There are many forms of communication; none are as vital as the written word. It is the edited word which conveys more information than any other media. Sure, video is superior when showing majestic vistas, but words, when edited well, are the most powerful learning tool we have. There is a reason the written word has survived so long even with radio, television and YouTube desperate to overturn the monarchy.
Wealthy people the world over credit their success to reading. From Warren Buffett to Bill Gates to Elon Musk to Richard Branson to your favorite accountant, good books are part of the history of the people currently in the winner’s circle. Educated people possess the tools to create the future the rest of us are forced to live in. Most failures can be traced back to a lack of understanding or misunderstanding.
For these reasons I’ve been a dedicated reader since my late high school years. Before that I couldn’t get myself to read a book the the end and it showed. I struggled with direction in life until the magical day I picked up a book from the school library on weather. It was a mere 128 pages and there were a few drawings of clouds and cloud formations, but when I finished that book something clicked and I never looked back.
Before long I was consuming (and digesting) 1000 page books and begging for more. My interest in personal finance was unleashed! I was reading The Wall Street Journal (every section) from beginning to end daily. Business magazines and books were an addiction. (Science fiction novels were also an addiction I never shook if we can be brutally honest here.)
Learning became a part of my daily life, as important as eating and sleeping. I cannot remember a day when I didn’t read at least a few pages of a book. It has been a long time.
From the humble pages of that 128 page book on weather I built a library with well over 2,000 volumes. It might be at 3,000 by now, but I don’t have time to count; I’m too busy reading.
A few months ago I started a Facebook marketing program for this blog. (I fell in love with writing shortly after I discovered the high finishing a book creates which eventually led to this blog.) As the program started a facilitator asked the group for an interesting fact. I said “I read more hours per day than I sleep.” She was shocked! I told her the truth. “I read a lot — several hours per day — and sleep seems to elude me too often for good health.”
Each year I add 50 or so books to my library. This is down from my younger days when I’d add 150 or so novels to the ranks annually, plus a dozen or so meaningful books. Then I visited the library. When I reflect I sometimes feel like Charlie Munger, (Warren Buffett’s right hand man) a book with hands and legs sticking out from it. It is a rare event for me to go somewhere without a book at hand.
If you love books as I do you enjoy lists of good books to help you select your next literary victims. If an educated individual publishes a list of “Best” books I save the list. I’m always looking for more good material and I rely on the smartest people to give me a recommendation.
Fiction is a minor part of my reading now. There is just too much I want to learn before I go to the Great Beyond. My goal is to be the smartest guy in heaven (or biggest smartass in hell). So I read mostly non-fiction now.
Because I read so many books I have a ready mental arsenal to draw from. By sharing with you the best books I read this past year you can focus on the most important material with your limited (egads!) reading time. I hope you pick up my habit of carrying a book with you where ever you go. A few free moments is easily turned into a education if you do.
Below is my list of favorite books I read in the last twelve or so months. There are many more, but I don’t want to bog you down. I grabbed from the stack the books that most moved or educated me. Consume at your leisure. (Consumption is sometimes dirty word in our society. It is far from dirty when it comes to books, learning and knowledge.)
China’s Great Wall of Debt, by Dinny McMahon
There is a fear in the West that China is taking over the world. The China Miracle, we learn from McMahon, is more mirage than miracle. Ghost cities, complete concrete jungles with few people, really do exist in China. Take away all the extravagant (and wasteful) construction and China’s economy isn’t even close to the size of the U.S.
And then there is the debt for all the wasteful building. The tax system encourages bank lending to state enterprises and local governments. The bad debt is hidden from public view. Nobody know how bad it really is. One thing is sure: if it wasn’t that bad there would be no reason to hide the numbers.
China is still a vibrant nation with a growing economy. However, we need to put the economic miracle into perspective. China has lots of problems and time is running out to fix them. The real question is how bad will it hurt Western economies when China implodes?
And China doesn’t manufacture everything! Many products are created and produced elsewhere and shipped to China for assembly. The trade war is unnecessary and more damaging to U.S. companies than politicians are letting on.
This is my favorite business book of the year because it was so eye-opening. I knew China had massive debt and sewer oil was a real issue, but I never realized how difficult the situation in China is.
12 Rules for Life: An Antidote to Chaos, by Jordan B. Peterson
Jordan B. Peterson has been everywhere these last two years. His newest book is a set of rules for living life well. It seems so common sense at first: Tell the truth—or, at least don’t lie; Stand up straight with your shoulders back; and, Pursue what is meaningful (not what is expedient) are three of the twelve rules. But it doesn’t take long before you realize the depth of his message.
Peterson struck a cord in our world of identity politics and constant offense at every action. I’ve written on Peterson’s work before. And here. And ended up with endless grief. People either love his work or hate it. Those who hate did their best to deliver a groin shot to a certain unnamed accountant.
But many do find value from Peterson’s videos and books. 12 Rules happens to be the best selling book this year on this blog. Readers are also clamoring for a review of his earlier book (Maps of Meaning: The Architecture of Belief) since they discovered I purchased. (Note: I started reading Maps, but this one will take a while. This is serious and difficult reading. I’m 40 pages in as I write and will read several other books in between—something I rarely do. The material is just too deep to plow through without a break. You’ll get your review if I don’t suffer an aneurysm first.)
12 Rules is highly recommended. One of the best books ever written on what makes us tick.
Enlightenment Now: The Case for Reason, Science, Humanism, and Progress, by Steven Pinker
Media constantly tells us how bad things are and many times we yearn for the good ‘ol days. But the data doesn’t bear that out. Things are better now than ever and improving at a rapid pace!
I’ve always been an optimist. There has always been a grand appreciation in me for the awesome time we live in. But even an optimist adjusts to our modern opulent lifestyle and begins to wonder.
Pinker not only makes the case, but backs it up with data. This approach appeals to my analytical accountant mind. Here are a few things I found fascinating: We are living longer by a lot, are healthier, eat better, have more wealth, are less unequal (yes, inequality isn’t as bad as we pretend!), enjoy a cleaner environment in most Western nations than a few decades ago, enjoy more peace (no world wars recently), are safer, have more rights, are smarter and have access to more knowledge, and enjoy a quality of life never before experienced by the species.
It is socially acceptable to whine about how bad we have it. Yet the facts are clear. We are in the best of times and the time are getting better! Reading Pinker allowed me to internalize the worldview that the sky isn’t falling and the world isn’t coming to an end.
There is also a good reason for optimism. Warren Buffett is also an optimist. When the world is ending (the stock market is down double digit percentage points) Buffett knows it’s fake news and buys more great businesses at discount prices. If you can discard the negative attitude for a moment and focus on how good the world has become—as outlined by Pinker’s work—you to can make profitable decisions when the Chicken Little’s of the world are screaming like chickens with their heads cut off.
Sapiens: A Brief History of Humankind, by Yuval Noah Harari
Sapiens really surprised me. I’ve read dry mega-histories of the human race and expected the same here. Regardless, I enjoy ancient human history so I pried open my wallet and am glad I did.
Harari compiled an incredibly vibrant and alive story of human history all the way back to the beginning. A good history story allows us to see ourselves in a cleaner and clearer light. This work does just that.
Who we are and where we come from is lost in the fog of a “time from long ago.” In keeping with the theme of this blog, Harari did an excellent job explaining where and when money was created and first used. It was enlightening to see the backstory to our current financial system. It cleared up many questions I had.
We all want to know where we came from. That is why DNA tests are so popular as tools to determine our true ethnic background. Bringing the details into perspective allows us to live a better life, filled with the knowledge we have an important place in the grand scheme of things.
Once you finish reading Sapiens I’m sure you’ll be on the horn with Amazon ordering Harari’s latest classics: Homo Deus: A Brief History of Tomorrow and 21 Lessons for the 21st Century. These two are on my shelf waiting for digestion. How I’m going to keep these off next year’s “Best Books” list is beyond me.
Have things ever been worse when it comes to inequality? Well, actually, yes! It has also been better, too.
Inequality is the buzzword of the year. Media is filled with demands of gender and race equality. We demand equal pay and equal rights. Some go as far as wanting equality of outcome! (I have no idea how to accomplish that. We tried communism in many societies in the 20th Century with less than desirable results.)
Equality is a worthy goal regardless what happened in the past. There is a sense of unfairness when the rich get richer while the poor keep getting poorer. (Refer to Steven Pinker’s book above for a clearer perspective.) There is something noble about helping people with less get more for their efforts. Poor people can be just as hard working (if not harder working) than the wealthy. So inequality is a necessary study.
Scheidel gives us a broad view of equality in the past up to modern times. No spoiler alerts from me. You have to read the book! But let me say this: There are four ways to lower inequality (as history has taught), but you might not like the answer. Worse, equality doesn’t mean the poor become wealthier; usually it’s the other way around. This is an eye-opening book you want to read.
As mentioned above, I read about 50 books a year; a few more if they are short. The list of all I read is more than most can get their arms around. The five books above are page turners worthy of investment. You might want to chisel time out of your schedule for these honorable mentions as they are equally as good as those above. (You should see the good stuff I left off the list. It makes my eyes bleed.)
Energy and Civilization: A History, by Vaclav Smil is the best book I’ve ever read on energy production and consumption by humankind. The facts and figures are addicting. From prehistory to modern times, energy sources and uses are illustrated in an easy to understand format.
Inheritors of the Earth: How Nature is Thriving in an Age of Extinction, by Chris D. Thomas and The Ends of the World: Volcanic Apocalypses, Lethal Oceans, and Our Quest to Understand Earth’s Past Mass Extinctions, by Peter Brannen are two excellent books covering the worries of environmental doom popular on social media and news outlets. Things are not as bad as they seem and there is actually some good news! And history tells a story of renewal, rejuvenation and healing from the planet’s past.
Business Adventures: Twelve Classic Tales from the World of Wall Street, by John Brooks, was promoted on the CNBC website. After Bill Gates gave a nod I made the purchase. As expected, these are twelve really engaging (and informative and instructive) stories of Wall Street behind the scenes. If you like money then Business Adventures will read better than a Stephen King novel.
Hoover: An Extraordinary Life in Extraordinary Times, by Kenneth Whyte. I always thought of President Hoover as the guy who brought us the 1929 stock market crash and The Great Depression. The truth is far from it. Many of FDR’s policies came from Hoover and were not instituted over politics and misunderstanding of economic theory until Hoover was out of office.
I now have a healthy respect Herbert Hoover and his life of public service. Our 31st President was an incredible man of many accomplishments. This biography so moved me I have plans of visiting his Presidential Library in Iowa soon. If only I could find the drive to work as hard and productively as he did.
Finally, we end with a novel: Seveneves, by Neal Stephenson. My shelf is filled with westerns, romance novels, mystery novels and every other genre known to man. What stands out is the shear volume of science fiction I once read. Old habits die hard so I’m back at a familiar trough.
Seveneves is the best kind of science fiction: engaging, entertaining, filled with suspense and mystery, and just enough science fact to make it all work suspending disbelief. This novel start with the moon blowing apart and gets more exciting from there. Two-thirds of the way through the the human race is all but extinct; the attempt to save the world from a lunar catastrophe is nearing an end and seven women (the seven Eves of the future human race) are all that remains of the species. I’ll let you enjoy the story on your own. My guess is you’ll end up staying up too late at night, unable to put this book down, as I did. But trust me, it is all worth it.
These are my favorite books of the past year. I encourage you to read the ones that interest you. Please share books you were moved by this past year. You see, I need more good books to read, too.
More Wealth Building Resources
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PeerSteet is an alternative way to invest in the real estate market without the hassle of management. Investing in mortgages has never been easier. 7-12% historical APRs. Here is my review of PeerStreet.
QuickBooks is a daily part of life in my office. Managing a business requires accurate books without wasting time. QuickBooks is an excellent tool for managing your business, rental properties, side hustle and personal finances.
A cost segregation study can reduce taxes $100,000 for income property owners. Here is my review of how cost segregations studies work and how to get one yourself.
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Many years ago a young man entered my office wanting to see me. He had a fan folder filled with documents and needed his tax return prepared. In a weak moment I allowed him a meeting without an appointment. As I always do with a new client, I started to ask questions. It is my firm belief that you must know your client before you can help him.
Opening a file for a new client requires their Social Security Number. He questioned my need for this information. I explained how I cannot even open a file for him without the SSN. He grudgingly provided the number. As I continued asking questions to understand my new client I was met by a wall of resistance. Finally, the young man had had enough of my questions. He informed me I was on a need to know basis, to which I replied, “You need to know you need to leave.”
The IRS sends agents to accounting offices periodically to test accountants, practices and procedures. After digesting the meeting with the young man I came to the conclusion he was an IRS plant there to test me. Accountants under pressure to build a client base may succumb to temptation. The IRS wants to know which tax professionals are willing to step over the line when pressured by a client.
For some reason I do not feel pressured to cheat on taxes. The tax code is filled with too many opportunities to reduce your tax load without cheating. Savers also have less incentive to cheat as they are treated preferentially by the tax code. I am only interested in the correct answer, not a certain result. If you owe money, you owe money. We can work on ideas to lower your tax bill going forward, but what is past, is past.
Attorneys, doctors, and accountants all need to know their client before prescribing.
Keith’s Rule # 14: Prescription before diagnosis is malpractice.
Knowing the client takes more time in the beginning than the actual preparation work. Some of the learning takes place by undertaking a deep review of the paperwork provided. Most details about a client, however, is gathered by questions. My files are filed with copious notes on clients. Before I prepare a tax return I review notes from past years.
Why is it so important to know your client? It may seem obvious for a doctor. Can’t a tax pro just plug the numbers and go? Sure, if you are a data processor. My clients want more from me and I provide it.
There is a more important question, however. If knowing my client is important, how much more important is it for you to know yourself? The questions I ask are vital in helping me prepare an accurate tax return and provide appropriate advice. You need to have an equally intense Q&A with yourself to understand what you really want in life. Without a full examination of your personal goals and values you will never get the results you want.
The questions I have when meeting with you will be different than the ones you will need answered by yourself. You need to ask and answer certain questions only you can answer. By answering these questions you will gain a deeper understanding of what is really important to you. Here are a few sample questions:
- When do I want to retire?
- How much do I need to retire?
- What will I do in retirement?
- What really makes me happy?
- How much stuff is enough?
- Family? How can I have an awesome family life?
- What interests me most?
The above questions are only a starter. The questions you ask will lead to other, different questions. Maybe you want to reunite with your children or spend more time with a significant other. Others will be focused on early retirement or travelling. For the same reason I ask my clients different sets of questions after I get the basics down, you will also have questions unique to you. Allow your mind to go where it wants. Don’t force it. By having a productive self-talk you will gain a better insight into your personal beliefs, interests, and passions.
Real Life Example
I have always been lucky. Things always seem to turn out right for me. A seeming disaster turns into a wealth of new knowledge I can use to better my life and gain more happiness. You can experience the same luck I have.
Growing up on a farm in rural Wisconsin is not a recipe for financial wealth, especially when the farm entered receivership the year I graduated from high school. Talk about plans going down the drain. It turned out to be a massive blessing. My life took a ninety degree turn the same time I entered adulthood. Without the family farm going under it is unlikely I would have ever entered the tax field. I would have missed all the great people I met along the way, including writing this blog.
Questions were very important to the young man I once was. A few years later I met Mrs. Accountant and married her at age 23. I asked serious questions of myself back then and also of my new bride. We discovered our values when it came to work, children, spending, and retirement.
By age 30 Mrs. Accountant fully retired. Our first child entered the world. It was important for mom to raise our daughter. It was through questions that we understood our values regarding children. Both my daughters spent the majority of their time with their parents rather than a daycare provider.
My values regarding my children were different from Mrs. Accountant. I enjoyed the kids much more when they got older. Eat, shit, and repeat never appealed to me. Cute never offset the reality. Still, I bonded with my girls. I held them, talked to them, and even changed the occasional diaper. Once the girls started walking I was all-in. Now we can play games and communicate! I kiss my girls, all three of them, every day and tell them I love them. My values differed from Mrs. Accountant, but were still of the same thought when it came to loving our children.
The same conversation early in our marriage revealed another value. Whereas, Mrs. Accountant is totally content at home with the girls, reading, playing in the garden, etcetera, I am not. For twenty years now I have promised I am going to retire, a real retirement where you sit around all day. I can’t stand it! I tried. I really did. It got so bad I started countdown clocks to help me prepare for the day I lost my work family. It did not work.
I gave up on countdown clocks. Questions allowed me to understand who I really am. I am a father, husband, and business owner. I am also the happiest person I know. Every breath is a pleasure. There are probably groups out there for sick people like me. I imagine the first meeting would go something like this:
I stand: “Hello, my name is Keith and I am a workaholic.”
The group in unison: “Hello, Keith.”
I continue: “Sitting around in this room jawboning is irritating. So, if any of you have a tax issue, or a business idea, or an investment question, I will stay as long as necessary to help you solve the issue.”
I sit. The room face palms while shaking their heads.
Was it something I said?