Your Money Milestones
A guide to making the 9 most important decisions of your life
Moshe A. Milevsky, PH.D.
I read this book very quickly. Partly because it was interesting and partly because I had to return it to the library in 3 days!
I love Milevsky’s take on human capital “The most valuable asset class for most people during their working years is their human capital.” He presents the idea that human capital should be viewed the same as other assets such as a gold mine or oil well. When preparing a person balance sheet to define our net worth our human capital should be included. He calls it a ‘Holistic Person Balance Sheet’. You can find out your human capital investment potential by using the a calculator he created at www.qwema.ca [edit- this is the link he published in his book but it didn't work when I tried it].
I also took a lot from his chapter on tax. He likened the government to a business partner. You might not like them but you have signed a contract and they are your business partners for life. “ If you earn $100, you must share the appropriate sum with your business partner, but if you lose $100, the business partner will subsidize a portion of the loss. And so, just as your partner keeps a close eye on your activities to make sure you pay your fair share of the agreement, you must ensure that your partner is not taking too much.”
What he says about insurance: make your excess as high as possible, save the difference in a savings for insurance reserve fund. Some events like a broken phone are likely to happen but inexpensive and therefore not worth insuring for. Insure for events that are unlikely to happen but would have a significant effect on your family and standard of living for example the death of the main income earner.
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