Review: Dave Ramsey's Complete Guide to Money: The Handbook of Financial Peace University

Dave Ramsey's Complete Guide to Money: The Handbook of Financial Peace University by Dave Ramsey
My rating: 3 of 5 stars

This book is a great way to learn a little about a lot of financial topics, great for beginners or for people with financial issues. It simplifies things into layman terms so that the average Joe would be able to understand.

Notes:
Marriage counselors tell us that couples who can agree on four major issues have a much higher probability of a successful marriage.
Those 4 things are religion (shared household faith), in-laws (boundaries, influence, etc.), parenting, and money.

Diversify a little further by spreading your investments out over four different kinds of mutual funds. I tell people to put 25% in each of these four types:
1. growth
2. growth and income
3. aggressive growth
4. international

- Growth stock mutual funds are sometimes called mid-cap or equity funds. Mid-cap refers to the fund’s capitalization, or money. So, a mid-cap fund is a medium-sized company. These are companies that are still in the growth stage; that’s why it’s called a growth stock fund. - Growth and income mutual funds are the calmest funds of the bunch. These are sometimes called large-cap funds, because they include large, well-established companies. These funds usually don’t have wildly fluctuating values. That’s good and bad; they won’t shoot up as much when the market’s up, but they also won’t fall as much when the market’s down. These are basically slow-moving, lumbering dinosaurs.
- Aggressive growth mutual funds are the exciting wild child of mutual funds. They represent small companies (so they’re often called small-cap funds), and these are active, emerging, exciting companies. This is the roller coaster of mutual funds. There will be really high highs, and probably some really low lows. I had one back in the 1990s that had a 105 percent rate of return one year, then lost it all the next year. You absolutely don’t want to put all your money here, but you need some aggressive funds in your plan.
- International mutual funds are sometimes called overseas funds, and they represent companies outside the United States. I recommend putting a fourth of your investments in international funds for two reasons. First, you get to participate in the growth of some foreign products that you probably already enjoy; and second, it adds another layer of diversification just in case something weird and unexpected happens to the U.S. stock market.

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