Financial Freedom on $5 a Day: A Step-by-Step Strategy for Small Investors

Kathleen H. Brown, formerly an associate professor at the University of
Guelph, is a financial consultant.

You would like to become financially independent, but you do not know
where to start. You feel guilty about having saved little, but perhaps
next year you will have enough to start a savings plan. Chakrapani
explains a simple system in this book. Start now to save a set amount
each day—$1, $5, or more—and be consistent. Recognize that tomorrow
will never be better than today to start saving, and that motivation and
determination are the key ingredients, not the amount of your income.

Small, steady additions to savings, well invested, can grow to sizable
amounts. The book’s example, showing that saving $5 a day for 35 years
will grow to $1.2 million, is based on the rather unrealistic assumption
that an investor can earn an annual average of 12 percent, compounded
monthly, over such a long period. Even at lower interest rates, however,
a steady savings program will take advantage of the magic of compound
interest.

Having saved money, the investor’s next step is to make it grow. The
author offers a broad range of possibilities, explaining how to get
started in money market funds, other mutual funds, stocks, bonds, gold,
silver, and real estate. A criticism of this book is its too broad
scope. Getting small investors started on a regular savings program is
an excellent idea, but one might assume that, after a time, they could
broaden their investment knowledge with other sources of information.
Investments in metals, options, and commodities do not really fit in
this book. It would be more helpful to offer more depth in the topics a
beginner needs to understand.

In spite of too much breadth and not enough depth, this book does offer
inspiration and motivation to reluctant savers.