Your Money Milestones - A Guide to Making the 9 Most Important Financial Decisions of Your Life

"Your Money Milestones: A Guide To Making The 9 Most Important Financial Decisions Of Your Life" by Moshe A. Milevsky, PH.D. is not like so many of the personal finance books you find. Milevsky states that he deliberately didn't include the common, and he says tiresome, financial advice you find in so many other places. Advice such as "buy low and sell high" or "live within your financial means." Nor does he include "buy term insurance and invest the difference" or "buy stocks for the long run." He also omits "keep an emergency reserve of three month's salary" and "education pays." Those topics are NOT what this book is about.

I've read many books on personal finance, and I've seen all the above numerous times. Milevsky's "Your Money Milestones" really is different from most of the finance books I've seen. Milevsky does have a PH.D. and he's a university professor. At times that does come through in this book. It reads a bit like an academic text in some parts. This is especially true when using his four guiding principles that are based on addition, subtraction, division, and multiplication.

The book has nice main chapters that focus on nine money milestones in a person's life. Milevsky himself says the number 9 is debatable and subjective. A person may have only 7 or maybe 12 important financial milestones during a lifetime. Milvesky says don't quibble about this number. He decided to write about these nine, and that's what the book is about.

The nine milestones the books focuses on are:

1. Is the long term value of an education worth the short-term cost? Interesting chapter on human capital and how investing in it pays off.

2. What is the point of saving money forever? This chapter discusses smoothing consumption and income.

3. How much debt is too much and how much is too little? The chapter does not tell you to get out of debt, but rather discusses optimal debt management strategies.

4. Are kids investments and can marriages diversity? The chapter looks at a couple of family matters in relation to money.

5. Government tax authorities: partners, adversaries, or bazaar merchants? My favorite chapter. His advice about the looking at the after-tax basis needs to be looked at more than people do, and I agree that we want to make sure our perpetual tax partner (the government) doesn't get more than their fair share of our hard earned cash.

6. Can you eat your house or will it ever pay dividends? Buying a house is often one of the biggest financial decisions for most families. Here are some things to think about that aren't taught in many books.

7. Insurance salesmen and warranty peddlers: are they smooth enough? Good advice on insurance and warranties. Story of the salesman trying to sell him a boat policy when he didn't have a boat made me chuckle, because I've seen similar examples.

8. Portfolio construction: what asset class do you belong to? A few things to think about when investing.

9. Retirement: when is it time to shutter the well and close the mine? Pensions and annuities for your later years are an important consideration.

Each chapter has a short summary of how the mathematical principles apply to the concepts in that chapter. Sometimes I felt it was a bit forced to fit into this model. I'm betting if you love math, you'll connect with the principles. If you hate mate, you won't care for them so much.

What I really like about this book is that it looks at some very important money matters differently from most of the financial books on the shelves. Money and our finances are important. It is a major part of all of our lives, some more than others, but important to all. This book makes you look at some of your biggest financial decisions in a different way, and that thinking is extremely important. You don't have to agree with everything he writes or suggests. But thinking about the topics and issues he raises will be more than just an academic exercise. I believe reading this book and thinking about the concepts Milevsky presents will enable you to make better financial decisions when you reach those milestones in your life.

By Alain Burrese