As in the “Automatic Millionaire” book, this book started out working on the Latte factor and Double Latte factor. I guess he’s not getting the spokesperson job from Starbucks. It’s true that there are many frivolous spendings people do just to “spoil” oneself. For me, it’s the “joy” of being alive. Well, I don’t do latte and I only drink coffee of the day so my savings is not that much. I did manage to cut out my “fruit” salad from my lunch, saving me ~$4/day. Instead, I brought my own fruits, which costs < $1. That's roughly $3/day or $750/yr or $43K in 20 years, assuming 10% APR. Not bad. The next few chapters are for the credit card slaves who are up to their necks on credit card debts. This section is not particular interesting to me. There is some tips about paying mortgage biweekly or paying 10% extra per mortgage payment or add an extra payment every year. Budgeting doesn’t work. Make it automatic and pay yourself first: I long ago realized the budgeting is simply waste of time and try to do things manually simply don’t work well. These days, there are many on-line tools to automate the payments. It’s a waste of time not to take advantage of it.

Investment strategy: Bach suggests that all investment should be in 3 equal shares in real estates (including the equity of your home), bonds, and stocks. Try to balance the investment in all 3 areas. Investment should be “boring” and your life should be exciting, according to Bach.

Getting extra income: I waited a while to see how much the author is going to get everyone to save and not offer ideas to increase the income. I was not disappointed. His advise about getting a raise was enlightening. As a manager, I have never seen any employee coming to me asking for a raise, nor have I done it myself. But the question he asks, “Ask yourself or your boss if he/she would hire you now.” Wow, that’s a difficult question to ask oneself. It’s true that an excellent employee worths many times the “good” employees. And indeed, good employees are the worst kind because they are not bad enough to fire and not excellent enough to take on additional responsibilities. He also suggested using eBay to sell your goods.

Franchising: May be good for people who can manage and follow the rules. He suggested several good tips like: have some money to tie over, talk to people who already own the franchise, work at the franchise to see behind the counter, buy an existing franchise by asking the existing franchisee if they want to sell, and catch the growth curve.

The most expensive time is the hours you get paid for. This is another shocking statement for people who are making ends meet. In other words, if you’re getting paid by the hours, you’re not maximizing your worth. You should be leveraging your assets and talents to multiply your earnings.

Owning your home. Your home is an asset. Contrary to what Rich Dad said, your home is your asset. David Bach did not go into some long winged arguments but make it clear that for most people it’s the best investment you’ll ever make and the equity you build up is going to feed you in your old age. I agree with him. Not everyone is cut out to be a landlord and wanted to deal with finicky tenants.

Be a dream creator. Giving back by tithing.David Bach made it clear that getting rich is not the ultimate goal but the wealth created choices and freedom and ability to give back. Go and enable others’ dreams. Good point.

Teach your kids to start early and finish rich.Start them early and teach them about the basic financial wisdom from this book so they can start early and finish richer (than we).

Live in the joy. “When was the last time you had joy?” Be happy and do the things that make you happy. Having the financial freedom can make that happen.

I like this book more than the previous books. David Bach has reached certain level of maturity and acquired more wisdom. Of course, he would not consider buying his books or joining his membership a double-latte factor. Would he?

This book is a tell-all book about an economist, John Perkins, who used his profession to cook up the growth projection on engineering projects so US engineering firm, like Maine, can put the 3rd-world country in deep debt (loaned by IMF) to US that they would need to give concession to US demands. According to the author, this was the early stage of how US extends its global empire. Later, there were oil-rich countries like Saudi Arabia, and Shah of Iran, who didn’t need to borrow but US still offers “protection” in exchange for profitable engineering projects for US contracting firm.

This books reads like a James Bond scripts. It has all the money, greed, sex, conspiracy, bad-boy-turn-good elements. Whether this is true, which I believe the majority are, this book answers a lot of my questions in my mind.

Why the 3rd world countries hate us so much? Because we went the economic hit men into their countries and hi-jack their natural resources and enslave them to be subservient to US, the global empire. He went into great details about how he started his job in Indonesia and went on to Panama, Iran, Saudi Arabia, Ecuador, Columbia, and others. He dove into great details about the Panama strong man, Omar Torrijos, who stood up to US (Jimmy Carter) to negotiate the Panama treaty that returned the canal back to Panama and how and why he was allegedly assassinated by CIA because of his stand.

Why we went to war with Iraq? Because Saddam didn’t want to play the game with US to allow US to handcuff him to US policy. The Bush administration is full of people from the oil firms, contractors, engineering firms that would benefit from invading Iraq so they can get their pound of flesh. And US also needs another oil ally from Saudi Arabia to crack the Opec’s grip.

John Perkins compares the modern “corporatocracy” to the British empire back in the 18th century. We are now applying the same behavior/strategy to the 3rd world countries as British had done to US, in the same of capitalism but no less than a outright economic imperialism. This makes other hate us and envy us at the same time.

The fight between Amazon indigenous people and the oil companies who stole the land from them highlighted the greed and anti-environment stands of the oil companies. By continuing to consume the largest share of the oil in the world, we American are perpetuating the bad corporate behavior while jeopardizing the rain forest, the environment, and the survival of the people who live on the land.

Writing this book is probably therapeutic and self-serving to him, allowing him to rid himself of the guilt of being part of the “system” that rape other countries’ natural resources and enslave their people so they would never become self sufficient. On the other hand, I’m suspicious of the “facts” presented in the book. But I applaud his courage in revealing the dirty little secrets.

The author also reminds us that we may be working unintentionally to extend the global empire. Watch out for the corporate policy that you work for and the products you buy from. Cut down our oil consumption. Know the potential consequences of our actions.

Overall, this is a great audio book. Mr. Perkins is a good writer and story teller. I learned quite a few things about how the US political system and world politics work. Some of South America history was very enlightening. I always had doubts about the motivations behind some of the US’ policy toward certain countries. This book answered a lot of my questions.

I happened to come across the audio version of the “The Old Man and the Sea” while browsing in the library. The book was short and sweet. Donald Sutherland narrated the entire book. He sounded like the old man with all the emotions, sometimes upbeat, and sometimes sad and despaired. Unfortunately, the words were sometimes hard to resolve in the noisy environment in the car.

The old man, Santiago, had gone 84 days without catching a fish. The boy, the old man’s apprentice, was told by his parents not to fish with the old man because of the aura of the bad luck. Then he went out to the ocean and caught the biggest marlin no one had ever seen. He struggled with the fish to reel him in for several days. When he eventually did, the sharks had a better part of the big fish and the old man came home empty handed.

Symbolically, the big fish was like the old man, enjoying the good long, strong life at the top of the food chain until the fate eventually caught on to him to be caught by the old man and met his death. The fish was calm and gracious/classy, putting up 3 days of fight without showing any kind of panic. Ironically, the old man felt really bad about ending the fish’s life but justified his death by enriching other village people’s life and his with this big fish. Of course, the plan did not work out as sharks had all pecked away the flesh of the fish by the time he returned to the shore. The old man fought gallantly off the sharks and killed a few sharks throughout the trip home. At times apologetically to the fish and at times feeling sorry for himself, the old man finally succumbs to the fatigue and sadly to the defeat. The old man lost a piece of himself, pride and humanity, in the entire journey.

The boy showed tremendous loyalty and respect to the old man in the entire story. The innocence of the boy was the comfort and the pride of the old man – his legacy.

From the art of the war angle, spending all your effort and resource to defeat a major competitor may be the worst thing that could happen. Because it may invite other competitors (like sharks) to come in the market and peck away your profit. Our MBA lesson on Coke vs. Pepsi is exactly that. Duopoly is a huge stabling factor in a mature market.

This story also taught me something about getting old gracefully. Having respect for life and understanding your limitation go a long way.

Al Gore, following his success of “An Inconvenient Truth,” fired another warning shot to the American people that our way of democracy has fallen far away from the original intents of our Founders. There are lots of things that are going wrong that we may not be aware of. If we don’t do something about it, it may be too late for this generation and our future generations. Professor Gore kept going back to the American and foreign history, citing numerous precedences and evidences to reinforce his arguments.

My main take-aways:
1. Attack on TV Journalism. TV’s are to sell advertising; reasons are set aside. Political candidates can now “manufacture consents” by promoting his/her ideas on TV and/or influence what’s covered on TV, in other words, manipulating journalism like by having fake White House correspondents. Honestly, I don’t watch that much TV but I can imagine if people do spend 4+ hrs a day on the average, it can be a powerful influence. Of course, Al Gore did offer Internet as away to counter the force, provided we can keep the Internet from being tainted by false assertions.

2. Bush administration is “bad” and the main culprit in the assault on reason. He even equated George W. Bush to Nixon, having little tolerance for health/open debates and focus on concentrating power on the executive branch. Bush fabricated the evidences of Saddam Husein’s buying nuclear materials to make Nuclear bomb – weapons of massive destruction. The Bush administration used the Iraq war to benefit the oil industry lobbyists, while damaging the principles of this country in front of the international community and jeopardizing our military personnels by going against the Geneva Convention in the treatment of the “unlawful combatants.” He even cited a historical lesson of how Roman lost their democracy after Caesar marched in to Rome, against the Roman Laws made by the Senate.

3. This is a good civic class on how US democracy was born and the considerations given by the founders to preserve the check and balance. He emphasized that we are a country ruled by laws not people. The lack of written communication, due to TV, may serve as catalyst to deviate from the laws, fundamentally given in and interpreted from written words.

4. Democracy is fragile. Too much power concentration on the executive branch is a hazard. We could be in a long Iraq war and war against terrorism that may tilt the power to the executive branch for a very long time, jeopardizing the check and balance from the legislature and the justice branches. Citing Benjamin Franklin’s words when asked about the United States being a republic or an empire. He replied, ” a republic, if we can keep it.”

5. Legislature needs to have good debates. Most of the critical legislations are not being debated because senators/representatives are mostly absent – too busy raising funds for their own elections. He proposed to have TV coverage on debates so we can all make sure we understands all the pros and cons of each legislation piece. This is a good idea except no TV producers of the right mind would produce them due to lack of advertising.

6. Environment protection. Not only Bush administration went to the Iraq war for the wrong reason, Bush immediately dropped all the environmental protection clauses for the benefits of his political supporter. He mentioned a few things that’s already covered in his “an inconvenient truth” video, like the weather pattern change resulting in Katrina and potentially more refugees from the rise of sea level. Do we the courage to do the sensible/reasonable things? The era of consequences is upon us.

This book can be cut shorter by not taking on the Bush administration solely and by highlighting all the great things the Clinton/Gore administration has done. It’s a bit self glorifying – lose some credibility there. Also, Gore went to a lot of details about how the brains are vulnerable to the TV’s brain washing – as least he didn’t claim that he invented it like he did with Internet. 🙂

Overall, it’s not a bad book. I learned a few civic lessons about America and why our way of life may be very fragile if we don’t pay attention to protect it from the tyranny of the concentrated power in one particular branch because our lack of reasons. Perhaps, someday this book can be used to teach civics in schools. Hopefully, it’s not something we regretted haven’t heeded.

This is the 3rd book by Frank McCourt following his 1st successful story, Angela’s Ashes. I have yet to read that book. Frank McCourt’s strong Irish accent was hard to understand in the beginning of the audio book but I eventually got used to it. In this book, he talks about his 30-year career as a high-school teacher in New York’s public school, plus his marriage failure and his failed attempt to obtain his PhD degree. There is a lot of stories about his battles against 5 classes of 35 students each day and how he needs to be on top of his game in order to survive. In essence, this book is about an underdog’s personal failings, survival, and success story. The stories are at times sad, shocking, touching, but mostly funny.

There is this story about his taking the teacher oral exam and when he was asked how he would reinforce a creative writing lesson. His answered, “write a suicide notes,” almost got him kicked out of the exam room. But clearly there was someone that saw through his talents and his unorthodox teaching style. He passed the exam, of course.

The dynamics he has in his classroom varies quite a bit. Early in the book, he talked of how he picked up and ate a sandwich that one of his students threw at him. In a way, he puts himself in the same level as the students to gain their trust and that created quite a stir in the school. Often times, he was distracted by students’ constant requests for more stories from him and he often obliged. This created conflicts between his teaching style and what the school expected of him. As a result, he went from one school to the next early in his career.

His teaching style reminded me so much of my high-school “Health Education” teacher in Taiwan. As a student, I always looked forward to listening her stories and still remembered a lot of her stories to this day because she delivered the teaching with stories wrapped around it that made them meaningful to me. Story telling is a skill that is often under-rated.

One of his unorthodox teaching assignments includes writing excuse notes for the students themselves, famous characters like Hitler. This assignment absolutely captivated the students and made it meaningful for them because it’s something they’ll need for the rest of their lives. The other interesting class assignment involves reciting and signing recipes from cook books. Wow, I can simply picture the smiles in the kids’ faces.

McCourt is more interested in how people feel about a poetry or any piece of writing. It’s not about saying the right answers so you can go to college and move ahead. It’s more about appreciating the impact the authors’ writings have on the readers. After all, writing is about communicating with impact.

In several of the open school nights with parents, he spoke of parents battling each other and took up on him. But this story really touched me as a parent. He claimed that throughout his career, there was only one time a mother asked him whether her child was enjoying himself and that was only question she had for him. As a parent, we often don’t think of school as a place of enlightening our children so they can be a happy person throughout his/her life. Instead, we think of it more of a transition place where our children need to take knowledge from so he/she can eventually be happy making lots of money later in life.

He told of this student, a Korean kid with overbearing parents who worked day and night at a flower shop just to give him the best education. He chose Stanford University over Harvard and MIT just to stay away from his parents. When he was asked by his English teacher at Stanford about his favorite poem, he said “Papa’s Waltz” and he broke down and cried and cried. This was the poem they discussed in his high school class with McCourt:

The whiskey on your breath
Could make a small boy dizzy;
But I hung on like death:
Such waltzing was not easy.

We romped until the pans
Slid from the kitchen shelf;
My mother’s countenance
Could not unfrown itself.

The hand that held my wrist
Was battered on one knuckle;
At every step you missed
My right ear scraped a buckle.

You beat time on my head
With a palm caked hard by dirt,
Then waltzed me off to bed
Still clinging to your shirt.

We often neglect how much influence our teachers have on our lives and claim all the credits as our own in our successes. This book drives home the impact our teachers have on our lives and the sacrifices they make. To all the teachers in my life, I thank you from the bottom of my heart.

John Naisbitt wrote a pretty decent book called “Megatrend” in the early ’80’s. In his late life, he’s trying capture the mindsets that allow him to see the trend and future. The author went into 11 mind sets and 5 projected future states.

Mindsets:
1. Most Things Remain Constant: His caution is to avoid getting carried away with seeing temporary trends as permanent changes.

2. The Future Is Embedded In The Present. You only need to see the “sky” above you. You can’t see the forest for the trees and watch out for the fads that come and go.

3. Focus On The Score Of The Game. Look at the actual measures. Politicians and newsmakers try to bend our perspectives away from what’s happening. The key numbers tell the real story. For example, it was first global cooling and then global warming. What is it? Look at the data. “It’s the nature of human beings to bend information in the direction of desired conclusions.” How true!

4. Understand How Powerful It Is Not To Have To Be Right. Massive failures follow those who blindly follow a doctrine. “But only if I don’t have to be right can I imagine anything, suggesting anything.”

5. See The Future As A Picture Puzzle. Assemble your perspective by seeing how a variety of current trends fit together – not just a straight line. Einstein put together all the pieces (readily proven theories) together to formulate his theory of relativity.

6. Don’t Get So Far Ahead Of The Parade That They Don’t Know You Are In It. Don’t project ahead of what people can appreciate: otherwise, the new perspective adds no value. For example, Charles Darwin waited until the last minute to challenge God and reveal his “Origin of Species” after building up his reputation as a Geologist.

7. Resistance To Change Falls For Benefits. People will change to gain improvements, for example, shooting basketball with one hand. It’s easy to overestimate resistance, in particular, to new technology that requires us to change our habits. I think iPod is a good example, people don’t mind less direct control of the button as long as the MP3 player is elegant enough for you to carry around and don’t make you look geeky.

8. Things That We Expect To Happen Always Happen More Slowly. Remember the forecasts of everyone owning a car-plane in the 1950s? We should be all using them by now. Nestle’s Nespresso machine was used as an example. It was founded in 1986 and has just started to catch on. I don’t know if this is a good example, because I had not heard of Nespresso and I don’t think I would buy one.

9. You Don’t Get Results By Solving Problems, but by exploiting opportunities. The examples are Fedex’s Fred Smith and Dreyers Ice Cream’s T. Gary Rogers. I’m not sure you don’t get results by solving problems. Some of the best opportunities in existing problems. I think what the author was trying to say that one must think outside of the box.

10. Don’t Add Unless You Subtract. This is a practice similar to a professional sports team. The roster of team is usually fixed at a number. I like this mindset the best among all. In today’s ever-increasing complex work and family life, pruning things can add greatly to the quality of the output or life.

11. Consider The Ecology Of Technology. Evaluate technology in terms of the nontechnical constraints. The author suggested we put more “poets” than computer in our school. He’s arguing for more balance between arts and technology. “Technology is a great enabler, but only when in balance with needs and skills and our human nature… When a new technology is introduced, make it a rule to ask: What will be enhanced? What will be diminished? What will be replaced? What new opportunities does it present?”

In Part II, the author proceeded to frame the pictures of the future:

1. Videos, attractive designs, use of color, and visual imagery are replacing the written word as a key influence. For example, the slow death of newspaper is a convincing point.

2. From nation-states to economic domains. Industries are organizing globally for supply, distribution, and production rather than by nation.

3. China’s economic growth will continue, to be followed by political freedom. The nation will become a global design and branding base, rather than just a source of low-cost production labor.

4. Europe will experience slow growth (mutually assured decline), burdened with below-replacement birth rates, tough policies against immigration, and high social welfare costs.

5. The importance of new technologies will slow down while the application of technologies developed in recent years will accelerate. Although he doesn’t directly say it, biotechnology and nanotechnology are immensely slow methods of invention.

Overall, the abridged audio book was a easy listen, perhaps too easy that I had to borrow the book and catch up with some of this points. The mindsets generally make sense but not extraordinary. I guess it doesn’t take a genius to figure the future out. I also agree with the future states he painted. On the other hand, I was hoping for some controversial future states…

I read this book after reading the “Black Swan” book that was written after the success of this book, hoping to get more insight of his arguments. I was greatly disappointed, as most of the points were discussed already in “Black Swan.”

Early in the book, he told a story of Nero and John, who live next to each other. Nero is the conservative, constantly-hedging trader (not very rich) and John is the lucky, temporarily rich fools who traded high-yield bond and were on the winning/awarding streak until the market collapsed. The morale of the story: don’t think all rich people are smart – they may have been lucky and it ain’t over until it’s over (Solon’s or Yogi Bera’s advise). This may sound like sour grape but it has some truth to it. The same argument can be applied to the heroes or national leaders we worship. Are they truly that good or they happen to be at the right place at the right time. As the Chinese saying goes, it’s the era that makes the heroes.

Taleb assailed the reports for blowing things out of proportion like mad cow disease (killing hundreds) as opposed to car accidents (killing hundred thousands). The sensationalism of journalism can “divert empathy toward wrong causes, sacrificing cancer or malnutrition or other worthy causes. He concluded that journalism may be the “greatest plague we face today – as the world becomes more and more complicated and our minds are trained for more and more simplification.” I noticed this trend as well. Less and less people want to spend the time to think. “Just tell me what to do.”

Taleb mentioned many times in the book the use of Monte Carlo simulation. I was amazed how he could apply Monte Carlo to historical events and see how history might have been changed. He highlighted that there are many historical paths that were never played out and we are obsessed with only one of the historical path within a very short time horizon. He also touched on the possibility that due to randomness evolution may be fooled by randomness. In other words, not all species within a short time horizon are fittest (like John in his example), they may be just lucky enough to face no environmental obstacles. In the long run, these species will be wiped out. Is homosapien one of these species?

The author elaborated that why the statisticians are not good at predicting the future: 1) rare samples may not be included in the samples due to its rarity, 2) the population is constantly changing due to people’s rational behavior in reacting to changes (like having a mischievous boy keep adding/removing balls from the bottom of the urn while you’re sampling balls from the top of the urn). According to Taleb, “rare events are always unexpected, otherwise they would not occur.” He cites the examples of your “killer” neighbor that seems so courtly, reserved, the model of an excellent citizen until he shows up in the national newspaper. In other words, the past cannot predict the future. Sounds familiar?

On the problem of induction, Popper’s answers are there are two kinds of theories: 1) ones that are proved wrong (like Newtonian mechanics) and 2) ones that have yet to be proved wrong. No theories are ever right because we haven’t tested all the cases yet – time will tell. Our brain simply cannot handle all the random possibilities; we need to generalize and make inductive inferences. This is our human limitation. The best way is to take advantage of the statistical data in making bets but make sure you hedge your bets.

The “Millionaires next door” book suffers two major flaws, according to Taleb, 1) survivorship bias. All the interviewees were visible winners. What happened to those who practiced the same austerity and didn’t become a millionaire. 2) It ain’t over yet. Virtually all subjects enjoyed the asset appreciation. What if we have asset value crash? Watch out for the trading strategy of investing on “dogs” of the funds, as the theory of the strategy is deeply flawed in the survivorship bias – based on Taleb’s advise.

Speaking on superstitions, Taleb caught himself practicing superstitious acts after the taxicab driver dropped him off at the undesirable entrance to work and ended up having a profitable trading day the day before. “Our brains are simply not made to view things independent from each other… Our bias is simply to establish a casual link… For it is harder to act as one were ignorant than as if one were smart… We take things too seriously.” I guess one reason we are superstitious is that we want to know we’re in control, not a victim of circumstances.

People, even the best of them, are often fooled by randomness. The conservative Nero character beat the 28% chance of dying from cancer and vindicated himself of this trading strategy when all other Wall Street hotshots got poor, but he ended up dying from a helicopter crash he piloted. The “black swan” got his man.

Taleb labeled that most the corporation CEO are “empty suites” – just lucky (lucky decisions) and tall and charismatic and good at looking the part or playing “corporate politics.” “The higher up the corporate ladder, the lower the evidence of such contribution – The Inverse Rule.” To a certain extent, I agreed with him. This may explain why we had so many optional back-dating scandals and certainly Enron comes to mind. Perhaps due to the extreme luck factor, the CEOs’ salaries (or the jackpot) continue to rise – so the “expected” salary remains the same.

I like one of his afterthoughts: Randomness’ benefit – less stress. If all things are random (like subway schedule) and we all believe in them, we will most likely take things less seriously and subject ourselves to less strict schedule.

This book is a difficult read. Many times, I tried to stay awake to finish the chapters and eventually gave in to the boredom or his esoteric arguments, sometimes seem trivial. I had to read the book twice to capture the above essence from my perspectives. In a way, Taleb practices what he preaches – random thoughts.