Quicken 2008 for Dummies Book

This book challenges the conventional wisdom of traditional retirement planning (and asset planning in general) in a novel, logical way, which is always interesting to me for challenging my views.

The main premise of the book is that consumption (ie spending) should be smoothed over your lifetime and you should plan your financial future to maximize that (steady) consumption with the least amount of risk. This idea of consuming the same amount throughout your lifetime is a new concept, but really makes sense. I had previously thought (/assumed) that you should live below your means / save / etc with the goal of having a nice, comfortable retirement (and increasing your consumption as you age / increase salary / become more secure financially). However, since consumption should be correlated positively with happiness (if you aren't happier with the more you spend, then you should spend less to be happy and not really have any financial problems), this means you are delaying a good portion of current happiness for future happiness when you are older.

The idea of restraining future happiness in exchange for abundant future happiness is likely not the ideal solution. Since the marginal utility curve for happiness / consumption isn't linear, this implies that the ideal (given a number of assumptions) consumption pattern should be constant over time to maximize happiness (for a given amount of money). While not explicitly outlined in the book, this is pretty straightforward to conceptualize.

This is the basic premise behind the book and the rest goes on to dispelling financial myths (many easy enough to do already), giving (good, but not too relevant for me yet) tips on how to maximize retirement benefits when near retirement age and helping calculate this level of "ideal consumption". This makes the book a quick read (can skip/skim over the less relevant parts), but I also found the book a bit lacking in numerical examples so that one could model the scenarios themselves. Instead the authors (continually) push their product "ESPlanner" which calculates this level for you. There's a free version which I might try out just to see where my consumption lies relative to the "ideal" level.

A downfall is that the book doesn't offer clear ways/suggestions to realize "increased happiness" from increased consumption. After all, if I'm told I need to actually spend 25% more than I currently do to have smooth consumption, there are a lot of ways I could do that, but buying Veuve Cliquot / Silver Oak instead of Prosecco / $15 cabernet aren't going to actually make me meaningfully happier. I'd argue in cases like that, alternative "solutions" to maximizing life happiness (through finances) would be to retire earlier / work less / etc.

I also liked that this book encouraged critical thinking in general. For example, one part is "Putting a price on [x]". Ie how much is that marriage worth, dog worth, etc. While people might not like to reduce feelings and emotions to money, in the end, there is a value there, so it's best to quantify it (sure you love your dog, but is it worth $1mm?). Once you can quantify things like that, you can make better financial decisions to make yourself happy. (I know, I know, it sounds like such a cold, calculated method of making decisions, blah, blah).

I'd recommend this book for anyone who likes thinking critically about financial planning / retirement planning. It's not for beginners, but does offer a compelling viewpoint which should be acknowledged, at the very least.