The Simple Dollar: How One Man Wiped Out His Debts and Achieved the Life of His Dreams

208 Pages·2010·0.99 MB·English

by  Trent Hamm

The Simple Dollar
How One Man Wiped Out His Debts and Achieved
the Life of His Dreams
Trent Hamm
Vice President, Publisher: Tim Moore
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© 2010 by Pearson Education, Inc.
Publishing as FT Press
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Printed in the United States of America
First Printing June 2010
ISBN-10: 0-13-705425-4
ISBN-13: 978-0-13-705425-1
Pearson Education LTD.
Pearson Education Australia PTY, Limited.
Pearson Education Singapore, Pte. Ltd.
Pearson Education North Asia, Ltd.
Pearson Education Canada, Ltd.
Pearson Educación de Mexico, S.A. de C.V.
Pearson Education—Japan
Pearson Education Malaysia, Pte. Ltd.
Library of Congress Cataloging-in-Publication Data
Hamm, Trent.
The simple dollar : how one man wiped out his debts and achieved the life of his
dreams
> Trent Hamm.
p. cm.
ISBN 978-0-13-705425-1 (pbk. : alk. paper) 1. Consumer credit. 2. Debtor and
creditor. 3.
Finance, Personal. I. Title.
HG3755.H237 2010
332.024’02—dc22
2010005204
To Randy Byrn, who not only taught me how to write but made me
believe I could
Contents
Introduction
Chapter 1. Prison Made of Plastic
Get Everyone on Board
Reduce Your Interest Rates
A Plan for Debt Repayment
Get a Rope
Snowflaking
Five Steps for Today
Chapter 2. What’s Missing?
What Do We Really Need?
Five Steps Toward Happiness
Chapter 3. A Visit from the Black Swan
Our Lives Are More Random Than We Think
Unprepared for the Good
Unprepared for the Bad
Sources of Personal Risk
Maximizing Luck
The Need for Reliability
Preparing Yourself
Chapter 4. The Power of Goals in a Random World
The Changing Value of Long-Term Goals
The Power of Self-Reliance
The Key: Short-Term Goals
Five Steps Toward Your Dreams
Chapter 5. Running to Stand Still
The Changing Nature of Income
Your True Hourly Wage
The Things We Sacrifice
Your Future Self Isn’t Reliable
The Power of Today
Five Steps for Breaking Out
Chapter 6. With or Without You
The Broadening of Community
The “Tragedy of the Commons”
The Value of a Relationship
Social Intelligence
Getting Started
Chapter 7. Minding the Gap
Spending Less Than You Earn
Mind the Gap
Wants and Needs
The Frugalist and the Capitalist
Budgeting
Five Steps Toward Minding the Gap
Chapter 8. Frugality as Framework
The Difference Between Frugal and Cheap
Frugality as a Framework for Freedom
What’s Essential?
The Peak-End Rule and Life Experiences
Overvaluing Routine Experiences
Frugality and Food
Trimming Your Utility Bills
Housing and Transportation
Get Clever with Your Entertainment
The Five Fundamental Rules of Frugality
Chapter 9. Cultivating People and Opportunities
Negative Relationships
Positive Relationships
From a Negative to a Positive: Cultivating Opportunities
Five Ways to Maximize Your Positive Relationships
Chapter 10. The New Career Rules
Where Is Your Loyalty?
A Community of Peers
The Power Shift
Learning, Growing, and Synthesizing
Passion
Deliberate Practice
Transferable Skills
Finding (and Being) a Mentor
Five Steps on a Journey of a Thousand Miles
Chapter 11. Life Design—Building Something New
Building a Solid Foundation
The Rules of Your Life
Rules Are Made to Be Broken
Shoot the Moon
Five Steps to Designing a New Life
Chapter 12. Managing the Gap
Avoiding Lifestyle Inflation
The Crossover Point
Protecting What You Have
Five Methods for Maintaining the Gap
Chapter 13. The Personal-Financial Boundary
Communication
Honesty
Time
Friends, Family, and Lending Money
Five Steps to Getting Your Relationships on Track
Chapter 14. Recasting Retirement
Retirement Rarely Equates to Idleness
What’s Your Next Act?
Recasting Retirement Savings
Retirement Savings Versus College Savings
Revisiting the Crossover Point
Five New Steps Toward “Retirement”
Chapter 15. The New Path to Adulthood
Setting Your Child Apart—Money Lessons
Setting Your Child Apart—A Growth Mindset
Setting Your Child Apart—Self-Reliance
Setting Your Child Apart—Self-Learning
Setting Your Child Apart—Unique Experiences
Setting Your Child Apart—Educational Priorities
Five Little Steps
Chapter 16. The Power of Giving
Giving Is Part of Participating in a Community
Doing It Different
Five Ways to Get Started
Chapter 17. Holding You Back
What We Say Versus What We Do
Passive Barriers
Clutter
Focus
Choosing to Be Happy
Five Ways to Overcome Your Barriers
Chapter 18. Original of the Species
Experiences Trump Things
Insanity: Doing the Same Thing and Expecting Different Results
Success Is About Differentiation
Stop Caring What Other People Think
“Live Like No One Else So You Can Live Like No One Else”
Five Steps for Going Your Own Way
Chapter 19. 11 O’Clock Tick Tock
The Single Most Important Part of Personal Finance Is Truly Knowing
Yourself
The Second Most Important Part of Personal Finance Is Setting Clear,