Want to get a grip on your finances? Need a UK Money Management 101? Then you’ll find How To Fund The Life You Want [1] an excellent starting point.
I could imagine this book being the essential companion to an online course that all Britons took in their late twenties. Just imagine! An investment in everyone’s financial future and education.
Alas in our dreary reality – wandering in the political spectrum between the Wild West and the Nanny State – the UK prefers to muddle through.
We’re left to work things out for ourselves.
The trick is to wake up before it’s too late – and to know where to look for help.
Pointing you in the right direction
How To Fund The Life You Want is a great place to begin because:
- Its guidance is sensible, easily digested, up-to-date, and presented so that anyone can tailor it to suit.
- It’s a straightforward read that skates lightly in and around financial industry jargon. Prior expertise is not required.
- The authors have structured the book to provide a route map of the way ahead, with recommendations on additional field trips you might take. For example, exploring the back roads of the tax system, or the cul-de-sacs in your own investing psychology.
- Taking control of your entire financial future is daunting but these guys show it’s achievable.
How To Fund The Life You Want: who it’s for
The book’s authors – Robin Powell and Jonathan Hollow – state upfront:
“We have written this book for people in the UK who feel they don’t know enough about pensions and investing to plan for their retirement.”
Indeed the overall thrust of the book is very much about helping you to retire at a time and income level of your choosing.
However I think the authors’ holistic approach gives the book wider application, as they gently encourage readers to think about their money values (and taboos), and what it’s all actually for – a key part of a full personal finance awakening.
Powell and Hollow introduce the character of our future self as a person worth investing in – versus our overweening current self – in order to break down our natural inclination to under-save and prevaricate about the future.
They also lay out an elegant money management system that could help anyone ensure their income flows first to meet bills and debts, with the remainder channelled to fulfil the needs of both your current and future selves.
And as with the rest of the book, the money management section is written with empathy for the needs of people who are not natural finance ninjas.
This chapter particularly benefits from Hollow’s experience working on the superb Money Helper [2] consumer finance site1 [3], and his own struggle to tame budget-o-phobia with apps and behavioural hacks.
By the final page, the authors have nudged us into considering how to identify scammers and financial sharks, when it makes sense to engage a financial advisor, and how to reconcile your personal need for a result with your ethical values using ESG2 [4] investing.
Good foundations
Long-time Monevator readers will recognise the book’s investing guidance is founded on solid bedrock:
- First grab your day-to-day finances by the scruff.
- Invest in passive investing products and keep your costs low [5].
- Understand financial markets are a rollercoaster [6].
- Understand risk [7] is a multi-headed beast.
- Develop the wisdom to accept what you can control and what you cannot [8].
- Gain a feel for the numbers [9] that can help you fund the life you want.
It’s sound advice that should be mainstream in the UK – yet it isn’t.
The authors aren’t radical FIRE [10]-brands or passive investing zealots. They’ve written this prescription because the evidence leads them to believe it’s the best way for most people to achieve their financial goals [11].
But they’re careful to remind us that this stuff isn’t set-and-forget. New evidence, products, or regulation may emerge that changes the game.
So stay engaged [12]!
How To Fund The Life You Want: why it’s good
How To Fund The Life You Want [1] is the best entry-level book I’ve read for UK residents who want to take charge of their financial future.
It’s written for those who don’t yet know what path they might take:
- DIY investor?
- Default into some combination of Nest workplace pension and robo-advice solutions?
- May yet decide to engage a financial advisor?
Or perhaps you’ll devise a hybrid plan? One that mix and matches all of the above?
The authors sketch out your many options.
And that leads me to my one note of criticism. Actually more of an observation about the book’s role – and an acknowledgement of the messy reality of the UK’s consumer financial market.
How To Fund The Life You Want covers so much ground that inevitably it covers it lightly.
True, for some people this will be as much detail as they can take. But others may think it skims over important points.
Personally I’m a details man. But even I can see this book is a masterclass of streamlining.
It’s incredibly hard to make the complex seem simple. But Powell and Hollow have clearly thought deeply about when to hold your hand, when to prod you to do your own research, and when to invite you to disentangle your feelings on a money issue. (You can use even their accompanying workbook as a prompt if you’re so inclined).
They also refer the reader to a useful collection of online calculators and other resources they believe can help.
A pillar for your investing bookshelf
The fact is that the scope of UK personal finance is too big for any one book. And no one in their right mind reads a single article, or even an entire book, and believes that’s the last word.
So for me, How To Fund The Life You Want is the ‘big picture’ book for newbie UK investors.
It provides essential onboarding and orientation material if you haven’t invested before – or if you haven’t gotten the memo yet about avoiding market-timing or punting on currencies and crypto.
My recommendation is to read this book if you’re at that stage of your journey. (Or gift it [1] to anyone you know who is!)
I’d suggest you then pair it with a dedicated UK investing book such as Lars Kroijer’s Investing Demystified [13].
Finally, keep up-to-date through Powell’s own website The Evidence-Based Investor [14] and – though we hate to toot our own horn3 [15] – Monevator’s own passive investing [16] resources.
I enjoyed How To Fund The Life You Want [1] anyway, despite being about as wizened as a UK passive investor can be.
But if I was starting from scratch, this is the UK personal finance book I’d want to read first.
Take it steady,
The Accumulator