Buy This, Not That: How to Spend Your Way to Wealth and Freedom

by Sam Dogen

SPEND YOUR WAY TO FREEDOM LIKE A TRUE FINANCIAL SAMURAI
 
Sam Dogen, creator of the Financial Samurai blog, knows that you need to spend money to make money. He’s taught over 90 million readers how to invest wisely in all facets of life, from education to parenting to relationships to side hustles, even choosing where to work and play.
 
Now, in his Wall Street Journal bestseller, Buy This, Not That , the Financial Samurai takes the guesswork out of financial planning and shows you exactly what to buy, how much to spend, and how to optimize every dollar you earn so you can maximize wealth building and live life on your terms. The good news? You don’t need to be a millionaire or a genius to achieve financial freedom. It’s about making the most of your money, now and forever—and it’s never too late to get started. You’ll
 
— The Financial Samurai’s 70/30 framework for optimal financial decision-making
— What is “good debt” and “bad debt,” and the right way to pay down debt or invest
— Strategies and tips for building passive income streams that work for your goals and risk tolerance
— How to invest in real estate, even if you can't afford to buy property
— Rules for spending—from coffee and cars to mortgages and marriage
— And so much more!

Genres: Finance, Personal Finance, Nonfiction, Money, Audiobook, Self Help, Business

336 pages, Hardcover

Published July 19, 2022

Reviews

[Sam Dogen · Rating 5 out of 5]

I'm going to give myself 5 stars for BTNT! It took me two years to write and I went through about 15 edits with five editors from Portfolio Penguin Random House.

I wrote this book because I didn’t see any personal finance books written by people with finance backgrounds who are also living what they recommend. For 30 years, I have worked in and written about finance. I still do by publishing 3X a week on FinancialSamurai.com.

Money is too important to be left up to pontification. Everything I've written is based off firsthand experience. Further, I've had the luxury of having the perspectives of 90+ million visitors who've come to Financial Samurai since 2009. I've incorporate their viewpoints in my book.

Buy This, Not That is not just a book about helping you achieve financial freedom sooner, it's also a book about helping you make more suboptimal decisions. I go through some big dilemmas, such as:

Pay for private school or public school
Join a startup or work for an established company
Job hop or stay a loyal soldier
Live in an expensive coastal city or move to a low-cost area
Invest in real estate or stocks
When to rent or buy
When to invest in tax-advantaged versus taxable accounts
Angel invest or don’t
Dividend stocks or growth stocks
Buy a fixer or a fully remodeled home
Marry or cohabitate
Marry for love or marry for money
Have children early or late
Return to work or be a stay-at-home-parent
Combine your finances or keep separate accounts
Get a divorce or stay married
Seek fame or stay low key
Buy or lease a car
Keep The Bank Of Mom And Dad open or closed

For more information about my book you can go to my landing page. https://www.financialsamurai.com/btnt/

Thanks for your support! BTNT became an instant WSJ bestseller.

Sam

[Daniel Hardy · Rating 2 out of 5]

This book would likely be significantly more effective for someone who is working at a moderately-high paying job in an area like the finance sector rather than for "the rest of us." a lot of the advice stems from the author's experience negotiating a generous severance package for himself and his wife, so that they could have plenty of extra money, paid health insurance (at least for a while), and free time to begin building their passive income plans. I'm sure that, given these circumstances, the rest of the advice applies. But advice like "instead of quitting or getting fired, get yourself laid off so you'll be able to collect unemployment and negotiate a generous severance package" just doesn't work for most of us.
I'm guessing, however, that the folks who have the financial freedom to apply the skills listed in the book are likely the folks who need advice the least. There's very little about "spending" your way to wealth/freedom rather than "become a landlord and make good investments."
two stars only because I'm sure the advice is accurate, just not very applicable to most of America.

[Khushboo · Rating 2 out of 5]

Key Takeaways: To become financially independent, start by identifying your why – this will help you focus your efforts. Second, pay down your debts, beginning with your credit cards. Third, remember the rules for buying a car (spend no more than 10 percent of your annual income on it), and the 30/30/3 rule for purchasing a house (mortgage payments should be no greater than 30 percent of your monthly income; save 30 percent of the purchase price for the down payment and buffer; and don’t spend more than 3 times your gross annual income on it). And fourth, make room for love – after all, what is wealth without someone to share it with?

[Jennifer Ballard · Rating 2 out of 5]

Great book if you're in your 20s and have plenty of time to save...but I'm in my mid-forties so I didn't find it that helpful.

[Brian Elwood · Rating 5 out of 5]

Very informative. Gives options and not commands when it comes to financial advice.

[Sydney · Rating 5 out of 5]

Phenomenal resource that covers so many important real-life decisions. I'm a big fan of Financial Samurai and got an early copy to review and wish I had this book when I was back in college so I could have used it in my 20s and 30s. I’m in my 40s now and there’s still so much I learned from the book that I can use today and over several more decades. It’s really like getting 10-15 books in one.

I really like Sam’s writing style and his expertise that uses strategies and advice that you can actually put to use. There’s a lot of personal finance books out there that only talk about one subject and just drag on and on and only offer vague tips without any clear action items. This book isn’t like that. I felt it really delivers action points and simple, yet applicable calculations and keeps you eager to keep reading throughout. It’s also easy to understand even if some of the topics are brand new to you.

I also really like his advice on overcoming decision paralysis because I’ve struggled with indecision a lot in my life. The suggestions are really helpful with making big choices that involve money, work, housing, investing, kids, and lots more. And not only does it help with making decisions, but it also helps you avoiding costly mistakes.

Highly recommended for anyone who wants to grow their wealth, learn more about personal finance, and learn new ways to improve their life in many different ways. You can read more of my thoughts in a longer review I posted on my blog.

[Catherine Tabor · Rating 3 out of 5]

Some good advice. Some not so good advice. Some outdated advice. Some condescending advice.

[Kristin Skaggs]

Not a lot of new info here, and definitely aimed more toward very high earners. Also very obsessed with partnership and kids to the point that large swaths of the book were irrelevant to me.

[January · Rating 4 out of 5]

Buy This, Not That: How to Spend Your Way to Wealth and Freedom by Sam Dogen
3h 24m narrated by Angel Pean and Teddy Hamilton, 336 pages

Genre: Economics > Finance; Finance > Personal Finance; Nonfiction, Currency > Money; Business, Self-Help

Featuring: Tons of Math, FIRE, Investing, Titled Chapters, Debt, Real Estate, Retirement, Passive Income

Rating as a movie: G

My rating: ⭐️⭐️⭐️⭐️💲

My thoughts:📱15% 1:5144 Ch. 3 - I had a goal of listening to 90 minutes a day, not going to happen. This is practically a math class. My brain won't make it that long. I just going to do 1 or 2 chapters and the 8 people waiting can just continue wait. 😔 I want to quit but it's like exercise for my psyche.
📱26% 3:16:01 Part Two - I was tempted to quit as all of that that employee investing just doesn't apply to me, but I decided to stick it out because knowledge is knowledge. It got much better on the debt chapter but he still uses math as his primary language.
📱54% 6:51:58 Ch. 9 - I wanted to quit so badly as I didn't agree with some of the choices he suggested and most of it doesn't apply to me anyway, but I stuck it out for the real estate and I'm so glad I did. This part has a lot of good information, although most people won't do it, and there's still more, but I think my brain has had its fill for the morning.
📱62% 7:50:07 Part 3 - This was very good. I was sad to leave my book but excited to get in the car and hear this chapter. I always wonder if vacation rentals were a decent investment and now my thoughts have been confirmed.
📱84% 10:38:05 Ch. 14 - I honestly never heard of this guy or website before seeing this book but I'm glad I got this book. There are so many valid points when it comes to business, education, and investments.

Finally! I was not happy with this book in the beginning, but it got better as it went along. I don't agree with everything in this book but it was very insightful and pretty much a series of suggestions. I think overall there is a lot of valuable information in this book. I will be checking out his website.
Financial Samurai
https://www.financialsamurai.com


Table of Contents:
Dedication
Introduction: Financial Freedom, Sooner Than Later
Part One: Adopt the Right Money Mindset to Get Rich
Chapter 1: Find Your Happiness Equation
Chapter 2: Do the Math and the Plan Will Come
Chapter 3: Get the Cash, Put It to Work
Chapter 4: Master Your Debt
Part Two: Put Your Money to Work
Chapter 5: Follow a Proper Allocation Model
Chapter 6: Optimize Your Investments
Chapter 7: Understand Real Estate Fundamentals
Chapter 8: Choose Where to Live for Maximum Wealth Potential
Chapter 9: Go Long on Real Estate
Part Three: Work While Maximizing Your Wealth
Chapter 10: Think Strategically About Your Career
Chapter 11: Make Your Money and Then Make Your Exit
Chapter 12: Get Your Side Hustle On
Part Four: Focus on the Most Important Things in Life
Chapter 13: Invest in Education
Chapter 14: Nurture Your Love
Chapter 15: Live Like a Financial Samurai
Take Your Shot
Acknowledgments

Recommend to others?: Maybe. This book isn't for the lighthearted. There are a lot of wealth-making opportunities mentioned but none are easy. I think many with drop it based on the suggested guidelines for car buying and homes alone.

[Jung]

Buy This, Not That (2022) is your ultimate guide to achieving financial independence and freedom. It tells you what to buy, how much to spend, and how to make the most of your money.

Sam Dogen founded Financial Samurai in 2009. One of the pioneers of the modern-day FIRE movement, he was previously at Goldman Sachs and Credit Suisse, from which he retired at age 34. Dogen is a graduate of The College of William & Mary and received an MBA from University of California Berkeley. His passive investment income exceeds $300,000 annually. Dogen lives in San Francisco with his wife and two children. This is his first book.

FULL SCRIBE https://shrib.com/#Theo3pyDwW1

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Making the right decisions will help you achieve financial independence.

If you’re reading this book, you’re probably into the idea of financial independence. Who isn’t, right? But before you start working toward this goal, you should first understand why you want it. What exactly do you want to achieve? What does financial freedom actually mean to you?

Perhaps you’re seeking it for health or well-being. Financial independence can mean freedom from job-related stress and financial worries. Or maybe you want to feel secure about your ability to afford a hospital bill if you or a loved one falls ill.

Maybe you, like many others, are concerned about job security. Are you worried your boss doesn’t like you? Are you in a cut-throat industry and afraid a colleague might (figuratively) stab you in the back? Does your position mean a company merger could result in you being made redundant? Perhaps, generally speaking, job security just doesn’t seem as easy to come by as it used to. Financial independence would give you the freedom to work not because you need to but because you want to.

Or maybe you’re looking at the state of the world and the economy right now, and are worrying about a possible recession. Well, financial independence would give you the means to ride out that storm.

Of course, there are many other reasons you may be seeking financial independence. You might want to make your parents proud, for example. Or maybe you’d like to spend more time with your children or not work for a company that stands against your principles.

This book Buy This, Not That, by Sam Dogen, explores some of the considerations you should be making in your quest to achieve financial freedom. It answers questions like, How should I allocate my savings between financial assets? How much should I invest in real estate? What about my car? And, perhaps surprisingly, Where does love fit into the equation? Let’s get started!

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Tackle your debts, and avoid the temptations of buy-now-pay-later offers.

Take a moment to think about your monthly income and how you use it. How much are you able to save each month? What are you doing to leverage your income toward achieving financial independence? What is financial independence?

First things first. Sam Dogen defines financial independence as being one of two things: either you have a net worth that’s 20 times greater than your average gross income, or you have sufficient investments to generate enough passive income to cover your expenses. Ideally, you have both.

How soon you become financially independent depends on the work you’re willing to put in, how much you save and invest, and how much risk you’re prepared to take. Again, think about your savings: if you can save 50 percent of your after-tax dollars, that’s the equivalent of one year’s living expenses. Seventy percent gets you two years’ living expenses. And if that’s simply not an option right now? At an absolute minimum, save 20 percent, and you’ll have one year’s living expenses within four years. The wise choice is to save and live frugally in your early years to reap the rewards later.

You need to earn, save, invest, and plan if you’re going to achieve financial freedom. But before we get into how to invest, we first need to tackle a thorny subject: debt.

Many of us get into debt because we try to live a life we simply can’t afford. Buy-now-pay-later offers are around every corner, tempting us to skip the hard work and go straight for the rewards. But giving in to them is a surefire way not to achieve financial independence.

Of course, debt is sometimes unavoidable – there’s a catastrophe, unexpected medical costs, or, as a single parent, your finances are just stretched too thinly. But if you’re serious about your quest for financial freedom, paying down debt must be your top priority.

Where do you start? Credit cards. Average APRs are around 15 percent, but some are as high as 29.99 percent. So pay off your cards immediately, and only use them for rewards and insurance. Never ever carry a balance forward – you’ll just find yourself being ripped off by the credit card companies.

Next, you should tackle your car debt. Your car depreciates in value every month – even if your car loan interest rate is low. Follow “the one-tenth rule for car buying.” That is, don’t spend more than one-tenth of your gross annual income on purchasing a car. After all, driving around in your five-year-old, more-milage-on-the-clock-than-I-care-to-mention hatchback won’t kill you until you can afford to buy your spiffy, new car outright!

Third, get your student loans cleared. If you haven’t yet been to college and would like to pursue a degree, choose a school that’s affordable. That way, you can pay off your loan within four years of graduating.

Finally, think about your mortgage. This is a complex area, which we’ll delve into in the next chapter.

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Design an investment strategy that will maximize your wealth potential.

Like with most things in life, you need a plan if you want to achieve financial independence. It’s important to consider where and when to invest your savings to maximize your wealth. The more you save, the sooner you’ll achieve financial independence. You should also contribute the maximum to your country’s tax-advantaged retirement accounts and, at the same time, build up your taxable accounts as much as you can.

Where to put your money depends on your life stage and circumstances – but aim to own stocks, bonds, and real estate. Put a small amount of your savings into risk-free assets as an “emergency fund” too. Later, if you want to diversify, consider alternative investments such as art, wine, farmland, cryptocurrencies, and collectibles.

Dogen offers three allocation models for consideration, depending on your personality and age.

The first model, Conventional, is a low-risk option. Invest in stocks, bonds, real estate, and risk-free assets. This is great for those who are fine with working until their state retirement age.

The second, New Life, is more aggressive in its risk-taking. This is for people who want to start life anew when they reach the age of around 40. Consider some alternative investments – perhaps venture capital, private equity, and cryptocurrencies.

The third model, the Financial Samurai, is the most aggressive. Here, you invest in yourself, build your own business, and, as a consequence, find financial freedom at an earlier age. Start creating some passive income streams while you’re in your twenties. And get a side hustle going that’ll generate enough money to pay for your basic living expenses.

Whichever model you choose, you’ll most likely have built more wealth than the average person by the age of 60. Remember, though, your financial returns are not guaranteed. The trick is to diversify in order to cope with economic downturns and recessions. Here are some general rules: Don’t have more than 50 percent of your net worth in any single asset class after the age of 40. And after you’ve built your wealth, switch to capital preservation.

Now let’s return to real estate and take a closer look at your options.

First and foremost, it’s important to remember that you’re pursuing financial freedom here, so your optimal choice may not be the prettiest – the cheaper town apartment might be the choice for now, as opposed to the country cottage.

Consider renting only as a short-term solution to your housing needs. It allows you to keep your options open while you’re establishing your career and deciding where to live. But once you’ve identified that you’re going to be in one place for five years or longer, you should buy.

And how much can you spend on your principal home when you’re ready?

Dogen has developed the 30/30/3 home-buying rule to ensure you don’t overspend. First, you should spend a maximum of 30 percent of your gross income on your monthly mortgage payment. The smaller your income, the more important this is – if you spend more, your available funds for other things will be severely squeezed.

Second, make sure you have 30 percent of the value of the home saved in cash or semiliquid assets. Two-thirds of that is for a down payment. The other third is your cash buffer in case of unexpected difficulties. Avoid any temptation to make a down payment of less than 20 percent. Homeowners who do this and don’t have a buffer suffer most in a recession.

And third, don’t spend more than three times your annual gross income on your house. So if your income is $100,000, don’t exceed a purchase price of $300,000. This will keep your monthly payment within your means.

Owning real estate beyond your primary residence is also a great way to build wealth – but apply the 30/30/3 rule to this purchase too. Real estate usually outperforms stocks and bonds during a downturn, and when there’s a robust economy it benefits from rising rents and property prices. Consider the effect of the COVID-19 pandemic, for instance: stocks collapsed in March 2020, but real estate values were steady. Then, as the outlook improved, there was a boom in real-estate demand.

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Achieve financial independence earlier by optimizing your career and getting a side hustle.

When you’re young, your career fuels your ability to invest – which in turn generates more cash and eventually leads to your financial freedom. Ideally, you want a well-paid job that you love. But if you can’t find a job you love, make sure that you’re at least well-paid for what you do. You can always do the things you love in your own time.

Use the first 21 years of your career to build the best foundation possible. This will then give you more options when you’re in your forties.

If you’re just starting out in your career, look for a job in a lucrative industry and work hard to get good at something. If you’re still in college, find a course that will give you a qualification to work in a high-paying industry – optimally, one that pays six figures straight out of school or will do so within five years of joining. Industries that do this include venture capital, investment banking, strategic consulting, IT, engineering, real estate, and oil. Also, don’t forget to look at the future pension arrangements that jobs offer – especially in the public sector.

But high-paying jobs are highly competitive. You probably only have a 1 percent chance of getting an interview. And after the interview, you might have a 25 percent chance of getting the job. So apply, apply, and apply again until you get the job you want.

If you find yourself in a low-paying job or in a situation where you can’t leave or switch jobs, it’s time to get your side hustle on.

Dogen has a mantra he’d like all financial freedom seekers to embrace: “Work while others are sleeping so you can eventually play while others are working.” Your job is likely to be your main source of income, so you should maximize that through promotions and raises. But you also need a side hustle to speed up the journey toward financial independence.

Your side hustle can be big or small. If you’re a morning person, get up a couple of hours earlier to work on it before you go to work. If not, work on it in the evening. Two hours per day gives you over 700 extra productive hours each year. Although it’s never too late to start, ideally you want to start your side hustle when you’re young; your energy may wane as you get older. But what can you actually do?

Well, you can join the “gig economy” by getting a second job – whether it’s a freelance or contract gig – that you can do outside your normal working hours. It can be physical, such as a night-shift at McDonald’s, driving for Uber or Lyft, or delivering packages for Amazon. Or maybe it’s online, like designing logos for startups, freelance writing, or doing voice-over work.

With all of those examples, though, you’re still working for someone else. Better yet, find a long-term side hustle building something of your own – your own brand. For example, instead of teaching piano one-on-one or giving group lessons online, you can create a set of piano lessons under your own brand name. You can then sell your course to others without having to do extra work.

Eventually, your side hustle might even become your main hustle. The right time for that is when you are sure of two things: you truly enjoy doing it, and you make enough money to cover your basic needs.

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Get yourself an education, and don’t forget about love!

In the final chapter of this book, we’ll turn our attention to education and love.

Let’s look at education first. More than anything else, education sets you free. It helps you make choices in terms of your career path, investments, and life partner. It also helps you build your business and feel more confident. Ultimately, it helps you be happy.

It doesn’t have to be formal education – you can find a lot of free courses online. You can even learn from people who disagree with you. What’s key is to be open and in a continuous learning mode. There’s always something new to learn!

If you’re considering getting a degree, remember that it’s not so important to go to a prestigious school. Yes, it may give your parents something to brag about – and when you’re fresh out of school, hiring managers may be more impressed. But, after a few years of experience at work, nobody cares anymore; they have your track record to go on. The bottom line is that you should go for the best school you can afford – but don’t get yourself into six figures worth of student debt just to improve your chances of getting a job out of school.

Let’s turn to love now. Here’s the all-important question: Would you rather be rich and alone or poor and in love? You don’t actually have to answer that! Neither situation is optimal. It’s much better to have money and spend it with your partner – and eventually maybe your kids.

The truth is, we need money just as much as we need love. Without it, we might find ourselves financially strained. And when it comes to having kids, we’d stress over whether we could give them the opportunities we want for them. Sadly, it’s also a fact that 36 percent of all divorces result from financial woes.

But there is good news: you can have both love and money. If you’re single, make finding a life partner your priority. If you already have one, nurture your relationship – every day! And remember that if you truly love someone, you’ll want to help them become financially independent too.

Having found love, your next question might be: Should we get married? If you look at it from a purely financial viewpoint, there are two things to consider: tax and social security. High earners – those with $500,000 combined income – could have an income-tax penalty, so it may be better to cohabitate. But rules change from time to time, so check in with your tax advisor. And don’t forget that being married may offer more financial benefits when it comes to collecting social security – especially if one partner dies. In that case, the surviving spouse continues to receive the deceased spouse’s social security benefits.

If you do decide to get married, keep the wedding costs down! Dogan suggests spending no more than either 10 percent of your combined income, 3 percent of your combined pretax retirement plans, 50 percent of your combined side-hustle gross income, or 10 percent of your annual passive investment income. A final alternative is to spend as much as your parents want to spend. After all, why would you turn down their generosity?

When it comes to bank accounts, the optimal setup is to have both joint and separate accounts. Having your own separate account gives you some independence to spend what you want; it also acts as an insurance policy in case of an event that ties up your spouse’s and joint assets in probate.

And, finally, what about kids? Dogan says that if you want kids, the optimal time to have them is when you’re both financially and emotionally stable. Taking into account both biology and economics, he believes that’s around the age of 32. But, in any case, you must have your finances in order – otherwise, you’ll be constantly worried and exhausted (not to mention stressed)!

When your kids grow up, by all means help them financially. But charge interest, and set a target for when they should pay you back. When they’re ready to return the money, that’s when you can decide to forgive the loan – not before. Let them be proud that they too were able to make it on their own.

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To become financially independent, start by identifying your why – this will help you focus your efforts. Second, pay down your debts, beginning with your credit cards. Third, remember the rules for buying a car (spend no more than 10 percent of your annual income on it), and the 30/30/3 rule for purchasing a house (mortgage payments should be no greater than 30 percent of your monthly income; save 30 percent of the purchase price for the down payment and buffer; and don’t spend more than 3 times your gross annual income on it). And fourth, make room for love – after all, what is wealth without someone to share it with?

Here’s an extra bit of actionable advice: Follow the 70/30 philosophy of decision-making.

We often don’t have enough information to make confident decisions. But if we think in terms of probability rather than binary absolutes, we not only develop a stronger decision-making mindset but also become more likely to make winning decisions.

So what is the 70/30 philosophy? It means that if you can predict that a decision has at least a 70 percent chance at success, you should go for it. At the same time, it’s realizing that 30 percent of the time, your decision will be suboptimal – and you’ll have to live with the consequences of that decision.

If you adopt this philosophy, you’ll still undoubtedly have some regrets along the way – but you’ll learn from them. And, in the long run, your decision-making will almost certainly be more profitable.

Thanks for reading – and good luck on your path to financial independence!

[Chris · Rating 5 out of 5]

Beautifully Simplistic Approach To Wealth

I’ve been reading Financial Samurai on and off for several years and this was a great expanded version of some of the best articles written. Whether understanding how to approach savings or tackling debt, it’s covered with logic and storytelling that just makes sense.
Personal beliefs are limited and overall, this just hits home as we all aim to evolve our financial wellness toward the most optimized system.

[April · Rating 4 out of 5]

Sort of on the Rich Dad, Poor Dad tip but with some different info and perspective, for sure. I appreciate a lot of what is shared in this book, especially about side hustles and how much that can contribute to financial independence. I never even considered a side hustle while I was working a corporate job because all my time was spent thinking about my corporate job. I also had poor boundaries and beliefs around my role and responsibilities at work, so that didn't help me out much.

And I never thought to ask for an agreed upon layoff for a severance. Thinking back on that, I wonder how it would've gone down if I'd known that was an option? It could've been good to help plan for my successor. I gave my company a month's notice to be nicer about it, but nothing happened within that time where I could have helped replace myself. I think my colleagues were reeling about my decision to leave, which was for my own health reasons--I literally had to have emergency open-heart surgery just a few months after quitting--I didn't know my health had been affected so much by the stress from work! That was all before I learned about true self-care and listening to and honoring my body. All the things I coach on now as a Holistic Life Coach.

He also includes some interesting scenarios to consider: "Choose this or choose that" type of thing. Very revealing.

“The best way to improve your forecasting abilities is to constantly make predictions about uncertain outcomes. For example, if you watch any type of sporting event, before the game starts, make a forecast of who will win, by how much, and why. Jot your forecasts down to keep yourself honest. Then compare the outcome with your expectations and see what you got wrong and why.
You can practice improving your predictions on practically any type of activity that has an uncertain result. You can make forecasts on:

- which dog will win the dog show
- how long a friend’s relationship will last
- how much a house will ultimately sell for and by when
- how long your injury will take to heal
- whether your leaky roof will still leak if there’s no wind during the next rainstorm
- how many whales you’ll end up spotting off Makapu’u Point in January
- whether your son will stay in his bed and not bother you in the middle of the night if you bribe him with blueberry cheesecake

Soon you will start to naturally see everything as a probability matrix. Where others make decisions based solely on gut instinct, you go into every decision-making process based on extensive practice, logic, and self-awareness. This is your competitive advantage.
When you are dead wrong, you just review the reasons why and learn from them. Eventually you will narrow the gap between various outcomes and your expectations to the point where you can confidently say something has at least a 70% probability of succeeding. If you feel your desired outcome has more than double the chance of coming true over the undesired outcome, you are on the right track.” pg. xviii

“. . . link an investment you already have, or that you plan to make, to a life goal. When it comes to money, finish your sentences. For example, if you say, ‘I bought twenty shares of Tesla,’ it is crucial to keep going with the second part of the sentence, ‘ . . . so that I can ______.’ Or ‘I will max out my 401(k) for fifteen years so that I can ______.’ Or ‘I will take this extra freelance job so that I can ______.’
This helps you remember that money alone is never your primary motivation. Money is only a means to an end. We need to connect our financial choices to our goals, and we need those goals to be tangible.
It’s not enough for your sentences to end with ’so that I can have $100K in the bank’ or ‘so that I can be a millionaire.’ You have to keep going. Why do you want that money in the bank? Why do you want to be a millionaire? What are you going to do with the money once you have amassed it? Money is simply a tool, and a tool, by definition, needs to be used.” pg. 30-31

“Go through an exercise of saying, ‘My investment in X paid for Y.’ Here are some examples:
- My investment in Google paid for my daughter’s education.
- My investment in the S&P 500 index paid for my kitchen remodel.
- My investment in Apple paid for the down payment on my house.
- My investment in a private Fundrise fund paid for my parents’ two-week cruise.
- My investment in VYM, a Vanguard High Dividend Yield ETF, is paying monthly dividends, which pay for my gym membership.
I call this income tethering. You can also connect your personal time and effort investments to real outcomes.
- My investment in blogging for ten years paid for my ability to stay home with my kids.
- My investment in driving for Uber a few days a week paid for my new MacBook Pro.
- My investment in taking that freelance gig paid off my property taxes for a year.
- My investment in teaching tennis pays for family entertainment like movies and shows.
If you find yourself going through the exercise and realizing you time and investments have’t paid for anything you’ve got some work to do. You’ve forgotten your purpose. The goal is to always tether your investments and efforts to real things. As soon as you identify what your hard work has bought, or will buy, you’ll be much happier and significant’y more motivated.” pg. 31

“If you’re not constantly failing, you’re not constantly trying.” pg. 157

“Compare your gross rental yield with the risk-free rate. The risk-free rate is the ten-year bond yield, which has largely declined over the past forty years. All investments need a risk premium over the risk-free rate; otherwise, there is no point in risking your money investing. If the annual gross rental yield of the property is less than the risk-free rate, either bargain harder or move on.” pg. 169

“If you so happen to join the wrong start-up, then make sure you learn as much as possible to prepare yourself for the next opportunity. Remember: if you’re not earning, you had better be learning.” pg. 184

“Some of the angriest people I encounter are the least educated—and again, I am not talking about prestigious degrees. I am talking about any kind of education that allows you to see and understand different perspectives or gives you the confidence and self-esteem to feel good about your life choices. That education can be exposure to different cultures through reading or traveling, or even just pausing long enough to listen to others’ opinions that are different from your own.
A strong mind is an open mind. Learn from those who disagree with you so you can continually improve.” pg. 226

“When it comes to your kids, you don’t want to suffer from the Dunning-Kruger effect—that is, be delusional and overestimate their competence. If you do, you will give your kids a false sense of security that will be smashed to smithereens in the real world. Praise effort, not results.” pg. 237

“If you save too much in your 529 plan, you can always change its beneficiary. Surely there is a relative with a child who could use some help. Worst case, if you remove funds for nonqualified expenses, you’ll pay a 10% penalty on your gains. You’ll also be subject to income taxes on the gains and may have to pay back any state income tax deductions you previously claimed.
However, for those of you who have estate values that may surpass the estate tax threshold, I strongly consider viewing a 529 plan as a generational wealth transfer vehicle. In other words, not only should you change beneficiaries for any money left over, you should also consider funding multiple 529 plans for as many loved ones and relatives as possible.
It’s a more tax-efficient move to contribute $16,000 a year for five years to a grandchild’s 529 plan than to have your estate pay a 40% death tax on the $80,000. Creating a family education endowment in a tax-efficient manner is a great way to ensure the survival of your lineage.” pg. 238

“My core belief around love and money is this: if we love someone, we should help them become financially independent. This is true for our spouse and for our kids. Being financially dependent is limiting at best—and debilitating at worst.” pg. 244

“Our why can get buried in the noise.
And too often we confuse our why with the allure of prestige and social status. We spend money on things we don’t care about the get validation from people who don’t matter.
As you pursue your goal of achieving financial independence, remember your core values. Do a gut check to make sure you’re focusing on the things that really matter to you, at whatever life stage you’re in. Don’t get fooled into playing the status game.” pg. 269-270

Book: borrowed from SSF Main Library.

[Joelle · Rating 1 out of 5]

Dnf. You lost me at "severence package".

[Jennifer · Rating 3 out of 5]

I was wondering if the title of this book came from the highly popular Eat This, Not That series... maybe he is affiliated with that group somehow. Unfortunately, there really wasn't a whole lot of useful info on what to buy and what not to buy IMO.

This book is definitely written for people that have a more advanced knowledge of personal finance AND have high paying jobs. There are a lot of math calculations and a lot of charts.

I felt like there was a lot of time spent on the real estate side of buying, which the author makes a point to mention several times that "interest rates will stay low for the rest of our working life".... therefore, buying real estate is definitely a good decision no matter what. Oops! Maybe the author didn't expect interest rates to rise so much or the real estate market to start cooling off and prices dropping. People with ARMs set to adjust this year or next are now seeing what a bad decision that was.

There is some useful information, but since this is a book written at a point in time, it felt like it will be outdated very quickly (or already is).

[Renée · Rating 1 out of 5]

Seriously this was really not my cup of tea.

[Gabe · Rating 3 out of 5]

Decent financial advice. A little too... "pop finance" for me. Entirely too much advice that was just Sam Dogen's personal philosophies that he was stating as financial laws to follow.

[Value Investor · Rating 4 out of 5]

Generally good financial self help advice, with emphasis on real estate and financial independence considerations.


70/30, shoot for positive expected value based on probability of 70% and 2-1 return.

FI number is 20x income and between 25x annual expenses.

FI is worth shooting for variety of reasons such as health, interesting work, better people to hang out with

Early retirement is overrated, shoot for for FI.

Focus on 70% passive income and 30% active

Please save for 25% of income. Multiple of income of net worth, because expenses are too flexible to cheat.

If passive income is greater than expenses, you don’t need to accumulate that much more capital.

If have passive income, divisor of 2-4%. So 80K passive income would require at least 4 million.

If portfolio drops, have to go back to work.

Risk tolerance multiple, and maximum equity exposure.
Number of additional months to work to make up for losses in bear market of 35% loss. Sam’s risk tolerance is 12 months, those with high is 2 years.

Taxable passive income and investments will be important for FI before age of 59

Creator economy is now and creating products and side hustle is a great way for passive income.

Compare mortgage to margin stocks.

High risk portfolio can stress you out, stocks should be part of investment portfolio.

Work on side business and passive income streams and leave at age 40 for something new.

Investments allow you to take more risks with your career.

Real estate is better than bonds because of inflation protection and dampen volatility during stock sell offs and low bond yields.

Shoot for 3 to 1 taxable account to nontaxable. Trade more actively in nontaxable account. Don’t spend time day trading and it can hurt your career. Most growth stocks without dividends in taxable account. Have more risky private and public equities in IRA because can’t touch for 20 years.

Spend more capex and reduce active income if you know you have huge bonus or invoicing coming, try deferring.

Index plus strategy - devote 10% of portfolio to active investing if you are good. The rest in index funds

Don’t be Angel investor because need 1 to 7 loser hit run. VC funds get first look and have data. Stake will get diluted for future investors, liquidation preference. Zero liquidity.

Alternatives should be 0-20% but you should invest with those who are connected. Allocate 5% to moonshots so you minimize regret.

If you are young and less than forty, invest in growth stocks and then shift to dividend stocks.

30/30/3 rule for real estate
Don’t spend more than 30% of gross income on monthly mortgage payment. Have 30% of home value in cash or liquid securities. Home-Buying Rule #3: Limit the value of your target home to no more than 3X your annual household gross income.

Go long on real estate. Better than stocks and bonds because of stability and confidence. Compare cap rates and comparable sales and p/e. Emotional security and control for family

Aim for high income fields and underlooked professions. Numbers game when applying and beware of working at startups. Ask for percentage of shares. Work at startup after age 30.

Earning and learning at same time is ideal.

Get into front office. Internal salesmanship, treat colleagues as clients and not competitors. Be likable. Promote boss first. Cut costs by working long. Buy lunch and coffee for all seniors. Brownose subtly.

Participate in new permissionless society for side hustle. Don’t need degrees or formal experience in internet. Start publishing what you know.
Show up and stick with it in consistently good work.
Work on it while others sleep and play, wake at 5AM.
Producer instead of consumer.
Fake it till you make. Build up expertise and then charge for products.
Side hustle is something you’d enjoy anyway without pay.
Taking weekends work and mornings.
Offline gig vs online side hustle. Creating brands, content, unique product is the most important. Scalable.

Don’t quit in first year. Financial samurai. Ads for $1000.

Anyone in the world can visit your website. Dynamic resume. Unshutdownable.

Negotiate succession plan and severance.

Are you having fun and doing something you would do for free?

Lifestyle business is 70:30 better than glorious moonshot.

Invest in education. 529s can be useful.

Stealth wealth.

[Mike Cheng · Rating 3 out of 5]

Basic financial advices, with an emphasis on generating passive income primarily through real estate and the stock market primarily via index funds and ETFs. The overarching idea is that money is a means to an end, that end being freedom to do what you love with your time - hopefully well before the average retirement age. While author / blogger Sam Dogen discourages having a scarcity mindset (i.e., being too careful in decision making), his approach is somewhat conservative with respect to living within one’s means. For example, a vehicle purchase should not cost more than 10% of your gross annual income nor purchased on credit. When buying real estate (whether as a primary residence or investment property): your monthly mortgage payment should not exceed 30% of your gross annual income; have at least 30% of the purchase price in cash (20% for the down and 10% for related emergencies); and the purchase price should be more than 3x your gross annual income. This is what Mr. Dogen has dubbed his 30/30/3 Rule. Worth noting is that Mr. Dogen is aggressive when it comes to debt, as he believes that in an inflationary environment debt can be used to purchase hard assets (especially real estate) because inflation whittles down the real cost of said debt while simultaneously acting as a tailwind for asset price appreciation. Caveat: Taking on debt to buy risk assets makes sense if the interest rate is low enough and your asset-to-liability ratio is manageable. Debt, however, should certainly not be used to finance an opulent or profligate lifestyle. Though very bullish on real estate, Mr. Dogen is not against renting, especially if the purchase price is a ludicrous multiplier of what it would cost to rent (in hot markets this can be over 200x). The following example may be illustrative:
Consider a $2.5M house, with a 20% down and a 5% fixed interest rate. The annual cost is approximately $90,000 in mortgage interest, $30,000 property tax, $2,000 insurance, and $5,000 in maintenance, totaling $127,000 (which does not include the cost of paying down the principal). Compare this to renting the same house for around $72,000 a year, and what the $55,000 delta as well as the $500,000 down payment would earn on a bond, high-dividend ETF, or an index fund. Of course the longer you plan on living in the house (i.e., 5+ years) the more you might consider owning over renting.
Mr. Dogen also shares some general wisdom in other aspects of life, a couple of which resonated with me. See the world as a probability matrix rather than in absolute terms, and make decisions accordingly. Where others make decisions on their gut, you should go into the process in a calculated manner. Improve your forecasting abilities by constantly making predictions about uncertain outcomes, and thereafter review how you were right and more importantly how and why you were wrong. If you decide to have children, bear in mind that the longer you wait to have them the less time (and energy) you’ll have with them and grandchildren. The average college graduate spends around 80 minutes a day with their kids - always keep that number in mind and know that the time is gone once it’s gone.

[Chris · Rating 5 out of 5]

The Skinny: An elite personal finance book with excellent wisdom and advice despite occasional structure flaws.

The Good: I am a longtime Financial Samurai reader so I knew this was going to be an awesome book before I even opened it. It is an encyclopedic guide for personal finance and chock full of great advice. It is equal parts math and mindset with a lot of specific "rules" to follow to ensure you maximize your finances and achieve financial freedom sooner. Sam is a gifted thinker and writer and this book is so much more original than all of the hackneyed personal finance pontificators put there (*cough* Napoleon Hill *cough*). Rich Dad Poor Dad has its place on your bookshelf, but if that was the elementary school, this book is the university. A must read for anyone who wants to break free from the shackles of the traditional work life and go and do what they truly love with time that is truly theirs.

The Bad: Although I enjoyed it very much, the book has its flaws. I think the flow is pretty choppy and could've been better organized. My sense is that this is because the book is essentially an aggregation of the hundreds and hundreds of articles he has written on his site. It is constantly noting that things will be covered later in X, Y, and Z chapter which got confusing. It is also not clear who the audience is (often seems like he's speaking to people who are already making good money). I also felt there are contradictions at times, especially with regards to saving (e.g. lots of strict spending rules paired with a focus on an abundance mindset seems kind of funky). Finally, while I like it, sometimes the "rules" and all the recommended formulas for various decisions might be a little much for some people. Overall, an awesome book but if there was a chance to reorganize it I think it could be even better.

[TJ Grant · Rating 3 out of 5]

This is a well written, very accessible, survey of the kind of calculations one should make to optimize their finances. Sam Dogen has run the Financial Samurai blog for 10 or 15 years and has had countless conversations with people about every situation and option. I found his reasoned, and numbers-driven analysis on figuring out how much of your disposable income to allocate towards debt versus investing cleared up a foggy area for me. I also liked his tables of how much wealth you should have by different ages if you want to retire and maintain your standard of living. He laid out a fascinating plan for how to retire, completely financially independent, in your 30's, which I'd never considered.

His most common line of reasoning when faced with a complex financial choice, is to ask what the opportunity costs for different choices are. For example, he challenges the age-old assumption that cooking at home is always a more frugal choice than picking up prepared food. He says, if you've been working all day, now are going to spend an hour cooking, after spending money and time picking up groceries, it might easily be more expensive for you to cook than to save the time. Especially if you are time poor and trying to develop valuable side hustles in your free time. But if you're time rich, and don't have something more valuable that you're doing with your time shopping and cooking might be the best choice.

He analyzes how to choose houses to live in and rent out, how to pick schools for your kids, how to pay for expensive schooling, how to leave a job with a severance, when to look for a new job, how to start a side hustle, etc.

I learned a ton. It's all presented in very digestible doses. A great book if you want to be taken through more careful thinking about how to become financially independent.

[William Yip · Rating 4 out of 5]

The author had a habit of saying he's going to talk about a topic in another chapter. He repeated himself multiple times. He was wrong that interest rates would stay low. I disagreed with his statement that stocks provide zero utility since the stock market has always had positive returns given enough time and an ETF provides the results from the work of countless people across many companies. He contradicted himself stating that there's no joy in inheriting a dividend-paying portfolio but saying elsewhere that dividend stocks are a great form of passive income which can provide freedom. He came up with hypothetical scenarios that are unrealistic for the average person. He was wrong that people didn't go back to pre-pandemic life. He wrote several sentences that were confusing.

That said, the author was right that making progress in the areas we care about provides the most happiness and that the value of time is important especially as we get older. He told interesting stories from his life including being the only one to wake up early and get on a bus. I liked the idea of income tethering, calculating the required investment amount to pay for an expense based on the interest rate. His 70/30 framework is helpful in logically analzying financial decisions including marriage. I liked that he discussed the importance of physical and mental health. I appreciated the mindset and discipline the author wants to instill in readers; to calculate what is needed for one's definition of financial freedom and find the willpower to reach that amount.

[Lauren · Rating 4 out of 5]

Dogen, with his vast experience and wisdom, lays out a roadmap to financial freedom that is both practical and empowering. From investing wisely to navigating the complexities of debt, Dogen covers it all with clarity and insight.

What I appreciated most about this book is Dogen's 70/30 framework for optimal financial decision-making. It's a simple yet powerful concept that provides a clear roadmap for managing your finances effectively. Whether you're tackling debt, building passive income streams, or investing in real estate, Dogen's guidance is invaluable.

His approach is refreshingly practical and accessible, making it easy for readers to implement his advice into their own lives. From the smallest purchases to major life decisions like marriage and homeownership, Dogen offers practical rules and strategies for making the most of your money. His insights are grounded in real-world experience, making them all the more valuable to readers at any stage of their financial journey.

Overall, this book is a must-read for anyone looking to take control of their finances and build a secure future. With Dogen as your guide, you'll gain the knowledge and confidence to make informed financial decisions that will set you on the path to financial freedom. Trust me, you won't regret diving into this wealth of wisdom.

[Arkajit Dey · Rating 3 out of 5]

I'm a fan of the blog, so the content is very similar. But I didn't enjoy the book format as much, and it was underwhelming. Maybe because I'd already been exposed to the ideas before on the blog.

The tone is a bit hectoring, and the content is not novel. Work hard, climb the corporate ladder, save money, invest, have a side hustle, etc... It's kind of like having your immigrant Asian parent lecturing you. If you already have one at home, you may not need to read this.

The author is big on real estate for growing wealth, and he has some interesting chapters on that. But he also provides a lot of unfounded anecdotal advice like it's optimal to job hop every few years to get a raise. The anecdotes are personal and about a few highly paid NFL coaches. I don't think it'll be relevant for most people.

Still, there are some good nuggets in there about asset allocation and how to split up your net worth as you age. But you can probably just find them more easily on the blog.

Overall, three stars because I didn't get a lot of new value from it. But I've read a dozen personal finance books, and they all start to sound similar after a while. If you're just starting out, it could be a good first introduction to basic finance concepts.

[Angie Smith · Rating 3 out of 5]

I’ve heard the financial samurai interviewed on wonderful podcasts so needed to check out his book.

An excellent overview on overall financial health ideals. Much of this was not new to me but I do think it would make an excellent gift for a high school or
College graduate. My children should Certainly read this. Some basic advice includes:
Spend no more than 30% of your gross income on a monthly mortgage payment. Have at least 30% of home value saved up in cash or semiliquid assets. Limit the value of your home to no more than 3x your annual income. Pay off your mortgage before you retire.

I have always dreamed of owning real estate and renting it to people with disabilities. Affordable housing is a true crisis in the US and my work with people with disabilities gives me an first hand view of these challenges. I was thrilled when the author mentions these struggles and offers advice when renting to this population! Most authors look over people with disabilities.

[Coco · Rating 4 out of 5]

I like the beginning of this book where Sam gave a few calculations on how much you should save (not 25x expense but 20x average gross income) what should be the safe withdrawal rate (not 4% but 80% of 10 year yield). He is pretty conservative and I like that approach because based on my experience 25x expense is a nice milestone but not safe enough to retire forever from corporate.

The rest of the book continues to have good advice however I am past the stage of needing or wanting to change most things so they are probably more suitable for someone right out of school.

Recommended for those aiming for chubby fire.

[Ken The Librarian · Rating 5 out of 5]

Sam Dogen (aka The Financial Samurai) is one of the most influential bloggers in the personal finance / FIRE space, and his value to these two communities is sky-high. With "Buy This, Not That", Sam has distilled 1000s of blog posts into a book that I consider essential reading for anyone who wants to better understand the big picture between their work, their wealth and the rest of their life. Hats off to Sam for making this investment in his time. He provides guidance way above and beyond what anyone will get from their financial planner. This book belongs on the personal bookshelf of anyone wanting to get more out of their money and working careers.

[Sean · Rating 5 out of 5]

I would agree with some reviewers who mention that this book has a disproportionate impact for higher earning families. However, I think there’s a lot to learn regardless of your income levels. It provides both tangible actions to start having your money work for you and a general framework as your wealth grows. I especially enjoy the author’s use of thinking in bets with the 70/30 mindset; if the likelihood of improving your future is greater than 70%, do it!

I would rate this as one of the top ten non-fiction books I’ve ever read. Thanks, Sam!

[Y T · Rating 4 out of 5]

An easy read, the book has been written primarily for the US readers, covering taxes and IRA contributions.

I’ve enjoyed this book, learning about buying houses and cars. While the figures can’t be directly applied in other countries, the principles recommended would serve as a guide for anyone looking to manage their own money better. E.g. don’t spend more than 10% of your income on buying a vehicle.

What’s refreshing is that the author also covers family life choices, e.g. getting married, having kids, which isn’t often written about.

Overall an amazing read.

[Yifeng Yuan · Rating 4 out of 5]

I confess that I am not a "financial samurai", not by a long shot. However, Sam shows me area for improvement, and it always excites me to see the possibility of being a better version of myself. To be completely honest, Sam's standards are very high, relative to an average Joe such as myself. However, there are some very sobering advices in this book, that cannot be more timely at this point in history in America. I recommend it.

[Ed Morgan · Rating 4 out of 5]

Excellent, should be read by everyone. Only 4 stars for me as it’s very US centric but if you’re even vaguely aware of your nations financial institutions and mechanisms everything is simple enough to transpose to your relevant locale.

After two years of rinsing the majority of my wages on vintage guitars and gear I am suitably shamed and inspired to start putting money away more sensibly again 😂