Comments on: Your Money Ratios – 8 Simple Tools for Financial Security http://cashmoneylife.com/your-money-ratios-8-simple-tools-for-financial-security/ Money Management, Small Business, Career Wed, 23 May 2012 21:16:10 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Ryan http://cashmoneylife.com/your-money-ratios-8-simple-tools-for-financial-security/#comment-21483 Ryan Fri, 29 Jan 2010 14:06:45 +0000 http://cashmoneylife.com/?p=2107#comment-21483 Tax Guy, I agree, the concept of ratios isn't new. You can do a Google search for "how much life insurance to buy" and you will probably receive dozens of sites listing different ratios - 10x annual salary, 15x annual salary, and some that are more complex. The same thing applies to retirement planning and other scenarios. This book applies ratios to many situations and is designed to help people more easily plan for their financial future. As I mentioned in the review, some of these concepts are unique, and some are plain common sense. As a tool, this book works well and can help some people make better sense of their financial situation. Lenders in the US have similar formulas to determine how much credit they will extend (though I think they are a little looser with their purse strings!). Debt to income ratio is the one of the most common indicators used in that situation, but most lenders take into account other factors as well. Tax Guy, I agree, the concept of ratios isn’t new. You can do a Google search for “how much life insurance to buy” and you will probably receive dozens of sites listing different ratios – 10x annual salary, 15x annual salary, and some that are more complex. The same thing applies to retirement planning and other scenarios.

This book applies ratios to many situations and is designed to help people more easily plan for their financial future. As I mentioned in the review, some of these concepts are unique, and some are plain common sense. As a tool, this book works well and can help some people make better sense of their financial situation.

Lenders in the US have similar formulas to determine how much credit they will extend (though I think they are a little looser with their purse strings!). Debt to income ratio is the one of the most common indicators used in that situation, but most lenders take into account other factors as well.

]]> By: Tax Guy http://cashmoneylife.com/your-money-ratios-8-simple-tools-for-financial-security/#comment-21477 Tax Guy Fri, 29 Jan 2010 03:07:41 +0000 http://cashmoneylife.com/?p=2107#comment-21477 The concept of ratio’s has been around in the financial planning profession for years. Here in Canada, it is a little more prevalent but still not widely used by the general public. Banks here do use 2 key ratios to determine the amount of mortgage you can afford. They also apply a general rule of thumb (3.5x annual gross income) to calculate the maximum mortgage someone can afford. Bear in mind interest on the mortgage is not deductible here, so the maximums are lower than in the US. The concept of ratio’s has been around in the financial planning profession for years. Here in Canada, it is a little more prevalent but still not widely used by the general public. Banks here do use 2 key ratios to determine the amount of mortgage you can afford. They also apply a general rule of thumb (3.5x annual gross income) to calculate the maximum mortgage someone can afford. Bear in mind interest on the mortgage is not deductible here, so the maximums are lower than in the US.

]]> By: Jennifer http://cashmoneylife.com/your-money-ratios-8-simple-tools-for-financial-security/#comment-21473 Jennifer Thu, 28 Jan 2010 19:23:47 +0000 http://cashmoneylife.com/?p=2107#comment-21473 I just bought this book and love it already. I am on Chapter 4 right now. It is very easy to understand. I just hope the author is right about Social Security (Chapter 3). I am 32 and from everything else I have heard about Social Security I don't expect it to be available when I retire. I just bought this book and love it already. I am on Chapter 4 right now. It is very easy to understand. I just hope the author is right about Social Security (Chapter 3). I am 32 and from everything else I have heard about Social Security I don’t expect it to be available when I retire.

]]> By: Ryan http://cashmoneylife.com/your-money-ratios-8-simple-tools-for-financial-security/#comment-21472 Ryan Thu, 28 Jan 2010 17:49:09 +0000 http://cashmoneylife.com/?p=2107#comment-21472 You're welcome, Lisa. Thanks for sending the copy. :-) You’re welcome, Lisa. Thanks for sending the copy. :-)

]]> By: Lisa Munley http://cashmoneylife.com/your-money-ratios-8-simple-tools-for-financial-security/#comment-21471 Lisa Munley Thu, 28 Jan 2010 17:45:54 +0000 http://cashmoneylife.com/?p=2107#comment-21471 Ryan, excellent review! I'm so glad you enjoyed the book. Thanks so much for all the time you put into reading and reviewing Your Money Ratios. It is greatly appreciated. Ryan, excellent review! I’m so glad you enjoyed the book. Thanks so much for all the time you put into reading and reviewing Your Money Ratios. It is greatly appreciated.

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