Written By: Kimberly Sorrell, AFC® Candidate
“Napkin Finance: Build Your Wealth in 30 Seconds or Less” by Tina Hay covers complicated financial terms in a simplistic manner. The structure focuses on explaining financial topics in a napkin-sized, easy-to-digest visual format. The information aligns with the AFC Core Competencies and works well as an AFC exam study guide supplement; in fact, it was one of the books referenced in the online study guide.
Each topic provides an explanation, overview, and short quiz to confirm understanding of the material within the section. The concepts within each section are:
Section 1: Money 101
The first chapter discusses the basis of what a financial counselor would begin with their client such as banking information, how compound interest works, how to build an emergency fund, savings and budgeting, and the impact of debt on a budget.
Section 2: Credit Where It’s Due
This section focuses on how to build credit, how to improve credit scores, credit score ranges, and the components of credit.
Section 3: Buy Low, Sell High
The topic reviews concepts of investing from how investing works to asset classes and diversification to the risks versus rewards.
Section 4: Paying Your Dues
This part of the book focuses on paying for college, various types of student loans, financial aid, college savings plans, and how to pay off student loans.
Section 5: Into the Sunset
This section shares to fund retirement, comparing retirement accounts, and defining what social security is all about. It also breaks down steps for estate planning.
Section 6: A Wild Ride
This section defines stocks and explains how the stock market functions. It also simplistically explains mutual funds, exchange-traded funds (EFTs), and Initial Public Offering (IPOs).
Section 7: EZ Does It
A play-on-words, this topic provides a breakdown on taxes, how tax returns work, 1099 versus W-2 employees taxes, and what’s loved about tax deductions.
Section 8: Go Big
This section is for entrepreneurs. It talks about starting a company, things to know about organizing a business plan, and how to raise money and get funding.
Section 9: Voodoo Economics
It is all about the Gross Domestic Product (GDP) and how the economy works. This section defines inflation, how the economy shrinks in a recession, and breaks down how the Federal Reserve keeps the economy and financial system operating.
Section 10: The Bottom Line
The financial side of business is the focus by discussing financial statements, profit and loss, balance sheet, and liabilities.
Section 11: The Future of Money
The focus is all about how cryptocurrency works– various types of cryptocurrencies, opportunities for companies to raise money through Initial Coin Offerings (ICOs), and the Blockchain that powers Bitcoin.
Section 12: Wow Your Friends
This section is about funding and investing. It discusses opportunities to raise funds through crowdfunding, the Rule of 72, how to become a philanthropist, and hedge funds.
This book is a good resource for helping clients understand difficult financial concepts and simplifying them by showing a visual explanation. It is not only good for clients, but also helped me prepare for the AFC exam. The book and website are located in the AFC Online Study Guide in module 27.0 Investment Choices.
My learning style fits with the napkin-sized examples as I find it difficult to read textbooks. I was struggling with reading, understanding, and retaining information from the self-paced study textbooks. When reading Napkin Finance, the visual explanation made learning much easier; I began to find joy in learning more complicated concepts.
In the future, I will use this book as a visual tool when earning my experience hours by working with low-to-moderate income clients.