A long format book review of Buy This, Not That by Sam Dogen of Financial Samurai
[While this may be one of the lengthier reviews for Sam’s latest release, I hope it will be one of the most comprehensive. I read only a few books annually, given the distractions of modern life. So, I hope this review will offer a compelling take on whether to allocate your precious time to this book from one of the founders of the FIRE movement.]
The personal finance genre is a diverse and relatively young literary topic that encompasses various works. Yet, sorting through what to purchase or borrow from your local library can be daunting. Should you start with books by eccentric spokespersons such as Dave Ramsey and Robert Kiyosaki? Or perhaps you should test the waters by reading various articles online?
Search no more, as you should “Buy This, Not That” by Sam Dogen. Or so the cover says.
This book, which spans three hundred-plus pages, enters a crowded literary market with various entrants and established figureheads vying for your attention.
Does it live up to its name Buy This, Not That? There’s only one way to find out! But first, an author bio is in order. Because, after all, every reader should know the writer before embarking on a story with them. Otherwise, you are trusting your worldview with someone that has unknown credentials.
The forging of a samurai: Getting FIREd up about corporate life
Sam Dogen went through his formative childhood years in the Philippines, Zambia, Japan, Taiwan, and Malaysia, before coming to the United States, where he went on to complete high school, college, and his Master’s Degree. He then climbed the corporate ladders at Goldman Sachs and Credit Suisse.
From the outside, one would assume that Sam’s life fit the prototypical mold of a person bound to ascend the corporate ranks and live the classic American Dream. However, Sam realized that despite achieving the epitome of professional success, he wasn’t satisfied. Instead, he felt like he was living for his profession at the expense of everything else. Something wasn’t right, as Sam describes in the introduction of his latest book:
The following two years saw Sam develop a myriad of health issues, which only compounded his desire to find an alternative to the dominant social norms that continue to encapsulate America: show up to your job (albeit virtually nowadays), work hard, be grateful, and repeat for 40 years.
So, Sam set out to break the mold and embarked on a journey of achieving financial independence at an early age, well before the Financial Independence, Retire Early (FIRE) movement became pseudo-commonplace.
Sam went on to found the personal finance blog, Financial Samurai, in July of 2009 to share his knowledge and not long after departed his corporate job in 2012 after devising an escape plan.
Skip forward to today, and Sam still publishes on his Financial Samurai blog three times a week, where he has reached over ninety million readers. Currently, he is in the midst of releasing his second personal finance book, Buy This, Not That: How to Spend Your Way to Wealth and Freedom, which debuted on July 19th, 2022. I was fortunate to receive a pre-lease copy in return for giving my honest thoughts, a task which I took seriously (2,500+ words later).
The book’s mission statement is to help readers:
- Navigate the illiquid world of applying personal finance content so that they can easily sip down the knowledge needed to create a financial plan
- Determine what to buy and how much to spend
- And how to optimize earned income so that they can maximize their wealth to live on their terms
We will unpack the book now by slicing through its mysteries one section at a time. Then we will weigh whether or not the book succeeded in living up to its namesake.
For those interested in a quick review, feel free to Click here to skip to the final section and closing analysis titled Should you Buy This, Not That?
Part one: An introductory math lesson in FI
Through the chapters that make up Part One, Sam dives into the essence of what Financial Independence (FI) entails, why you should care, how to determine your ideal lifestyle, your required nest egg, and how to calculate your risk tolerance and subsequent withdrawal rate.
He readily acknowledges that each person will have a different lifestyle than the next. For some, that means living in NYC, while for others, it could be living in a traveling van. He also welcomes readers of all ages to embark upon their FI journey.
I found myself, a seasoned yet aspirational Excel user, impressed with the precise yet simple methods Sam provided in this section to help readers determine what financial requirements are necessary for achieving their dream.
One point I’m afraid I have to disagree with Sam on is regarding safe withdrawal rates for retirees. Or, in lay person’s terms, how much a person can withdraw from their investments without causing their portfolio to implode. Sam gives a solid reason for the rate he defines as safe. Still, it is a threshold of comfort most Americans will not be able to afford due to the more extensive monetary saving requirements.
As a longtime reader of Financial Samurai, I am not surprised by Sam’s conservative nature; he previously worked in investment banking, where determining and weighing risk was and remains critical. And, candidly, most people underestimate how risk averse they are until a bear market, which I have seen countless times as a Financial Advisor.
Sam explains that the higher savings required under his model stem from our current monetary environment, where low-interest rates and a potentially lower-yielding market for the coming decade are to blame. I respect his logical conclusion, but I question the feasibility for the masses.
In an acknowledgment of the difficulty in implementing his safe withdrawal method, Sam provides several solutions for the early retiree. These alternatives are a welcome addition due to the financial constraints many Americans face and demonstrate that he recognizes the need for flexibility in achieving retirement.
Sam goes on to challenge the conventional savings wisdom of deferring income into traditional retirement vehicles (think IRA’s, Roth’s, and 401(k) ‘s) by clearly illustrating these accounts are for conventional retirees. He then outlines what assets and habits are needed to supplement the early retiree with passive income.
In concluding Part One, the reader gets a pep talk about how to master their debt. My assertation￼ is that Sam artfully addresses various challenging questions, such as which debt to pay off early versus investing extra cash. Thus, I can unequivocally state that ￼the advice offered in part one of Buy This, Not That is accurate and worth reading.
Part two: Getting acquainted￼ with investing
The beginning of part two covers all things investing and examines how to deploy a reader’s hard-earned capital relative to their risk tolerance.
Perhaps the most memorable passage from this section comes from page 79 when Sam unequivocally states:
These are words well-spoken that every investor must heed and internalize.
One of the more critical issues that Sam discusses pertains to how much risk an investor should take, which he provides a clear framework for determining.
For most people beginning or already embarked upon their FI or wealth-building journey, Sam’s risk guidance is sufficient. But, for those who are number nerds and interested in running countless backtested retirement scenarios, the models provide only a framework to build on.
Throughout the remainder of part two, Sam assures the reader that they are up to the task of building and optimizing a portfolio and how to utilize real estate as more than just a physical investment.
I found the real estate subsection fascinating, as candidly, it is not my forte. Readers will learn the various aspects of the monetary choices and external consequences of purchasing a home, where to live, and how and why branching into a landlordship is worthwhile.
Sam’s grounded, non-conventional, and conservative approach toward real estate is something I wished more would embrace. Because sadly, many people over-leverage themselves when buying residential or building a real estate investment portfolio.
In finishing part two, Buy This, Not That makes a compelling case that real estate is intrinsically bound to one’s wealth and earns my praise for condensing the various points into the included pages. Further, it triumphs by teaching readers risk management and portfolio optimization in a straightforward and comprehensible manner. Something which I have previously written on and advocate for in You’re Investing Wrong: How To Use Portfolio Construction
Let’s take a break. Breathe. Relax. Now gather your thoughts. If you are ready to start reading Buy This, Not That, you can do so here: [Commision free link to Amazon]
For those ready to cover the remaining sections of my review, we will dive back in now!
Part three: How to grow your most valuable asset, i.e., you!
In a switch away from investing in equities and tangible assets, the third phase of Buy This, Not That explores investing in oneself.
I found this section’s focus on growing one’s income a welcome departure from other personal finance advice that focuses too heavily on cutting expenses. While it is true that expense optimization is vital, growing one’s income has a much higher return on investment without sacrificing one’s quality of life.
For those skeptical that they can grow their income, Sam provides many examples of how to increase their earnings. One of these is front-loading one’s career by working (somewhat) longer hours while concurrently pressing for raises or switching jobs. After all, following the status quo never helped anyone achieve retirement earlier.
Sam further discusses how to grow one’s earned income through practical side hustles that are not multi-level marketing scams. In a welcome reprieve for those working jobs they dislike, Sam details utilizing a side hustle to chase one’s passion.
If you love something and are good at it, you are bound to have a higher chance of success. By embracing this strategy, Sam gives readers a ray of hope by offering a more fulfilled present and increased earning potential. He then guides readers on how to craft a severance package when they become ready to pursue their retirement or side hustle full-time.
Overall, I found these three chapters to be concise, practical, and example centric by providing the reader with what essentially amounts to a self-help mini-book that delivers on elevating one’s potential. The only thing asked out of the reader is to have drive and determination.
Part four: A philosophy for happy living
In the first three parts of Buy This, Not That, the reader is immersed in self-improvement in monetary terms. However, as anyone who has achieved financial independence will tell you, money only buys time, not happiness.
In an unexpected twist, Sam devotes part four of his book to the most important things in life: what level of education is enough, finding a partner, whether to have kids and more. Candidly, I hadn’t expected this based on the book’s mission statement. Still, to improve only one facet of your life and not the complete picture is naive. Below is what I took away from this section.
Sam approaches the private or public K-12 and university debate using a fact-centric approach, highlighting the difference in outcomes using averages. I surprisingly learned that private and public schools have little tangible lifetime earrings difference (~9.5% greater income for private school attendees). These findings will undoubtedly relieve the stress for countless parents and potential students weighing such a choice.
Using the same data-driven approach, Sam determines when to have kids, what to spend on a wedding, and whether to marry. Most readers will find his conclusions of benefit.
When discussing love, Sam stresses that finding a partner is essential for feeling fulfilled. He also believes that money and love intersect since humans want to provide the best possible lives for those dearest to them. Therefore, he recommends helping those you love most achieve financial independence.
One point I’m afraid I have to disagree with Sam on is marriage. For low-income earners, he sees no issues. However, for high-income earners, he believes either a prenuptial agreement or cohabitation is the better choice, primarily due to divorce and tax rates.
I have no qualms with prenuptial agreements, but cohabitation lacks certain legal rights. For example, married couples can share a healthcare plan, visit their spouse in the hospital, and make critical decisions for their spouse if an illness or disability comes to fruition. Further, research suggests that legally bound people are happier than those cohabiting. Therefore, I believe the potential tax benefits of cohabitation ￼are trivial compared to the full benefits of marriage.
As you can tell, Sam uses numbers to help make the most staggering decisions in life. While he gets nearly all of the answers to life’s biggest questions right, a numbers-based approach sometimes falls short of determining purely subjective things.
Part four closes with Sam discussing the principle-based aspects of life and presents knowledge sagely. But, in an ode to Sam’s style, I will end this section of my review by repeating his definition of happiness. Happiness is equal to the sum of our expectations less reality, where reality exceeds our expectations — an interesting yet accurate perspective on a deeply non-quantifiable sensation and experience.
Take your shot: It’s time to act
The final passage of Buy This, Not That is five short pages but acts as a self-governing document for those who want to succeed at financial independence and live a better life. It then ends by giving the reader one final pep talk and challenges them to shoot their shot. After all:
Buy This, Not That offers a compelling narrative on how to achieve financial independence, which any person should want. Further, the book illustrates the binary and non-binary decisions and outcomes we face daily when saving and how to overcome them.
By providing a framework for optimizing our choices, Sam Dogen has provided readers with a realistic way to build and accumulate wealth while also living a better life.
In closing, Buy This, Not That lives up to its namesake and fulfills its mission statement. Given my few qualms relative to the overall content this book covers, I can happily state it is a worthwhile and eye-opening read. Further, I wholly recommend purchasing this book, as it will help most people slice through life’s and money’s mysteries.
Thanks for reading my review, and thanks to Sam for the opportunity to read a pre-release copy of this book.
Have a great day!
[I receive no commissions for reader purchases of Buy This, Not That. Further, I was not compensated for my writing. I enjoy Sam’s work and found the opportunity to review a pre-release copy of his book a treat.]
Mile High Finance Guy
finance demystified, one mountain at a time