A Tale of Three Couples

Richard H. Serlin, University Of Arizona

Abstract

This is a fictional, but very plausible and realistic story, of three young couples who started out identically after graduating college at age 22. All three couples were modestly paid social workers, with equivalent starting assets – just two ten year old Honda Civics. However, they followed very different personal finance strategies, and made very different decisions. The first couple followed the advice of Professors Serlin and Warren beautifully and had a very happy and prosperous ten years, accumulating over $200,000 in net worth. The second couple made many of the mistakes typical today and had great stress and struggle, accumulating over ten hard years just $7,500 in net worth. The third couple made most of the typical mistakes we see today and after 10 years ended up bankrupt and divorced. I assign this story in my personal finance 1 course only after students have read cover-to-cover Harvard Professor Warren's book, "All Your Worth: The Ultimate Lifetime Money Plan" (with Amelia Warren Tyagi). If you haven't read this book, you can still get a great deal out of the article, but there are some terms and concepts you may not be familiar with. I do, though, strongly recommend this inexpensive paperback to everyone. I think it is by far the best personal finance book on the market.