Table of Contents

Straight Talk on Your Money


Introduction: Following the Crowd Causes Bad Decisions

Part 1: Conventional Wisdom’s Fatal Flaw

Myth #1: Humans are Rational

  • Humans Are Entirely Irrational
  • Rationalizing Is Not the Same as Being Rational
  • Cognitive Reflection and Decision-Making
  • With Just the Facts, We Can Be Rational
  • We Follow Our Emotions to Fit In
  • Practical  Advice: Recognize that You Are an Irrational, Emotional Being

Myth #2: It’s Your Fault

  • Life Happens
  • The Stunning Realization
  • Using a Stacked Example to  Prove the Point
  • The Folly of the Financial Gurus’ Advice
  • Reasons Why Your Financial Woes May Not Be Your Fault
  • So Whose Fault Is It?
  • Practical Advice: Focus on the Positive

Myth #3: Experts are Experts

  • All Experts Are Biased
  • Follow the Money
  • The Myth of the Unbiased Banker
  • The Tyranny of the Experts
  • Practical Advice: Nobody  Cares About Your  Money as Much as   You Do

Part 2: Debt

Myth #4: Give Credit Where Credit Is Due

  • Credit Is Debt
  • I Am a Good Person Because I Have a High Credit Score
  • The Rule of 72
  • The Credit Score Scam
  • But What About Free Credit Scores?
  • Worrying About Your Credit Score Is Missing the Point
  • Practical Advice: Focus on Your Goals, Not Your Credit Score

Myth #5: The Most Important Number is the Monthly Payment

  • The Monthly Payment Is Almost Irrelevant
  • Isn’t This Obvious?
  • Practical Advice: Crunch the Numbers

Myth #6: Bank at Only One Bank

  • There Are Two Problems with Having Just One Bank
  • Dark Side #1: Fees
  • Dark Side #2: You Lose Control
  • Practical Advice: Spread Your Wealth

Myth #7: When a Collection Agent Calls, Always Pay Up

  • What You Don’t Know about Collection Agents
  • Collection Agencies Earn a Commission
  • How the Statute of Limitations Works against Collection Agencies
  • Why Do Collection Agents Want a Small Payment?
  • Practical Advice: How to Deal with Collection Agents

Myth #8: Pay Your Small Debts First

  • Math or Psychology?
  • A Repayment Strategy
  • Callable and Secured Debts
  • Practical Advice: Set Your Priorities

Myth #9: Cash In Your RRSP to Pay Off Debt

  • Retirement Accounts Are for Retirement
  • Seizable Assets
  • A Debt-Reduction Strategy When You Have Assets
  • Practical Advice: Bankruptcy May Be Preferable to Cashing in Retirement Accounts

Myth #10: Payday Loans Are a Short-Term Fix for a Temporary Problem

  • The Real (Very High) Cost of Payday Loans
  • Payday Loans Are a Symptom, Not the Problem
  • Practical Advice: Be Creative, Find Other Options

Myth #11: There Is Good Debt and Bad Debt

  • Is It That Simple?
  • Who Cares? I Just Want to Buy That House
  • If How We Feel About Debt Shouldn’t Govern Our Decisions, What Should?
  • Practical Advice: Debt Is a Tool — Use It Only if It Fits the Task

Myth #12: Bankruptcy is the Easy Way Out

  • Bankruptcy Is Sometimes the Best Strategy
  • Why Some Say Bankruptcy Is Morally Wrong
  • Debt: The Real Numbers
  • Some People Can’t Pay Their Debts
  • Practical Advice: Pay Down Debt or Go Bankrupt?

Part 3: Real Estate

Myth #13: A House Is a Great Investment

  • What Is an Investment?
  • Your House Does Not Generate Income
  • Opportunity Cost
  • Houses Don’t Always Go Up in Value
  • So Should I Buy a House or Not?
  • Keeping Up with the Joneses
  • Practical Advice: Take Emotion Out of the Equation

Myth #14: Owning A House Gives You Stability

  • A House Is an Anchor
  • Practical Advice: Look Ahead

Myth #15: The Bigger the Mortgage, the Better

  • The Chapter That Writes Itself
  • The Appropriate Level of Leverage
  • It’s Not Just About the Numbers
  • How to Avoid Being House Poor
  • Practical Advice: Buy or Rent?

Part 4: Budgeting and Planning

Myth #16: Investment Expertise Is The Key to Good Money Management

  • Investing Is Not the Key Component of a Successful Financial Plan
  • The 80/20 Rule of Money Management
  • When Should You Start Investing?
  • Practical Advice: Focus on the Basics

Myth #17: Budgeting Is Essential for Financial Success

  • Budgeting Is a Waste of Time
  • Why Is Budgeting a Bad Idea?
  • How to Not Budget
  • What About Saving Money?
  • What Day Is Christmas This Year?
  • The Secret Benefit of Not Budgeting
  • But I Like to Budget
  • The One Example Where a Budget Is Not a Waste of Time
  • Practical Advice: The Perfect Budgeting System

Myth #18: I Am Immortal

  • There Is More to Death than Life Insurance
  • The Death Checklist
  • The “In the Loop” Checklist
  • Practical Advice: Information Is Power . . . and Insurance for Your Family

Myth #19: Pay Yourself First

  • Saving Isn’t Always the Best Strategy
  • But I Want to Establish a Savings Habit
  • Practical Advice: Adopt Good Financial Habits

Myth #20: Joint Bank Accounts Are Essential for Couples

  • Should You (or Shouldn’t You) Have a Joint Bank Account?
  • When It Makes Sense to Have a Non-Joint Account
  • Why Is This an Issue?
  • Practical Advice: Look Out for Yourself

Myth #21: You Should Always Help Your Family and Friends

  • Never Loan Money to Family or Friends
  • How to Say No (or Yes)
  • House Loans
  • What About a Second Mortgage?
  • The Bailout
  • Practical Advice: The “Helping Family” Checklist

Myth #22: Life Is Like A Box of Chocolates

  • Life Isn’t Always Sweet . . . But It Is Predictable
  • The Money Plan
  • The “Everything Else” Plan
  • Practical Advice: Prepare for the Inevitable


  • Just Because It’s in a Book Doesn’t Make It True