Book Review & Giveaway: The Simple Dollar By Trent Hamm

The Simple Dollar book comes as close to a page turning thriller as a personal finance book can get!  I read the book in a couple days when I went on a business trip and just enjoyed how Trent integrates his personal life with personal finance teachings.  If you’re a personal finance junkie like me, when you finish the book you’ll be wishing for more.

The book is a quick read at just 255 soft cover pages long.  Trent’s writing is quite eloquent and captures the reader’s attention immediately.  Furthermore, Laura from the FT Press/Wharton School Publishing has promised to provide a three book giveaway!  Thanks Laura!

I used this opportunity to get in touch with Trent to pick his brain about blogging, his financial viewpoints, as well as learn more of his story on how he came to be.  Hope you guys enjoy, and follow the directions at the end for your chance to win!

THE INTERVIEW

Sam: Hi Trent, thanks for agreeing to answer some of my questions.  To start, why do you think there’s such a large disconnect between people’s desires and their ability to pay for these desires?  In other words, do “C” students deserve “A” lifestyles?

Trent: In a word, marketing.  We are inundated by it, and all of it constantly portrays the idea that everyone deserves only the best.  Of course, the reality is that most people can’t afford the Escalade, the mansion, and so on.  It’s in trying to reach for that unreachable goal that many people fall into bone-crushing debt.

Sam: Everybody knows that education is a core building block for people to make more and do more with their lives.  Why do you think people don’t study harder in school to give themselves more choices in life?

Trent: Most students simply don’t have the maturity to properly value their education.  They view it as something else just to get through, not something that can build the foundation of their lives.  I think that many students are not well-served going to college directly after high school.

Sam: How much money saved is enough for you?  Do you look at your finances in a net worth or cash flow way?

Trent: I now look at things in a net worth way, but I think for many people struggling to get ahead, the best way to look at it is a cash flow way because it reveals how debt can really strangle you.  For me, “enough money saved” is an amount where my family can survive and even thrive on the interest earned.

Sam: In our current economic environment, are you more a proponent of raising taxes to reduce the budget deficit or reducing spending?  Do you worry about the budget deficit and our economy much?

Trent: Reducing spending.  We overspend grotesquely in many areas.  I have no problem with most local spending or state spending – national spending is the problem.  I think, though, that the national debt problem isn’t as bad as many people want to make it out to be.  The best way to look at debt is as a percentage of GNP, which reveals we had far more national debt growth during the Reagan years than we’re having today.

Sam: Would you rather make $500,000 a year doing something you don’t love, but don’t hate?  Making $500,000 does not preclude you from finding another job that you do love.  Or would you rather make $50,000 doing what you love, but never making any more?

Trent: I’d make the $500,000 for one or two years, then walk away.

HIGHLIGHTS & THOUGHTS FROM THE BOOK

Sam: In Chapter 8, entitled “Frugality As A Framework” you touch upon frugality and food.  I just went through my credit card statement, and a whopping 50% of it is from eating out.  Given food is a passion of mine, is it worth cutting down something that I enjoy so much?  Is it worth cutting down spending on anybody’s passion for that matter?

Trent: If food is your passion, why are you not just buying high quality ingredients and preparing meals at home?  I don’t think there’s anything wrong with spending money on something a person is passionate about.  The problem usually comes about when people are passionate about so many things that they can’t adequately enjoy all of them.  Focus your energies on a smaller set of passions and trim the other areas and you’ll almost always be better off.

Sam: In Chapter 14, entitled “Recasting Retirement” you discuss a great concept called the “crossover point” where the income from your savings and investments equals your salary so you have the complete freedom to do whatever you want.  Most people can’t achieve this, but they can achieve a partial crossover point where there’s enough to take a job that pays less, but which you enjoy that much more.  Talk about how to save money and tell us how many years it took you to reach that partial cross over point, and then full crossover point after graduating college?

Trent: I am currently on pace to reach a partial crossover point in about seven years and a full crossover point about ten years after that.  It isn’t easy, but reaching it is so incredibly life-affirming that it’ a worthwhile goal.

Sam: Is being happy as easy as “choosing to be happy” as you write in Chapter 17, “Holding You Back”?

Trent: I think it is.  If it’s not, I would be concerned about depression.

Sam: One of your big tenets is to stay out of debt, so you have the flexibility to do whatever you want in life, and take advantage of good opportunities.  What do you say to those who have been able to take on a large amount of debt, live the life of their dreams, and not pay them off by declaring bankruptcy?

Trent: Bankruptcy isn’t an easy solution that solves all of your problems. Most bankruptcy arrangements simply put you on a forced payment plan and completely decimates your credit.  The only debt that “goes away” in bankruptcy is usually unsecured debt.  If the bankruptcy myth were entirely true, there would be no foreclosures.

BLOGGING & WRITING

Sam: You have shown that you can follow your dreams and do well financially in the process.  Before you walked away from your 9-5 job, how much do you financially plan out your future income and expenses?  Why do you think more people don’t do what they want to do, even part time?

Trent: During the run-up to my career switch, I did a ton of planning.  More importantly, though, I invested almost all of my free time during that period to building The Simple Dollar.  I think that many people don’t have the self-discipline to invest their spare time into building something like that.  They come home from work, worn out from the day, and it’s much easier to kick back and watch a television show than to spend several hours trying to build something else.

Sam: What are the one or two most popular topics and posts on your site and why do you think that is?

Trent: The Reader Mailbags are the most popular things I write.  I think it’s because they address the problems of a lot of different people all at once.  They give little tastes of a lot of different lives.

Sam: You are one of the most prolific personal bloggers in the community.  Tell us whether it’s easier writing a book, or writing 100 blog posts and why?

Trent: The blog posts, only because you have to come up with 100 different topics.  The book basically focuses on one thing that I break down into smaller pieces.  Obviously, the book blows away any one blog post because of the sheer focus and effort – they’re incomparable.  The real challenge for me is coming up with 100 different *good* topics for the bog.

Sam: Is writing a book a profitable endeavor?  What metrics do you use to determine whether your book is a success?  What constitutes a “best seller” in the publishing world?

Trent: In many ways, I view writing a book as something of an advertisement for my web site.  I take many of the ideas I’ve started to flesh out on the site, flesh them out further, and make sure that some of the most key, basic information is found in the book.  This way, when someone comes across that book, they’ll read it and perhaps, from there, read the website.

Writing a book is not a highly profitable enterprise unless you’re selling a *lot* of copies.  I would estimate that in my case, time spent on a book is less profitable (in a straightforward way) than time spent on blog posts.  However, the book may, in the long run, drive additional readers.

Sam: Any plans for another book in the future?

Trent: Yes.  I am working on three different ideas, all of which are far less directly connected to personal finance than my first two books have been.

Sam: Any final thoughts for the reader and why they should buy your book?

Trent: The Simple Dollar takes the dry elements of personal finance and inserts a human edge that is hard to find.  It’s my story – failures and successes and all – with some lessons and ideas extracted that you can use in your own life.

TO COMPETE TO WIN ONE OF THREE BOOKS

* Tweet the book review – 1 point

* Follow me on Twitter – 1 point

* Sign up for my RSS Feed – 2 points

* Comment whether you think “C” students deserve “A” lifestyles – 1 point

* Visit Yakezie.com and sign up for their feed – 2 points

The giveaway closes on Mon, Sept 13th.  Please comment what you’ve done.  Good luck and thanks again Trent for your thoughts!

Keigu,

Sam @ Financial Samurai – “Slicing Through Money’s Mysteries”

Follow on Twitter @FinancialSamura and subscribe to our RSS or E-mail feed.

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. says

    Interesting interview, Sam; it’s always interesting to read interviews, as you can get a glimpse into the minds of both the interviewee and the interviewer (particularly in cases like this, where the interviewer, you, clearly put quite a lot of his own personality and feelings into the interview). Good job getting into Trent’s head, and getting a lot of good reactions as a result.

    Now, onto the question of ‘C’ students deserving ‘A’ lifestyles. I think I answered this before, when you first posed the question, but allow me to answer again. I don’t think that any one aspect of a person’s life (in this case, grades) should be the one deciding factor that determines how well they can live; doubly so if that one aspect is something that occurred back when a person was in their teens and early twenties. People change and grow (hell, supposedly you don’t reach mental and emotionally maturity until around the age 25, well after most people have graduated from college), and locking someone in a mediocre lifestyle because they goofed off in high school seems a bit harsh, to put it mildly.

    Now, this is not to say that doing well in school shouldn’t have its rewards, and that doing poorly shouldn’t punished; but there’s already quite a bit of that occurring. (Try to get into a top school with a C average (without having wealthy parents to buy your way in), to say nothing of getting the best scholarships.) But, if I were deciding justice in the cosmos, I’d be much more inclined to reward the C-student who worked two jobs to put himself through school, studied religiously on a nightly basis, and tries to improve his scores through tutoring and other study aids, but simply can’t do better than a C, compared to the idiot savant A student who coasts through school without really having to study, and spends more time playing video games than cracking the books. It’s not that grades aren’t important, but other factors can mitigate the impact of grades.

    So there, a comment on whether ‘C’ students deserve ‘A’ lifestyles. I’ve also re-tweeted this blog post, been a long-time twitter follower of yours, had this blog on RSS reader (it was the first one I added, after my own, when my reader crashed and I lost all my feeds), and will sign up for Yakezie.com just as soon as I finish posting this comment (and maybe having breakfast; it’s nearly eight am on the East coast, and I’m getting hungry). Good luck, my friend.

  2. says

    I already do these -

    * Follow me on Twitter – 1 point
    * Sign up for my RSS Feed – 2 points
    * Visit Yakezie.com and sign up for their feed – 2 points

    Now I have tweeted the review too.

    I your “C” students deserving an “A” lifestyle post, you were talking about how they perform at school. I don’t think someone should be punished for doing their best and working hard but still not getting good grades. But generally if you mean how one chooses their career path and how hard they decide to work to get there, I don’t think “C” students deserve an “A” lifestyle. I am not talking about just school. If school is not for you but you have struggled to build a future for you in some other way (like building a business) and your chosen path has the promise to deliver your dreams then yes they deserve that lifestyle. But if you just slack off not working hard and think you “deserve” to get things just because you “also” went to school, then no I don’t think they deserve the “A” lifestyle.

  3. says

    Great post and interview, Sam! I am already following you by RSS and on Twitter, and follow Yakezie on Twitter. I had not yet subscribed to Yakezie RSS so I did that now. I also tweeted the book review on Twitter. Does anyone *DESERVE* any one lifestyle just because they got A’s in school? I don’t know that that is a good way to determine what type of lifestyle a person ends up with. There are drop outs all over the place who are self-employed living the “A” lifestyle. This just might deserve a whole entire blog post over at my place. LOL

  4. says

    Great interview Sam! I’m a big fan and regular reader of The Simple Dollar…I just wish I could comment! I gave up because they all just say “awaiting moderation” even months later. Oh well.

    But anyway, I’d love to read Trent’s book. I just tweeted this post and I already subscribe and follow you and the Yakezie.

    As far as your question…I don’t think getting an A or a C in school means a damn thing. It’s your continuing effort that matters. If you got all C’s in school but then you smartened up and realized you needed to change your ways and started coming home from work building a business in your spare time as Trent discusses above, then yea you deserve to live like an A lifestyle. And the reverse holds true for the honor students resting on the laurels and trying to live off their past achievements.

  5. Craig Gonzales says

    What a great interview. If you remember from my brief untemplater discussion with Colby, I think grades are incredibly important.

    Do C students deserve A lifestyles? In short, no. The “quotes” implies effort, not necessarily intellectual ability. There are plenty of drop outs or not academically brilliant types that do very well personally and financially. But they work hard and get a bit lucky.

    Terrell Owens might not even be a “C” student, but his worth ethic has made him “worth” his success. His mouth on the other hand. . . . .

    So, if people forgo hard work, they don’t deserve the “a” lifestyle.

    CG

    ps – have done all that you asked – mostly before now.

  6. says

    Hi Sam,
    I tweeted the book review
    I already subscribe to your RSS feed
    I subscribed to Yakezie’s RSS feed
    I already follow you on Twitter

    “C” students that earn a “A” lifestyle through hard work, application of life skills and good fortune should not worry about the world determining whether or not they deserve the “A” lifestyle. Uncommon sense is not learned in textbooks. Gates dropped out of Harvard and earned his A lifestyle.

  7. says

    Thanks for sharing this interview, Sam. I’ve been a reader of the Simple Dollar and like Trent’s personal view on finance. I love the quote he mentioned above about education:

    Trent: Most students simply don’t have the maturity to properly value their education. They view it as something else just to get through, not something that can build the foundation of their lives. I think that many students are not well-served going to college directly after high school.

    So true! There needs to be a way to reach kids and get them to begin to understand how important their education is for their own future. Hmmm….something I need to incorporate into my teaching. (this goes along with autonomy, mastery, purpose – from an earlier post you shared!)

  8. Tiersa says

    I tweeted the book review
    I subscribe to your RSS feed
    I subscribed to Yakezie’s RSS feed
    I follow you on Twitter

    Thanks for the interview…as far as do “C” students deserve “A” lifestyles, my initial thought is only if they earn it! I know it’s a tad simplistic, but part of your lifestyle is the effort you put in to reaching it, and part is your belief that you can and do deserve it, but you can’t get their by belief alone.

  9. Tiersa says

    And yes I saw my typo on THERE!! ;)

    Tiersa :
    …t is your belief that you can and do deserve it, but you can’t get their by belief alone.
    [Reply]

  10. says

    * Tweet the book review – 1 point

    –> Done :)

    * Follow me on Twitter – 1 point

    –> Been Done :)

    * Sign up for my RSS Feed – 2 points

    –> Been Done :)

    * Comment whether you think “C” students deserve “A” lifestyles – 1 point

    –> In a word no. You get the lifestyle you deserve by bringing value and contributing. The more you do that, the more you deserve an A lifestyle. Even if someone is doing all they can, they can work their way up to being an A. If your value is that of a C, then expect your lifestyle to reflect your values.

    * Visit Yakezie.com and sign up for their feed – 2 points

    –> Done

  11. Charlie says

    Nice interview. I like the comment about how so many students aren’t really aware of how much their performance and college education will shape and impact their future when they are going in straight out of high school. I was a pretty good college student but I could see it being a completely different experience if I had taken a few years off to try working full time first. When you’re 18 you think you own the world and know everything but wow how clueless we were looking back now. I wasn’t brilliant at 20 by any means but every year around that age really impacted my maturity and view of the world. That said if I had taken 2 years off after high school I think it’d also be a quite a challenge to get back into the rhythm of taking classes and studying full time.

  12. says

    Sam, I expected a great interview from you and that’s what I got! I like your insightful questions. I knew you wouldn’t just throw a bunch of fluff out there. I really want to read this book now between your review and JD’s negative comments – I need to see for myself!

    I couldn’t believe I did not have either feeds!! I signed up for both yours and the Yakezie.

    By the way – I do believe that SOME C students deserve A lifestyles because I think that people should be following their strengths and their passions and allowing those to drive their vocation choices and business ideas. In other words, you could have a student who is horrible in math, science, history, etc but excels at English and he/she can use that to start a successful blog, become an entrepreneur and do amazing things with their eloquent speech!

    Don’t assume grades reflect a person’s ability or intellect. Yes, we should work hard, study and try our best to get good grades – but sometimes our best is a C. Maybe the question should be – “Should lazy people deserve “A” lifestyles?” Then my answer would be no!

    Maybe deserve is the wrong word altogether.

    PS – I’ll be tweeting this post too. Already following you on twitter = 5 points! ;)

  13. says

    Solid questions and answers gentlemen.

    Do “C” students deserve “A” lifestyles? Lifestyles are always relative, but to deliberately answer the question according to the intended meaning… no, they do not.

    I am excited to watch Trent grow in published author topics, he is a very stalwart writer.

  14. says

    Great interview!

    I don’t think anyone “should” live an “A” lifestyle, if you mean multiple cars, huge overdecorated houses, and crazy shopping. Even if you can afford it, how is that good for the world as a whole? If you have worked hard and have the money, there is nothing wrong with spending more than some others, but wasteful excess is just wrong regardless.

  15. says

    I’m not entirely sure what an “A” lifestyle is – it probably looks different for everyone. That being said, I definitely believe you have to work for what you want. There is no easy path to getting what you want. I was a B student in school, mostly because I was too lazy to study as hard as I should have. It definitely impacted me negatively when looking for internships which in turn prevented me from getting the best jobs. I certainly didn’t deserve to get some of the jobs my friends were getting.

  16. says

    Glad to see you getting back into the book reviews. Emailed Trent myself about this book, but never really followed up.

    Interview breakdown into segments was a nice touch.

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