bannatyne’s rise to success, including some of his harder times with money in his life.

Cons:
Because it’s written for a UK reader, sometimes the content may go over your head.