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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Medi-Share is a low cost way to manage health care costs. As health insurance premiums continue to sky rocket, there is an alternative preserving the wealth of families all over America. Here is my review of Medi-Share and additional resources to bring health care under control in your household.
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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.
Plenty has been written about income and wealth inequality over the last decade. There is another inequality gap expanding even faster than that of income and wealth. The gap between the top 1% and the rest is growing rapidly in this area and it had a direct effect on income and wealth.
I call it intelligentsia. These people are the most educated or learned (there is a difference) and therefore control their ability to grow income and wealth at will. These hyper intelligent people also have greater political influence.
The intelligentsia are the other 1%. Nobody is complaining about their growing gap of knowledge. The reason for this is clear. Anybody who wants to grow their level of knowledge can with few barriers. Because personal responsibility is involved we will never see a rally or protest claiming people are not allowed to learn.
Do not confuse this with formal education. Formal education is expensive which is a serious barrier many people cannot overcome. The intelligentsia know a formal education is only a small part of knowledge and the influence it brings. Most colleges teach nothing about sound investing. As the owner of a tax practice I can assure you colleges are not churning out highly qualified tax professionals. These and other forms of knowledge require a personal commitment to learning.
Time to Get Schooled
The newsfeeds are filled with the plight of getting a college education. Costs are rocketing higher and student loan debt is blasting further into record territory daily. But formal education isn’t the problem, you are.
Sorry to be so blunt, but there is no other way to put it. The whining and complaining about college costs are unacceptable and do nothing to improve the situation.
College is important. Learning is even more important. If you can’t motivate yourself to learn without the stick of a professor threatening, you will never be part of the intelligentsia. Ever.
What you learn in college or technical school is only a fraction of what you need. Formalized education is more about the experience, the contacts, than about learning. Learning comes from outside the institution.
I know this is hard to grasp, but can you imagine Newton going to school to learn the things he discovered? Who taught Einstein about relativity? Who taught the Wealthy Accountant about taxes? It was the same person in each case. We taught ourselves.
Newton and Einstein had to learn and then build new knowledge and understanding from the base they had. Your favorite accountant took one tax class before going full-time. Of course, I read massive amounts of material in addition to that single class.
I have a secret. When I started my business I took the H&R Block tax course. That was the one course. It was something like 10 or 15 weeks where we met one night a week (maybe it was twice a week; it was a long time ago) for a few hours. That’s it. From there I kept growing. I read IRS publications. I attended continuing education classes before I had my enrolled agent license and was required to. I read every tax book in the library and bought more.
I went from dumbest to the intelligentsia of the tax community in a handful of years due to my massive indoctrination.
What about Contacts
The biggest benefit of formal education is the contacts you make. The classroom learning is available outside the institution in most cases. In some disciplines the professor requires you step off the campus to experience real world activities. It’s kind of hard to experience an archeology dig at a desk.
The cost of college is the textbooks. Having a professor preach to you from the book she probably wrote herself and requires for her class to drive sales is a waste of time. The professor then tests you to see if you have been paying attention and reading the additional material. If you are part of the intelligentsia you don’t need a professor prodding you; you can learn faster and better on your own. The classroom is slowing you down.
Formal education has one huge benefit only available from a group.
The intelligentsia is a small group of people, the 1% of knowledge holders, who stick together. College brings people together allowing these unique souls the opportunity to identify each other and share ideas. Is it any wonder managers of the largest businesses and political leaders draw their teams from people they met in college?
Contacts are more important than knowledge. (It hurts to say that.) It’s true. Who you know is more important than what you know. If you know the right people you are better off than knowing everything there is to know.
Without a formal education, without the advantage of a college campus, how can a budding intelligentsia acquire the contacts she needs to excel? The answer is simple: conferences.
Once formal education is completed the intelligentsia needs a way to stay in touch. If they are not part of your team you need a way to contact these people when the need arises.
One of the most common questions I get in my office is: Do you know anyone who . . . ? In many cases I do. Why is that?
I meet many highly advanced performers during the course of my day. Some I met during my short tenure attending college. (I have no degrees.) Many I met personally at a conference.
Conferences are like mini college courses. The training is intense; the learning environment ripe. I learned more at conferences than college ever taught me. Things never taught in the classroom are discussed over a cold one as the evening wears on at a conference.
How to Be Part of the Intelligentsia
The intelligentsia is an unassuming group. Rarely do you find someone excluded. Admission is simple; be an intellectual or highly educated.
How do you get this way? By standing on the outside drinking in all the knowledge until you qualify. It doesn’t take long either. When knowledge is flowing fast and furious your learning curve is steep. Soon you have something to add to the discussion. It is at this point you are a member of the intelligentsia whether you know it or not.
The next question is: Where do I find these conferences?
Before I tell you that I remind you a college education starts before you attend your first conference. You can buy or rent textbooks from Amazon. Books are the dues paid to become a member of the intelligentsia. Rare is the intelligensa (yes, I know I made up a word; would you prefer intelligencer?) who has no personal library.
Read. Read every day. Read stuff that nourishes the mind. Novels are fine for entertainment, but you are an intelligentsia neophyte. Your mind is fertile ground waiting for the seeds. Never allow such a fertile field to lay fallow!
Once your mind has been planted with vast tracts of knowledge it is time to meet your people. You could read the textbooks and wander the local college campus discussing the issues with those you find. Some colleges allow this; other might ask you to leave. It is an idea.
As your level of knowledge increases you want focused increases of knowledge. This requires a venue specific to your needs; you need to start attending conferences.
Conferences cost money. This is where your real education takes place. Conferences have classroom training coupled with massive socializing. What you learn in the classroom is only the conversation starter.
What is taught in the classroom continues afterwards. The presenter is frequently part of the discussion. The same thing can happen in college, but getting the professor to be one of the guys is unusual. At a conference the people you meet are people you can contact when the need arises. When you need a team member you have a pool of intelligent and experienced people to draw from.
Conferences are everywhere! I have never met a conference I didn’t like. It’s hard in the beginning for the newbie. Don’t worry. Walk right up and join the group. You’ll be one of the cult members in about thirty seconds flat. Don’t be shy. Do NOT waste the opportunity. To this day I have never witnessed anyone getting shot because they joined the conversation. (A few should have been.)
It is impossible for me to list every conference in every genre so let me give you an example you can extrapolate from.
Let’s use my profession, taxes/accounting, as a discussion point. If you want to attend a tax conference/seminar there are thousands to choose from. The AICPA is a good place to start. An internet search of your state CPA organization will have additional offerings. The National Association of Tax Professionals (NATP) has many basic tax courses to pick from too.
Once you attend a conference or a few seminars you will end up on a list. Then the opportunities will come to you. The difficult part is choosing which conferences and seminars to attend with your limited time resources.
The internet has made finding conferences matching your interests easier than ever. By joining the intelligentsia you are joining an elite group. The intelligentsia earn more and have more. For some reason the 1% of income earners and 1% of wealthiest people in our society also happen to be in the other 1% too: the intelligentsia.
By focusing on income inequality you miss the point. Focus on learning and knowledge and you will be a card carrying member of the intelligentsia. Your income will go up automatically as a result.
Now, if you will excuse me. I have a book with my name on it.
You can’t sit down with Bill Gates for more than 10 minutes before he starts telling you about a recent book he read. If you’re not lucky enough to chew the fat with Bill you can get an update on his reading recommendations anytime you want on his blog: Gates Notes.
Ryan Holiday actually has a free subscription service to inform his followers monthly of great books he has read and recommends. Over the years I have found many inspiring and mentally stimulating books from Holiday’s list.
Books are the foundation of knowledge. I read a lot because you will be hard pressed to find a successful individual who doesn’t read on a regular basis and because it is fun. Books have a special feel. Some people enjoy Kindle versions; I still prefer holding a book in my hands. I might get my news digitally, but when I dive deep into a subject I want paper in my hands even if I have to lug it through an airport. It’s just me.
Outside family, books have provided my greatest pleasures in life. I have traveled the world and through time; I have seen great societies and dined with the greatest minds of history. I did it all through the eyes of those who were there. Books have given me all that and more. You are free as long as you can crack a book and disappear into another realm.
It’s time again for me to share some of my enlightened reading. I prefer massive books. I also enjoy books that delve deep into business, science, taxes, accounting, history and math. I am not sure there is a genre I don’t enjoy.
When I was younger I read thousands of novels. Not so much anymore. Most of my time is spent with my nose stuck in a heavily researched book. Take away my reading time and I get cranky. For me, reading books is as important as sleep and breathing and more important than food. I can go longer without food than a book.
I find new books to read in various places. The above mentioned Gates and Holiday have been a reliable source. Sometimes The Economist has a good recommendation. The news gives me books to add to my reading list, too. And now I want you to help grow my list.
Below I will share my reading recommendations for the summer. In return I want you to share some of your favorite reads. It doesn’t matter if you read it ages ago. A good book sticks with you and if it sticks, you should share.
I have starred (*) books I recommend for purchase. The remainder should be borrowed from the library. Starred books I feel most readers will return to again and again so it should be part of your personal library.
The time required to read the seven books on the list is 70 hours (assuming 10 hours per volume) or 10 weeks at an hour per day. You can buy all the starred books used at Amazon (or Kindle) for under $35 with Amazon Prime. A local used bookstore may bring an even greater bargain.
I read two magazines regularly. In the past I read many more periodicals, but most newspaper and magazine stories are online where I read them now.
National Geographic: I travel more than I care to. Most travel is business related and increasing due to this blog. However, I keep pace with the world at large by reading NG. The articles are not long, but contain powerful information. Written different than a news piece, NG writes from the perspective of a traveler on the ground. This allows me a glimpse into the lives of people from all corners of the world. Science and culture related articles interest me most, but I read NG cover to cover every issue.
The Economist: Most news reporting agencies leave me flat. The Economist is packed with news from around the world each week with numerous stories from the business world and the study of economics. You can read The Economist online, have the magazine delivered to your door, or both.
*The Snowball: Warren Buffett and the Business of Life by Alice Schroeder: The news media has plenty to say about Warren Buffett. You can watch interview after interview of him on YouTube and at the end of the day you are left wondering how he does it. Alice Schroeder (no relation to the author) spent years digging deep into the life of Buffett to give us an unblemished look at what makes Buffett Buffett. A short news piece is no match for 832 pages of journalism. Schroeder spent countless hours on the phone and in personal interviews with Buffett, his family and acquaintances. I warm you, this book is addicting; it is hard to turn out the lights when engaged in such a mesmerizing story. By the end you have a much better idea of how Buffett does it. There is no doubt in my mind your investing skills will improve by the time you turn the last page. These skills can be applied to your investment properties, business or side gig and equity investing.
A Confederacy of Dunces by John Kennedy Toole: Our first of two fiction entries is rollicking fun. Dunces introduces us to Ignatius J. Riley, a most intoxicating character if there ever was one. Riley is always scheming. His antics with ways to earn money in jobs and side gigs will have you rolling on the floor. But I warn you, Riley is an idiot extraordinaire. His relationship with family and employers will have your eyes glued to the page. Readers of this blog know the value of a side gig. Dunces teaches us how not to do it.
Business Adventures by John Brooks: When Bill Gates and Warren Buffett both say a book is the best business book ever written it might be worth the time to read it. Adventures is a collection of articles written by Brooks over his career investigating significant issues challenging businesses. Before the 1987 crash or 2008 financial crisis was stock crash of 1962. Brooks gives us a detailed look at what went wrong and what was done to prevent 1962 from becoming a 1987. Chapter 3 took a look at the federal tax code and its history. For some reason your favorite accountant couldn’t put the book down during that chapter. I also found the chapter on Xerox riveting. What sacrifices are made by a group of people to bring a company to life is inspiring. Note: These business stories are from the 1960s and therefore are dated. However, each story is as relevant today as it was 50 years ago.
It Can’t Happen Here by Sinclair Lewis: Before the current events caused Americans to doubt their government’s ability to lead there was the fear Nazi theology would usurp the White House. Lewis wrote his dystopian novel in 1935 as fear heightened over Hitler in Europe. The story follows Doremus Jessup, a small town newspaper editor, as Berzelius “Buzz” Windrip captures the imagination of the country. Windrip’s promises sound all too familiar today. Of course Windrip wins the presidency causing the country to spin down in violent authoritarianism. The novel does not offer a happy ending. Jessup and his ragtag compatriots build a movement to take the country back by using an underground network to publish the truth. People begin to fight back, but the cost is dear and the road back may never provide a full return. Perhaps Americans should also read The Decline and Fall of the Roman Empire too. Or a brief review on how the Roman Republic ended.
*The Wealth and Poverty of Nations: Why Some are so Rich and Some so Poor by David S. Landes: In The Wealth of Nations, published by Adam Smith in 1776, we learn about the division of labor and its effects on productivity and quality. (You can read The Wealth of Nations online for free here.) Smith also gave us a look at how money really works. Fast forward to 1998 and Landes picks up where Smith left off. No longer are we merely interested in how money works, but why some countries are rich and some poor. Several factors determine the wealth of a society. I’ll let you enjoy the process of learning as you read the book.
*The Simple Path to Wealth by JL Collins: There is a reason I am recommending this book again. Jim Collins has produced what I consider one of the best books on investing ever written. Taken from the pages of his blog, Wealth is pulled straight from his stock series. Before you jump ship on me, understand this book is not about pouring over stock sheets and financials searching for the next good investment. Instead, Collins’ approach is simple: simple to read, simple to follow. The writing is crisp, clean and to the point. This is the perfect book for the restroom (sorry Jim) or ride to work. Each chapter is self contained, yet part of the whole. I am certain you will read this book again and again as I have. I keep finding myself re-reading chapters as a reminder to keep it simple and safe if I want to grow and maintain my wealth. (If you want to read about how the author and Collins nearly took over the world, read here.)
* The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century by Walter Scheidel: Before we start I want to point out I recommend this book for purchase. Unless you plan on using the book for additional research you may wish to borrow the book from the library instead. The Great Leveler takes Piketty’s work a step further by looking back in history to determine where income inequality began, how it ended and reappeared in societies for millennia. This book is a surprising recount of income inequality in all societies since humans decided to leave the hunter/gatherer lifestyle. What I found most interesting was how similar the issues of income inequality are today with the same issue thousands of years ago. Hint: you are not going to like the four possible solutions history provided.
There it is, kind readers; my reading list to round out your summer. Pick and choose as your interests dictate.
Now it is your turn. I am always looking for good books to read. Share some of your favorites in the comments section below. Don’t leave a wayward accountant, a book lover, in the dark.
The cost of a college education has risen faster than inflation for so long the discussion can no longer center on what your major is in college, but whether you should even go at all. We have all heard the statistics on how much more you earn with a college degree which begs the question: How much do you need?
Outside medical, education has seen prices skyrocket more than any other category of spending. According to the College Board, tuition and fees for the 2015-16 school year for state residents of public colleges is $9,410. Out-of-state and private colleges are significantly higher. Add room and board and the cost for the school year is $19,548. Now toss in the cost of textbooks and living expenses and the cost of a college education is a major investment.
There are ways to decrease the cost of an education. Starting at a two-year college and living at home or renting your own apartment versus living on campus can lower the total cost. The one nonnegotiable item is the tuition fee. Scholarships and grants can reduce or even eliminate the cost of higher education except for the time investment.
When people hear me speak or watch me work in the office they come to the conclusion I must be highly educated. It is a surprise to them when I admit I have no college degrees. I don’t think I even have enough college credits (if I took the right classes) to qualify for an associate degree.
Education is defined by many people as the education you get in a classroom at a higher education institution. This is wrong! Even if you have a college degree, a large part of your learning came from outside the classroom. My life is no different. When I inform a group I have no college degrees it does not mean I am not educated! I have read more meaningful books in my life than 99% of the people in the country, including the college educated.
I take training courses like a sickness. Enrolled agents are required to have 24 hours of continuing education per years on average: no less than 16 per year and a minimum of 72 hours per three year cycle. This is the minimum to keep your license. I am not a minimum type of guy.
There are plenty of programs to help you prepare for the enrolled agent exam. I used a self-study course to prepare. For one summer I lived in that book. I wanted to learn as much as I could, not only for the exam, but to also help my clients. It went well beyond pride. I wanted to know this stuff. I wanted to digest and incorporate this material into my psyche. I wanted the answers to these tax questions to be automatic.
Am I Educated?
Knowing facts above, do you consider me educated? Let me ask this: If you get an IRS letter who do you think gives you the best chance for a positive outcome? A guy with a college degree or your friendly enrolled agent talking to you right now?
I consider myself educated. Learning never stops. A formal college education is only a foundation to build upon. If you stop pushing your education forward after they hand you your degree you are not educated, I don’t care what the piece of paper says hanging on the wall.
The real question is: Should I go to college? For most people the answer is no. You can start sending your hate mail to: firstname.lastname@example.org. Of course doctors and engineers must attend college. But does a plumber or tax guy need a degree? Instead of college, I recommend attending programs designed for your field of work. My experience getting an enrolled agent license is a perfect example. There are few good tax programs in college. Good tax guys don’t come out of university very often. A Master Plumber does not need a master’s degree from UW-Madison! And plumbers can earn a darn nice income. (So do tax guys, but keep that a secret; I don’t need competition.)
The Real Cost of a Formal Education
What more could Steve Jobs have done if he had completed his college degree? He attended classes he enjoyed and left the rest. Some classes he audited. It was about learning, not bragging about a piece of paper some claim means you are smart.
The real cost of an education is time. No matter how smart you are, no matter how many grants or scholarships you earn, you still invest the same amount of time as the schmuck sitting next to you in class paying for the whole thing in cash. And time is where the cost gets really high.
Working your way through college will keep the cost down. Putting living expenses on student loans is insane! I see it all the time. Education debt takes time to work off. It is time again. First you invest four years or more to earn a degree, then you need to find a job, then you need to make up lost ground while you were sitting in school. My biggest advantage attaining financial independence early was an early start. I had a job in high school (farming) and a job immediately after high school (working in my dad’s business and my nascent tax practice). Between life I found time for a handful of college classes. I had the college experience, kind of. I missed the parties and drinking part.
By the time all my high school buddies were finishing college I had a net worth of six figures and growing fast. They had student loans to pay and a job to find. I already had a job and an established business. I had a head start and made the most of it. The key was ambition. I am a self starter. Nobody holds a gun to my head to write the amount of material I do here. I do it because I want to. The same applied to my early days in business. I was always up to something, trying ideas, building my client list, learning how the real world works in business.
Necessary Formal Education
All this said I refuse to look down my nose at college educated colleagues. (Okay, there was that one time.) Some people need a formal education to help them decide a path in life. Some people learn better in a formal setting. And then there is all the self-serving BS required to get a BS. CPAs need 150 credit hours before they can sit for the CPA exam. (I might be off with this. I am pulling from the top of my head and since I am not a CPA I am light on the requirements. Feel free to correct me in the comments section below.)
Many professionals are required to have a minimum level of formal education to gain access to the herd. Attorneys, doctors, CPAs, and teachers fall into this group. If your career choice is in a field requiring a long education time investment you have no choice. A car mechanic is better served by attending a technical college or program geared toward their craft. By focusing your education on your trade you have an added risk. Additional knowledge is needed to function properly in any field. I recommend either self-study or short and intense seminars to build these additional skills. Example: I am attending a one-day grammar and proofreading seminar later this fall. Bet you are glad to hear that.
Some education is unavailable in a formal setting. Financial independence, early retirement, and intelligent investing are rarely part of the curriculum, but absolutely necessary to live your life well. By reading this blog you are gaining an education. No degrees when you finish, just a head full of knowledge shared by a tax guy with decades of experience. And isn’t that what education really is?
We learn by sharing knowledge. Once in a while a member of the herd discovers something new. Not often, but it happens. Then the knowledge is transmitted to peers for review. The whole group learns, becomes smarter.
My oldest daughter has struggled with college. She wanted to attend college all over the world on dad’s dime. She had no grants and not a single penny of scholarship money. The first test of college is getting there. Having someone else foot the bill teaches you nothing. You need to figure some things out for yourself. We all get there in time. The college classes I attended were paid for by the First National of Wallet.
Now my oldest is working. She is discovering what she really likes and wants from a career. In the end she will probably go to college; she wants to be a teacher; an honorable profession.
I come across strong against jumping right into college. That isn’t true. I am against a formal and expensive education until the student is ready. When the student is ready they will actually get an education along with that bill.
Whether you attend college or not, your education starts at birth and never stops until your last breath. Only a small fraction of your education will come from a classroom. Learning is a journey, not a destination.
In the course of a normal week I write three blogs, run an accounting practice, jog three hours, lift 3 hours, and read 3 or 4 books. I have thousands of books in my home and read countless more from the library. Some weeks I read fewer books, some weeks none at all, but I still spend plenty of time reading online and during the course of my work.
How can someone read so darn much while running a business and keeping his body fit? You smokin’ somethin’ WA? No, I am not smoking something. Besides, I always understood cocaine was supposed to keep you going until it burns you out and I don’t do that either. (Can you smoke cocaine?)
There is some truth about my sleep habits. During a normal week I sleep approximately 30-40 hours and meditate 10 hours. Meditation time can happen while walking or while sitting in a quiet room alone.
So let’s add up the numbers. There are 168 hours to a week the last time I checked. For arguments sake we will say I sleep 40 of those hours and meditate 10. I spend 40 hours dealing with issues in my tax practice and another 25 hours writing blog posts. Exercise takes another 10 hours (3 hours running; 3 hours lifting; 4 hours light aerobic). Mrs. Accountant and the junior accountants get 20 or so hours of my life each week. That leaves over twenty hours for reading and research. In fairness I sometimes read at the office (okay, I read a lot at the office).
There is one thing missing from my normal week compared to the average Americans’ life: TV. I watch limited amounts of TV and do not play video games or Pokémon. Any TV I watch is either background noise or educational videos. On rare occasion I will think through a problem while playing a mind numbing computer card game.
How the Wealthy Spend Their Time
Most weeks I do not finish four books. Over the course of a year I read 100-120 books, a bit over two books on average. Some weeks go by without any book completed. This week I drove a stake through The Fountains of Paradise, by: Arthur C. Clark; Meditations, by: Marcus Aurelius; The Fortress in Orion, by: Mike Resnick; and The Obstacle is the Way, by: Ryan Holiday. The remarkable thing about this week’s reading list is two novels are in the batch. Novels are less than 20% of the books I read and rarely for pleasure only. Novels I read generally illustrate a lesson I want to learn. For example: A Man in Full, by: Tom Wolfe is a great novel about Stoic living. A recent documentary mentioned a space elevator and The Fountains of Paradise, hence the addition to this week’s reading list.
Some books have more meaning than others. I have read Meditations online, but wanted a copy to take with me to read when I have a few minutes available. Meditations is the kind of book you read again and again. It is a short book, but takes time to read as each passage has meaning requiring reflection.
Therein lies a truth. There is a direct negative correlation between how much TV you watch per week and your income. The wealthiest people in our society watch modest amounts of television and what they do watch tends to be educational videos. Meaningful books are the one alternative to TV that will affect your income positively. What you learn from books has a direct application to real life.
The more books you read the more people think you are a speed reader. Nothing is further from the truth. I tend to read on the slow side and, with the exception of novels, go back a re-read some passages to fully digest the meaning. Where I get the volume of my reading in is during the 20 or so hours per week allotted to reading.
Those dead times in between tasks is also great for reading. Like Charlie Munger, sometimes people think I am a book with legs and arms sticking out.
Buy the Damn Book
A thousand or so books adorn my humble abode. My frugality is tested when books are involved. Many of the books I read I return to and review them again so owning them makes sense. There are times I read library books and later buy the book so I can return to it again and again at will. My vast reservoir of knowledge is not from some magical elixir. I know you want to be frugal, but knowledge is not where you practice frugality. I am into wealthy: wealth of knowledge and financially.
Books are cheap. Amazon sent me Meditations for $1, shipping included. I have Amazon Prime at the office so shipping is free. But come on. $1? I’ll wear Meditations out as I lug it everywhere reading passages at every opportunity. You read books like that again and again. Trust me, I’ll get my $1 out of that book.
The Meaning of Life
There is no other way to acquire the knowledge of the ages straight from the source other than books. Movies and videos cannot show you great men and women from past ages; they can only give an abridged and modified (to fit the format of television) version of the original. Stoics shared a wealth of knowledge from 2,000 years and more ago; I can hear their voices in the words they wrote. I can’t call Thomas Jefferson and jawbone ideas of polity; I can read the volumes he wrote. Even people still alive do not have time to tell everyone all the knowledge they wrote in books! Imagine all the stuff I share on this blog. If you stand around me long enough you will get a strong flavor of my beliefs, values, and ethics. But when you read this blog you get something more, plus you can return again and again reading and re-reading the information. It may sound strange, but I have to go back to my own work at times to relearn a lesson. Keeping all your knowledge front brain is not possible.
The other part of reading is travel. You can live in a hundred places in a thousand ages with books. You can travel strange new worlds and times all in one afternoon. You can be a child again or experience old age. You can join Viktor Frankl in the Nazi concentration camps without any risk. You can learn and experience with books.
Why Do I Read So Much?
This is a crazy question to my ears. How can you not read so much? Turn off social media and the idiot box and crack a book. Training videos can teach a lot, but nothing beats a good book. When I hear statistics like the average American does not read another meaningful book once they leave school I am perplexed. College is only a start, not an end game! Your education never ends. Only a small fraction of your education is formal and that is if you even attended college.
Every day you breathe. Every day you eat and drink to nourish the body. If you do not also feed your mind daily you will die just as fast as or faster than if you forgot to eat or breathe. I read so much because I am alive.
Charlie Munger, the right hand man of Warren Buffet at Berkshire Hathaway, is quoted as saying he never met any wise person who did not read a lot. Reading is how we learn about the world around us. We live better when we educate ourselves. Every year I read 20 – 30 books of substance and a handful of entertaining novels I think have a value lesson to teach. Reading is as important as breathing. Many of the greatest books I’ve read were introduced to me the same way you are being introduced to books here, from a blog.
This list is by no means comprehensive. Periodically I will add more posts with a list of books I feel are significant. Most of you have already read several books on this list. No surprise there; people interested in bettering themselves will discover these gems on a regular basis all on their own. There will be a few you have not heard of and now is your opportunity to add to your wealth of knowledge.
Most of these books are available at our favorite meeting place: the library. I recommend visiting your local library and picking up a few books from the list below and few additional nuggets you discover in the House of Knowledge. Some books are too good not to own; I understand. I have provided links for most of the books to Amazon.
The Power Broker: Robert Moses and the Fall of New York, by: Robert A. Caro
The story of Robert Moses, the greatest builder America ever saw, reveals how our modern world was created in the mind of a genius who never held public office, yet was one of the most powerful men to live in the 20th Century. This massive book will have you eagerly anticipating the fall of Robert Moses. His Machiavellian wielding of power crushed everyone who stood in his way, even Franklin D. Roosevelt. Moses finally gets his moment of humility. It is then the reader realizes how important Robert Moses was to our nation. Robert Moses knew how to get things done. His energy knew no limits. The reader is left wondering how this one man could do so much. The story of Robert Moses is motivating. Reading The Power Broker encourages us all to get out there and get things done.
The Millionaire Mind and The Millionaire Next Door: The Surprising Secrets of America’s Wealthy, by: Thomas J. Stanley
The veneer comes off the mythos surrounding millionaires when Thomas J. Stanley performs the most in-depth research on America’s wealthy. The illusion of fancy cars and big houses gives way to truth — the wealthy are actually boring. They save a massive percent of their income and invest; they marry and stay married; the wealthy live in average neighborhoods and live in normal homes; they drive reasonable cars; many made their wealthy by owning a business. The average American saves too little and spends too much on wasting assets like fancy cars. These two books are required reading for anyone interested in early retirement and building wealth.
America’s Cheapest Family Gets You Right On the Money: Your Guide to Living Better, Spending Less, and Cashing In On Your Dreams, by: Steve and Annette Economides
With a name like Economides they must be good with money. The lessons this large family shares about money are valuable for everyone. Spending less and enjoying life more are easy when you think about it. The Economides provide a simple roadmap to frugal living without resorting to coupon clipping or other such crazy time wasters. Learn how the Economides shop for groceries only once a month, spend $350, and feed a family of seven. You will need to invest in a freezer though.
Stocks for the Long Run, by: Jeremy J. Siegel
Here is everything you wanted to know about the stock market between two covers. Siegel provides more interesting facts and tidbits about the stock market than a baseball fan talking pitching stats. By looking back to the beginning of Wall Street, Siegel shows how the stock market has a smoother performance than appears when viewed close up. For example, the broad stock indexes average a 7% return over long periods of time. Too often investment advisors use 10% or higher in their illustrations creating a false sense of what the stock market will do. I keep this book on my shelf and pull it out whenever I am curious about anything stock market. There are so many interesting facts about stocks, but I would never trade on them. They are fun to read about, however.
The Intelligent Investor, by: Benjamin Graham
Warren Buffet is the best investor to have ever lived and he learned his investment skills from Ben Graham. The Intelligent Investor is an easier read than Security Analysis, Graham and Dodd’s earlier work. I understand most of you invest in index funds; so do I. Still, understanding what makes investing in stocks and bonds profitable is powerful knowledge. Managing a small percent of your portfolio in individual stocks successfully requires an understanding of what company makes a great investment. The same principles apply when buying a business to run or even in evaluating an investment property purchase.
Steve Jobs, by: Walter Isaacson
Several movies have been made over the last several years trying to capture the flavor of what made Steve Jobs, Steve Jobs. They fail for the most part. Isaacson allows us a look into Jobs’ life and what it was that made Steve Jobs the person he was. Like The Power Broker, this is a book about getting things done. A serious question we should all have is: What makes some people perform at such a high level? Many of the great business leaders do it in one lifetime. Steve Jobs started Apple in his garage and grew the company to the most profitable on the planet all within one lifetime cut short by cancer. Bill Gates and Warren Buffet also did it in one lifetime; neither was born into significant wealth; they earned it all in short period of time.
The list is short, but filled with so much good reading it will take you a while to work through the material. I started with a list of over 50 books and picked the handful I felt would be the best starting point. Browsing through Amazon will yield many more treasures. Don’t forget the library. Find the section of the library that holds the above mentioned books and examine the books surrounding them. You are sure to find buried treasure all along the shelf.