Book Review: Living Your Dream by Larry Wilson
Until I read Living Your Dream by Larry Wilson, I hadn’t found an all-purpose personal finance 101 book that delivers practical information in enough depth and breadth that I could responsibly recommend it. I’m happy to say that this streak has ended, and would recommend this book to almost everyone (with a few caveats, because do you even know me?)
Almost anyone with a passing interest in personal finance has a story about that one book that opened their eyes or changed their behaviour and will enthusiastically recommend it as the best one for everyone else to start with. Mine’s The Wealthy Barber Returns, in case you were curious. But once you’ve read one or two (or 24) of these books you realize that – similar to other experiences – the book is important to you because it was your first, and might not be as universally relevant as it used to seem.
Many of our clients come to us after doing their best to figure out what they should do on their own, and their first stop has almost always been one of these books. Sometimes that’s great, other times the book they stumbled upon or that was pressed into their hands by an over-eager relative has done material damage that we have to undo before they can move forward with a realistic financial plan.
The books that do damage are ones where the author has clearly never advised an actual human being about finance before, equates wealth exclusively with success, worth, and intelligence, assumes that their own white, middle-class experience is universal, or advertises itself as “a practical guide to personal finance” or some such but leaves out whole sections of relevant information without bothering to explain why.
The few truly great books I’ve found have zeroed in on handling one particular aspect of personal finance really well without pretending that it’s the only thing you need to master for a successful, fulfilled life. These include:
- The Value of Simple, by John Robertson, which focuses on choosing and executing a self-directed investment portfolio that suits your circumstances and plan, and prioritizes good enough simplicity over perfectly optimized complexity.
- Living Debt Free, by Shannon Lee Simmons, which focuses on getting and staying out of debt without any of the usual finger-wagging and shame
- Retirement Income for Life, by Fred Vettese, which focuses on enhancing the amount, safety and tax-efficiency of retirement income (but only for people who aren’t or can’t be eligible for the Guaranteed Income Supplement)
- Your Digital Undertaker, by Sharon Hartung, which focuses on managing your own estate planning as well as your executor’s job in administering it as two separate but related projects, complete with project management checklists
- Worry-Free Money, also by Shannon Lee Simmons, which focuses on the fact that how we spend our money can be shaped by our unconscious defaults or our conscious values, and how to structure our spending to avoid the former in favour of the latter.
In Living Debt Free, Wilson does a great job addressing every key area of personal financial planning, starting with the choices you make throughout your life and moving into the details of spending, debt, investing, taxes, retirement, insurance, Wills, trusts, and substitute decision makers. With a few notable exceptions (below), Wilson goes as deep into each topic as is necessary to help readers understand not only that the right answer for them depends, but what it actually depends on.
You won’t walk away from this book with a fully articulated financial and estate plan, but – provided you pay attention and keep your learning hat on – you’ll have zeroed in on the key topics that matter for you and be ready to take the next crucial steps of developing your own financial plan, evaluating what help, if any, you need from professionals, and a basic understanding of what said professionals should be able to do for you to be worth engaging.
Who should read it?
This is a solid book that manages to address almost every area of personal finance (even the ones that often get ignored), digs deep enough to be useful, points out other resources to dig deeper, and consistently repeats the message that rules change and you have to be actively engaged in your own planning, even when you’re working with professionals. There’s no other real contender with this breadth and depth, and almost everyone will benefit from not just reading it but taking the time to absorb it.
It does, however suffer from two key weaknesses that take some of the shine off of it for me.
First is the problem of tone, in which the author valiantly tries to downplay his privileged position in society as a white, able-bodied man of a certain generation by using the word “modest” about himself, his choices, and the choices he thinks are right for you to make, while presenting the inevitable calculation of how much you could have earned in the stock market if only you didn’t buy fast food, “fancy coffee”, or smokes and invested the money instead (dear lord in heaven can someone please use golf games and trips to the cottage to make this point some day?) and offering advice like “pick the field of study that resulted in the highest earnings for graduates in the past.” OK boomer.
The second weakness is that Wilson, like so many people in the financial advice profession, seems to think that personal finance isn’t a topic that people who are disabled or have a low income are interested in.
Wilson himself articulates the difficulty in writing a universally relevant book about personal finance in Canada in his introduction like so:
“Much of what I have included in this text is based on my opinion, which in turn is based on my education and experience. I don’t know about you, but I have been known to make the odd mistake, and it could well be proven that some of what I am presenting here turns out to be suboptimal in one way, shape or form. Ths book covers topic areas that, if discussed in a fully comprehensive manner, would require several volumes. Clearly, this book is too succinct to offer fulsome coverage of all the topics touched upon. I will, within these pages, point you to the right direction to obtain further information where I feel it is important to do so.” (Emphasis mine)
Whereas there’s not even a single mention of Registered Disability Savings Plans, and only a brief slide by the Guaranteed Income Supplement with no additional resources offered (like John Stapleton’s guide for Low Income Retirement Planning), Wilson spends a whole page on avoiding the Old Age Security clawback and even offers eight tips for arranging your other sources of retirement income to do so.
According to the 2019 Report of Federal Expenditures 1.2 million individuals claimed the Disability Tax Credit in 2015 (some of those claims are doubled up since this credit can be shared between the eligible person and a spouse or parent). That same year, 2.1 million people receive the Guaranteed Income Supplement.
In 2017 only 600,000 people over the age of 65 had their Old Age Security benefits clawed back. (Source: Statistics Canada. Table 11-10-0239-01 Income of individuals by age group, sex and income source, Canada, provinces and selected census metropolitan areas)
Author friends: Your feelings about what’s important to include don’t enter into it. Stop spilling ink on helping 600,000 people keep benefits they aren’t entitled to at the expense of the 3.3 million people who need more help than they’re getting right now.
If you only have time to read one chapter:
You’re going to roll your eyes at this further evidence of my bias as an advice-only financial planner but I’m going to recommend Part IX – Professional Advice. This is an outstanding overview of the advice landscape in Canada, and the value of assembling a professional team who will uphold your best interests over theirs.
If that answer doesn’t satisfy, Wilson has done a remarkable job summarizing the takeaways for each chapter, so a quick flip through the book should result in at least one chapter that really speaks to you.
If you only have time to read one paragraph:
“You need to be an active participant in this exercise if you want to get the end result you desire for those people and organizations that are important in your life. You don’t need to be intimidated going through this process – lawyers rely on clients to make a living and are likely to need your business more than you need any particular one of them. You are the boss. You decide who you want to work with.”
(You can read this paragraph specifically about the Will planning process; however, I think it’s relevant to any exercise in obtaining professional advice. You need to be engaged in the process in order to get anything actually useful out of it, and you need to choose a professional that recognizes and welcomes that fact or find another one)
(Chapter 35: The Will, page 783 iBooks version)
If you only have time to read one sentence:
“One certainty is that your financial life will happen; it is entirely your decision if it happens on purpose or by default.”
(Chapter 1: The Limitations of this Text, page 32 iBooks version)