How to Speak Money (eBook)

ALI VELSHI is CNN's Chief Business Correspondent and host ofYour Money. His in-depth reporting on the auto industry was honored with a National Headliner Award for Business & Consumer reporting in 2010. He anchored CNN's coverage of the attempted terror attack on a flight into Detroit, for which CNN was nominated for a 2010 Emmy. He is the author of Gimme My Money Back: Your Guide to Beating the Financial Crisis. CHRISTINE ROMANS is the host of Your Bottom Line, CNN's Saturday morning personal finance and lifestyle program and the money reporter for CNN's American Morning. Her reports are carried on CNN's platforms worldwide. Among her awards is an Emmy for her reporting on outsourcing American jobs. From Timothy Geithner and Venus Williams to Tony Hawk and Russell Simmons, Romans interviews a diverse range of public personalities on financial issues facing Americans. She is the author of Smart Is the New Rich (Wiley), based on her experience covering the financial crisis.

Acknowledgments xi

Introduction xiii

Chapter 1 The Big Picture 1

Money Is Everywhere 2

Understanding Money 4

Where Are You? 5

Getting to Where You Want to Go 6

Getting Started 7

The Key to Wealth: Live Below Your Means 9

Change with the Times 10

It's Up to You 11

Different Strokes, Different Folks 12

Making Your Plan 12

Chapter 2 We Fight About Money, Too 15

A Failure to Communicate 17

How Do You Have a Difficult Conversation? 18

Chapter 3 Gendernomics 27

Shifting Roles 29

Are You Sure We're Talking about the Same Thing? 30

Why Do Smart People Buy Stupid Things? 32

Women and Investing 33

Gendernomics in the Workplace 35

Chapter 4 Speaking Money around the World 39

A Brief History 40

Climbing Up the Ladder 42

A Fish Story 44

Globalization: Good or Bad? 45

What Goes Around Comes Around 48

Who's Zooming Who? 49

Chapter 5 Speaking Money at Work 53

Speak STEM 55

Dirty Jobs 57

Green Jobs 58

Women and Work 60

Getting a Job 61

The Long-Term Unemployed 65

You Wanna Start Something? 67

Not-So-Happy Campers 68

Chapter 6 Speaking Money on Campus 71

High School Then, College Today 72

A College Degree Never Hurt Anyone 74

The Future Starts in Grade School 75

Education for Life 76

How Should You Look at College? 77

Thinking of Changing Fields? 81

Chapter 7 Speaking Money in the Market 87

Cash Equivalents 89

Let's Speak Bonds 91

Price versus Yield 92

The World of Stocks 94

International Investing 95

Stepping into the Market 97

Mutual Funds 98

Index Funds 99

Exchange Traded Funds (ETFs) 102

Do Your Homework! 102

Chapter 8 Speaking Money to Investment Principles 107

Principle 1: There Is a Direct Relationship between Risk and Return 107

Principle 2: Time Is Your Friend 114

Principle 3: Diversifi cation Lowers Your Risk and Improves Your Return 114

Asset Allocation: The Key to Results 116

Chapter 9 Speaking Money in Your Own Portfolio 119

Your Investment Questionnaire 120

Your Model Portfolios 125

The Importance of Rebalancing 128

Financial Advisors--Yes or No? 129

Chapter 10 Speaking Money on the Home Front 135

Buying a Home 138

Rent versus Buy: One Man's Story 145

What If You're Selling? 146

When Is the Best Time to Buy? 149

Chapter 11 Speaking Money on Budget 153

Software Makes Budgeting Easier 155

Here Comes the Rain 156

What Does It Cost to Live? 157

Getting Out of Debt 160

Chapter 12 Speaking Money in Retirement 163

The Historical Perspective 164

Retirement Is Expensive 166

Programs to Fund Your Retirement 168

Play a Waiting Game 171

Social Security: The Nation's Safety Net 173

Summing It Up 174

Living Your Golden Years 175

Afterword 177

Bibliography 179

About the Authors 181

Index 185

"How To Speak Money by Ali Velshi and Christine Romans is a tutorial for the last taboo subject... our money. Ali and Christine remove the mystery and help us understand smart strategies for financial independence, growth, and security. The book fascinates as it teaches. Ali, the dare devil who takes risks and Christine the fiscal conservative who lives consciously. This book should be required education for everyone. People communicate more openly about sex than money. Each person in a relationship, whether business or personal, needs to understand and resolve, different points of view about debt, saving, investing and spending. If men are from Mars and women are from Venus, most of us live on the confused planet of Pluto, when it comes to dollars and sense. How to Speak Money, is the new gift for loved ones, colleagues, non-profits and friends. This Christmas, because of this great new book, the people in my life will finally be speaking the same language in matters of finance. Thank you, Ali and Christine."--Kathy Ireland, CEO and Chief Designer of kathy ireland Worldwide.