Tuesday, January 31, 2012

Retirement Quest, Make Better Decisions by John Hauserman, a Review

 Retirement Quest, Make Better Decisions is a valuable book. I didn’t realize at first that it could be valuable to me because my eyes glazed over as I read the first few chapters. I began to wonder why I had been asked to review it, as it seemed to have been written for the monetarily sophisticated, people already conversant with financial planning. In fact, John Hauserman states in Chapter 5, “This book is intended for mature readers who have already achieved a reasonable level of financial security and responsibility, and for younger people who are in a wealth building mode.”

My eyes unglazed when I hit Chapter 6, though, when Hauserman began explaining the basics of financial instruments, how they work, and the strengths and weaknesses of each. I didn’t know, for example, about bonds and coupon rates, and how one of the primary determinants of a bond’s coupon rate is the creditworthiness of the bond issuer. As Hauserman says, “This is a very significant factor, and responsible money management therefore generally dictates that one not necessarily choose the highest-yielding bond.” Who knew?

The book is full of lots of sound information. Throughout, Hauserman preaches the gospel of diversification—even in your cash holdings. Now, you may think that a cash holding is, well, cash. But you will find that isn’t necessarily so when you read the book. He also stresses the need for discipline and regularly rebalancing, which he explains on page 54.

Hauserman points out that younger people need to step up to shoulder the responsibility for their own retirement, for, by law, ”once the [Social Security] trust fund is exhausted—it is anticipated that this will happen around the year 2030—the benefit formula is to be rewritten based upon the economics of the program at that time. In simple terms, this means that we should expect, if all goes well, that around the year 2030 we will experience a benefit cut of about 50%.”

Hauserman also makes the point that this is a way citizens can not only serve themselves but can serve their country, for the republic’s economic well being is tied to the economic health of its citizens. He quotes John F. Kennedy’s “Ask not what you can do for your Country” speech in this context.

Retirement Quest is a thoughtful book, building on a solid philosophy. The writing is clear, but for someone like me, or for young people in a ‘wealth building mode,’ I would say to start at Chapter 6, read to the end, and then go back and read Chapters 1-5.

Visit John Houserman's web site at:  http://retirementquest.com/home.aspx   
You can purchase Retirement Quest, Make Better Decisions by clicking here.

Disclaimer: Though a copy of this book was given to me to review, the fact that I received it free had no bearing on the opinions expressed.
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1 comment:

  1. Interesting stuff. In addition to my love of words, I'm a numbers girl. I think I would find this book very interesting.