Money magic An economist's secrets to more money, less risk, and a better life

Kotlikoff (Spend 'Til the End, 2008) focuses on studying the economy and how it helps people. Everybody behaves differently towards money, but whether they are a carefree spendthrift or economical, there is a shared concern when money runs out. The first step in assessing how to move towards financial betterment is self-reflection. What is one's standard of living with current income and spending habits? One of the first pieces of advice offered by Kotlikoff is to avoid dipping into retirement savings, more specifically, holding off on accessing social security benefits before age 70--the benefits will accrue more during that time and the individual will be better off in the long run. This is the first of many tips offered that will enable readers to earn more bang for their buck and navigate risk, whether it be opting out of the albatross of student loan debt or managing a 401(k). Kotlikoff's valuable insights will appeal to a wide audience seeking financial wisdom.

Kotlikoff (Get What's Yours), an economics professor at Boston University, offers an accessible guide to sound financial decision-making based on the premise that "even the most responsible, prudent, financially well educated, and psychologically balanced people make major mistakes" when it comes to managing their finances. Every financial choice one makes impacts one's standard of living, he suggests, yet most people make such decisions without thinking through how doing so would affect their future. As a remedy, he presents his MaxiFi Planner program, which lays out how to calculate one's lifestyle cost, plus ways to improve one's living standard, and focuses on "simple and powerful ways to get more money without gambling your hard-wrought savings." Tips come for such tricky but critical life choices include deciding when to retire (plan with "the oldest age to which you could live" in mind), whether to borrow for college (don't, he advises), and how to navigate divorce (do "a cost-benefit divorce analysis"). He offers plenty of investment know-how, too, and ends with his top 50 "secrets" for financial security, including paying mortgages off as fast as possible and "when you get married, count on getting divorced" among them. Full of invaluable guidance, this is a must-read for anyone concerned about their financial future. (Jan.)