The Money Game by Charles Green: Book Review

Introduction: The Financial Landscape

Presidential candidate Herman Cain once observed, "If you aren't rich, blame yourself!" — a sentiment echoed time and again in Professor Green's text on personal money management, The Money Game. While it is reasonable to suggest that many, if not most, people will never become rich, it is equally reasonable to suggest that given half a chance, consumers can overcome obstacles to wealth accumulation through improved money management. These issues form the basis of Green's book, which is reviewed below.

Scarcely a day goes by without a new service charge being assessed by banks, and many American consumers have suffered as a result. Not only are bankers after consumers' money, but a whole array of financial services organizations stands ready to exploit the fiscally uninformed, despite the protections afforded by the Credit Card Act of 2009. In this regard, Green emphasizes that, "After the shellacking that many have taken from the financial industry with their bank accounts, credit cards, mortgages, and investments in the past several years, you should know that the financial industry does not have your best interest at heart" (p. 7). Furthermore, Green suggests that the financial industry has intentionally created an environment in which it is difficult or even impossible for many American consumers to ever achieve financial independence. As Green points out, "The way they have treated many Americans, it appears that they don't even have a heart. They behave more like the mob (Banksters), by the tactics they employ against consumers keeping them in debt forever" (p. 7).

While it is easy to point fingers at "evil bankers" as being responsible for many Americans' money problems, the issues involved are far more complex. The lingering effects of the Great Recession of 2008, for example, plunged many Americans into a financial chasm from which there is no easy or quick return. According to Green, "The U.S. faces the most challenging era since The Great Depression. None of us have ever seen the breadth and depth of problems in our lifetimes that we now face in our economy, and everyone will be affected: individuals, households, businesses, and government" (p. 12). Complex problems demand complex solutions, and the current economic environment is certainly no exception. As Green points out, "It took 30 years to descend into our current economic abyss, and the structural issues left in the wake of the Financial Crisis of 2008 will require structural responses — realignment of our priorities and investment in our future — to resolve" (p. 12). While the challenges and obstacles to financial independence are great, so too are the rewards for those who succeed, as the author explains in Chapter 1.

Chapter 1: The Millionaire Mindset

In this chapter, Green makes the point from the outset that in order to achieve financial independence, consumers must first develop a mindset to match. As the author states, "If your mind is not right, you cannot build and sustain wealth for the long-term" (p. 17). In other words, without a guiding vision, consumers will continue to flounder instead of making progress toward their goals.

In this section, Green elaborates on the distinction between those who were once rich but are now broke and, conversely, those who were once poor but are now millionaires. The differences between these two groups, Green suggests, relate to their vision for the future and how prudently and diligently they kept their eye on their monetary goals by putting their money to work for them. As Green puts it, "The millionaire mindset gives every dollar a job, no matter how many or few of them you have. You can easily go from riches to rags if your mind isn't right (like the Brokenaires)" (p. 18).

Even the most ambitious vision for financial independence will be ineffective without a written budget to help achieve it. In this section, Green emphasizes the need to develop a budget that controls consumers' money and keeps it working for them. As he advises, "The purpose of your budget (which is the basis for any financial plan) is to ground your financial goals in reality and to give every dollar a job toward your financial goals" (pp. 18–19). The repeated emphasis on keeping money at work is one of the keys to achieving financial goals, Green says, and he adds that fully 30% of most consumers' income simply disappears without any trace, making a formal accounting all the more important.

Most people live beyond their means, but Green cautions that doing so can cost even more in the long run. Many Americans are fond of instant gratification, and delaying it is rarely a favored alternative. Nevertheless, delayed gratification today, Green says, can have enormous long-term implications. According to the author, "Decisions you make today, even if your financial goals are far into the future, either set you up for success or failure. Time can either be your friend or enemy" (p. 21). Even though "you can't take it with you," Green emphasizes the need to "keep it with you" as long as possible. As he adds, "Living large today will certainly diminish the possibility of living in comfort later in life or retirement because of the opportunity cost imposed each day that your money is not working for you" (p. 21). For every dollar spent today, the author argues, consumers are missing the boat to financial freedom — and it is easy to feel the weight of that argument when Green points out that even a $4 cup of coffee, if invested optimally, could grow substantially by retirement.

This is some of the author's best advice in the chapter. Green emphasizes the need to set aside money for yourself first and then pay everyone else. As he writes, "The amount of money you pay yourself now will have a direct impact on the quality of your life today and in the future. If more people paid themselves first, they would not overextend themselves with credit and they would feel a lot better about their future" (p. 24). Despite the uneasy feeling this creates in the reader — that every dollar spent unnecessarily is a real waste — Green does make a good point with respect to the need to use this step as part of the larger vision toward financial freedom.

In describing his strategy for financial growth, Green emphasizes the need to prioritize how money is spent. For instance, he argues that paying off credit cards first makes more sense than trying to save money, since the payoff is less favorable for the latter. The overarching theme of this section is to put money to work where it will do the most good.

The next step in Green's strategy concerns the need to plan ahead so that appropriate uses of money today will pay dividends far into the future. Green enthuses, "If you save just $1 a day over your whole lifetime, say 70 years, you would have saved about $25,000. Assume an annual return of 8% (for the purpose of illustration), you would have created over $1 million in wealth" (p. 29). Not everyone has a dollar a day to spare or lives to be 70, of course, but this is a dramatic illustration that makes a compelling point.

The bank robber Willie Sutton once explained that he robbed banks "because that's where the money is." Similarly, Green advises consumers to seek out opportunities such as employer matching funds for 401(k) or 403(b) contribution plans, as well as individual retirement accounts. For the truly ambitious, Green goes on to explain the differences in return rates attainable through these various investment methods and provides extensive advice concerning the need for financial security.

Easy credit is the devil's work from Green's perspective, and he practically urges every reader to set his book down and cut up all of their credit cards. Otherwise, he warns, credit card consumers will keep feeding the beast that is keeping them down in the first place. He does admit, however, to the need for some credit for financial security. As Green emphasizes, "We need credit to play, buy a home or car — but don't draw the 'Go To Jail' card and get locked into a situation where their rules keep you down and you either lose the Money Game or it takes you much longer to win" (p. 60).

The key theme in this section is the need to diversify investments to ensure that all of one's eggs are not in a single basket.

Just as with the law, Green suggests that the more consumers know about the rules of "the money game," the better equipped they will be to navigate red tape and financial double-speak in pursuit of their financial goals.

Government grows bigger every year as departmental budgets expand in a cycle that consumes ever more taxpayer dollars. Green emphasizes that today, "The biggest threat to our wealth and financial health is the Money Monster (the insatiable appetite of government to tax)" (p. 64). The author goes on to lecture the government about how it should be doing its job, in much the same way he stresses the need for readers to follow his financial advice.

Conclusion

The research showed that in his book, The Money Game, Charles Green is fully prepared to cajole and even bully readers into following his advice concerning the importance of prudent money management, especially for young people. To his credit, the author succeeds in emphasizing the need to pay oneself first, the importance of developing a realistic budget, and the absolute requirement to put every available dollar to work as soon as possible. Green plays the guilt card time and again to make these points, hoping that consumers will think twice before ordering that pizza or going bowling and instead invest this $20 in something more worthwhile so that it will be worth far more by the time retirement rolls around.

Rather than adopt this extreme level of financial prudence, though, most people will likely still order the pizza or go bowling — but they might have budgeted for this expense beforehand after reading Green's book. Despite some sound financial guidance, many readers might still adopt the perspective that "I might get hit by a bus tomorrow, so why should I save all my money today?" Nevertheless, for those who are interested in building a solid foundation for financial growth, The Money Game is well worth a read.