The publicist clinched the deal when she mentioned that the chapter would be about bankruptcy. That's one area of personal finance that I never write about here on Lazy Man and Money. The idea is keep yourself out of situations where the b-word is mentioned. Still, for the purposes of being complete, it is something that should be covered. At the risk of angering PETA, this kills two birds with one stone, metaphorically one of my favorite things to do.

The chapter on bankruptcy was a little dry - which is to be expected. A chapter on bankruptcy isn't going to compete with Dancing With the Stars (unless you are dork like me). I don't know about you, but if I was facing bankruptcy, I'd put a high value on the information being valuable, not the entertainment value of the information. Here are a few of the points that David Bach covers:

• The best advice he has to those who may be considering bankruptcy - Here's a hint, seek professional advice early - do not wait. (He couldn't emphasize the importance of this more.)
• The two chapters of bankruptcy applicable to individuals - Chapter 7 and Chapter 13 - Most people identify bankruptcy with Chapter 7, a total declaration of being unable to repay. Fewer people know about Chapter 13, which allows for a more flexible repayment schedule.
• The factors to look at before applying for bankruptcy protection - Such factors include: how much you owe, your income, the types of debt, the assets you own, and what your future plans are for the next 5 years.

Much of the chapter focuses on the final point. However, I learned some really interesting things about bankruptcy such as how you can keep your multi-million dollar home in Florida and Texas. Just make sure you live there 3.5 years before you declare and make sure you talk to a lawyer. Perhaps a more relevant tip is that retirement accounts can be protected. This is no only yet another reason to max out your retirement contributions, but also a warning not to tap that money to pay down credit cards.

Finally, the chapter ends with Bach making some very important points. Briefly paraphrased, filing for bankruptcy doesn't make you a bad person. It can cause depression and it may be wise to seek council beyond a financial and legal. He makes a great point that bankruptcy is temporary and that it too will pass.

Best Book for New Grads?

For those of you who don't know Kimberly Palmer, she's a columnist for US News and World Report. In my world (which is admittedly focused on personal finance), she's the only reason that US News isn't another college rankings publication. You can catch up with her writing at US News' popular Alpha Consumer website.

The book is Generation Earn: The Young Professional's Guide to Spending, Investing, and Giving Back. The title is appropriate. It doesn't try to cover the entire area of personal finance. It doesn't cover questions like, "How do you know when you can safely retire?" The book focuses on just about everything that someone in their 20s and early 30s needs to know about personal finance.

The book is divided into three areas: Building Your Life, Creating a Home, and Changing the World. The Building Your Life covers the basics of budgeting, managing your career, understand credit and debt, investing, and getting a good start towards retirement. The Creating a Home section deals with all the personal finance question that come with family issues. You'll lending/receiving money from family, cheap dating, marriage, and planning for children. The last section, Changing the World, covers being environmentally friendly, making your investments match your personal ethics, giving to charity, and starting a non-profit.

Before I give my final thoughts, I should state some potential biases I have. Since Palmer covers personal finance and I cover personal finance our paths occasionally cross. That said, I'm a particularly difficult person to please when it comes to personal finance books. I've been reading Money Magazine for "fun" (yes, I'm weird) since I was 13. I've been blogging about personal finance for 4.5 years. It is a tall task to keep me interested in a personal finance book. Plus, I'm a little biased against books. John Lennon said it best: "All You Need is Blogs." They seem to suit my attention span best.

I found myself, time and again, nudging my wife saying, read this paragraph or read this page. There were just a number of times where I remember having this exact discussion with her in the past. If I could pry the Sookie Stackhouse / True Blood books from her hands, perhaps I can get this on her radar.

It's sad, but one of the biggest criticisms I had was on page 17, where Kimberly Palmer devoted almost a half page to praising wine with screw caps... while that's great, there are a number of ways to save money on wine. However, she makes up for it with a great tip on how to make homemade hummus, something that I found to a good cash savings.

The best part of the book was also the most unexpected. On area that is grossly under-covered in this space, and in the personal finance area in general, is the section on Changing the World. It always takes a backseat to the personal finance basics. It was quite a welcome surprise, especially considering where I am with my life right now. Maybe I'm having a third-life crisis or something, but I've been thinking more and more about how I'm going to make a difference in the world. I hope that Lazy Man and Money has helped a few (especially those who are victims of a MonaVie scam), but I'm feeling like I'm not doing enough. I've been spending a lot of time over the last couple of months putting a plan together that will hopefully allow me to do more.

Sometimes people ask me what is the perfect gift for a new grad. I'm putting Generation Earn at the top of that list. For more reviews an information about the book, check out the official Generation Earn website.

So it was little surprise when last year for Christmas, that I opened up a gift and saw his most recent book, What the Dog Saw. What was surprising is that my dog somehow went to the Barnes and Noble, got it on a discount, and signed the car. (Perhaps he got a little help from my wife.)

Typically, I only read books on vacation. They are good by the pool or in an airplane. The rest of the time, I've got the web to keep me entertained. After 10 months of sitting on the shelf, our trip to Aruba got this book into action. As expected, it was another masterpiece by Gladwell. Usually, I don't review books. It takes a lot longer to go through 350 pages and write 3200 words on the topic. However, I really think everyone should read this book and this review may convince you of that.

This book isn't like his other books. It is a compilation of articles that he has written for The New Yorker over the last 14 years. There isn't really any new material. It's as if I just put together a bunch of blog posts about how to save money and made a book (perhaps something you'll see someday in electronic version). What the Dog Saw is divided into three parts. I'll go through each chapter, set it up a bit, and say a little bit about what I learned in it. (Feel free to skip around, I wouldn't have the patience to read it all myself)

1. Obsessives, Pioneers, and Other Varieties of Minor Genius
• The Pitchman - Ron Popeil and the Conquest of the American Kitchen

  The story of Ron Popeil is more interesting that I imagined. You probably know him for the Ronco Showtime Rotisserie and the famous saying of "Set it and forget it." While it is clear that he is quite the salesman, I didn't know that it ran in the family... and that he'd been doing it long before informercials made him famous. I learned quite a bit about how to sell a product and also about Popeil's obsession with testing his product until it is perfect. Just reading this chapter made me think that I need to pick up a few Ronco products.

• - Mustard Now Comes in Dozens of Varieties. Why Has Ketchup Stayed the Same?

  Turns out that ketchup is fairly unique. It hits all five fundamental tastes. Basic mustard, on the other hand, doesn't. So you get a variety for people who like things a little more sweet or a little more salty. Turns out that there are 36 kinds of Ragu spaghetti sauce because people's palates are so different, but when it comes to ketchup - it is pretty much the same. I also learned that umami is a taste. Next time I'm a dinner party, I'm going to try the "Ohh, there's so much umami, I'm overwhelmed with joy." ...or maybe not.

• Blowing Up - How Nassim Taleb Turned the Inevitabiility of Disaster into an Investment Strategy

  This is probably on of the more topic stories for this website. However, it is also one of the more complex ones to tell as it involves options trading. The idea is that Nassim Taleb realized that financial disaster is inevitable. His interesting investment strategy involves buying options that almost always expire worthlessly. However, when events like September 11 happen or the financial crisis that we saw in 2008-2009, he makes big money. If you think about it, it kind of makes sense. Disaster can cut major market indexes in half really in a span of a few days. However, you never see the opposite and see good news boost the major indexes to double their previous levels in a short time.

• True Colors - Hair Dye and the Hidden History of the Postwar America

  Gladwell does what he does best... take something like hair dye and make it interesting (and not like I tried). In the 1950's it was very taboo for women to dye their hair. Shirley Polykoff made Clairol famous with the pitch, "Does she or doesn't she? Only her hairdresser knows for sure." The pitch was tied in with mother-daughter activities to make it seem normal aiming for the girl-next door types. In 1973, L'Oreal's Preference struck it big with the famous "Because I'm worth it" campaign. That was geared towards career-oriented women (and you see it with the women used to pitched the product from Cybill Shepherd from Moonlighting and Heather Locklear in Melrose Place). In short, you can see how hair dye pitches changed with the times.

  Today, the two companies still have ties back to their original message, but it's much more tempered. The advertising is starting to converge.

• John Rock's Error - What the Inventor of the Birth Control Pill Didn't know about Women's Health

  When John Rock invented the birth control pill his idea was to come up with a natural contraceptive. As a practicing Catholic, he figured that it would be accepted by the church as the hormones were natural. The church didn't agree. However, it turns out that the pill may help with breast cancer. Thus it can be seen as a way of saving lives, not preventing them.

• What the Dog Saw - Cesar Millan and the Movements of Mastery

  This chapter is very much a lesson in the importance of non-verbal communication. Dogs are amazingly good at detecting human cues... better than chimpanzees (who are smarter than dogs). When a dance-movement psychotherapist, Suzi Tortora, looks at Cesar Millan, a dog trainer, she notices that he is a master of non-verbal communication. He has subconsciously become an expert in how to talk to your dog.

2. Theories, Predictions, and Diagnoses
• Open Secrets - Enron, Intelligence, and the Perils of Too Much Information

  National security expert Gregory Treverton has makes a case for their being a difference between a puzzle and a mystery. A puzzle is something that can be solved. For example, the United States is trying to figure out the puzzle of Osama bin Laden's location. If given enough intelligence about the problem, the puzzle can be more easily solved. Mysteries are different. Trying to figure out if someone is going to crash a plane into a building on September 11 is more of a mystery. Given more information, the mystery can be harder to solve. It's almost like trying to predict the winner of a football game. More statistics give you, well, more statistics.

  Gladwell makes a good case in that this is exactly what happened with Enron. While everything they were doing was in the open, you had to read some 3 million pages of information to dig through all the business entities and the relationships that were set up. Enron got away with what they were doing for a long time. In perhaps a nod to an earlier Gladwell book, Blink: The Power of Thinking Without Thinking, a group of Cornell University students looked at the financial ratios of Enron and came to the conclusion that there were questions with its business model and that it may be manipulating earnings. Mystery solved.

• Million-Dollar Murray - Why Problems like Homelessness May Be Easier to Solve than to Manage

  This was perhaps my favorite chapter in the book. Murray is Reno's homeless town drunk... but a lovable one like a Michael Clarke Duncan in The Green Mile sort of way. He was on a first name basis with the police and hospital workers because every night he ended up in one of those places. When he dies, the city realized that cost them a million dollars in hospital bills and police expenses. It would have been cheaper to just give him a home and pay someone to watch him (he was a productive member of society when he was supervised).

  So that's what some people proposed, give the problem drunks some housing and some structure to save the people money. It turns out that it works too. It solves 80% of the homeless problem (roughly). However, how do you tell other homeless that they just haven't caused enough problems to get a free ride yet? That's a social issue that is very, very complex... perhaps unsolvable.

• The Picture Problem - Mammography, Air Power, and the Limits of Looking

  Gladwell explains that mammograms are difficult to interpret. You can get 5 experts to say 5 different things sometimes. Satellite photos have the same issue. That's why someone may say that they see a truck moving a weapon of mass destruction when it could be oil truck or a fire truck.

• Something Borrowed - Should a Charge of Plagiarism Ruin Your Life?

  This was a unique chapter, because Gladwell actually plays a role in the story instead of just reporting it. A Broadway play, Frozen, is written about the life of a forensic investigator. The forensic investigator sees the play and realizes that the play is based on her memoir. Obviously upset, she lawyers up. In the process it turns out that the person who made the play stole words from Gladwell's own review of the forensic investigator. Turns out that the playwright had been quoted years before the plagiarism that she borrowed from the forensic investigator's life. So the playwright was only stealing a few of Gladwell's words

  Gladwell explores the difference between the playwright using a few of his sentences and a musician sampling a few notes of music. Interesting, but I didn't learn too much.

• Connecting the Dots - The Paradoxes of Intelligence Reform

  This was my least favorite chapter. It is a bit like the chapter on too much information that I mentioned earlier. When you gather intelligence, there are going to be a lot of false-positives. Deciding which intelligence is credible and which is not, is extremely difficult. So when something like September 11th happens, you can look back in hindsight and make sense of the intelligence... but the intelligence was vague enough to apply to many things.

• The Art of Failure - Why Some People Choke and Others Panic

  When you get to be an expert at something, you tend to stop thinking about the lower-level details on how to do it. For instance, I'm a pretty decent Wii Tennis player, but when I was learning, I had to think about every swing. Now I just react without thinking. Years ago, Chuck Knoblauch of the New York Yankees had a problem where he'd through the ball into the stands... even on very basic plays he's made thousands of times before high school. This is choking... and it happens to athletes when their "react" fails and they have to start thinking. Then they have to resort to doing something they haven't had to do in years... and failure happens.

  Gladwell argues that panic is different. He points out that in a panic, people stop thinking clearly. They could be expert pilots or scuba divers, and have a very obvious solution right in front of them. However, panic has clouded their ability to see the solution.

• Blowup - What can be Blamed for a Disaster like the Challenger Explosion? No one, and We'd Better Get Used to It.

  Complex systems fail. You can have all the safeguards in the world, but you disaster inevitably happens. As you can imagine this chapter fits well with Blowing Up above as Nassim Taleb investing philosophy is that disaster inevitably happens. Sadly, Gladwell didn't tie these two stories together as they seemed like a natural fit.

3. Personality, Character, and Intelligence
• Late Bloomers - Why Do We Equate Genius with Precocity

  Gladwell explores two types of geniuses... the ones who are instant geniuses and the ones who fail quite a bit before finally succeeding. He finds that those late blooming geniuses had a lot of support from people behind the scenes. How many geniuses have we lost because these people didn't have proper support?

• Most Likely to Succeed - How Do We Hire When We Can't Tell Who's Right for the Job

  How is a football quarterback like a teacher? You can't tell if you have a good one until you put them to the test. A quarterback could be great in college and fail at the professional level and vice-versa. Football teams pass up the Tom Brady's and draft the JaMarcus Russell's early. A teacher can have a lot of education and not necessarily be a good teacher.

• Dangerous Minds - Criminal Profiling Made Easy

  Turns out that criminal profilers are all scammers. Or at least that's Gladwell's case. They use a set of ambiguity tricks similar to psychics. Apparently you just need to pick up The Full Facts Book of Cold Reading and start practicing.

• The Talent Myth - Are Smart People Overrated?

  Gladwell looks at the difference between a few companies. Some, like Enron, hired the smartest people available and let them do what they want. If they wanted to create a new division, go for it. There's too much trust in these people who have shown "talent" in the climb to the top. In contrast you have the Southwest Airlines of the world. They hire very few of the brightest MBAs. Instead their organization structure is more sound.

• The New-Boy Network - What Do Job Interviews Really Tell Us?

  This is another nod back to his Blink book. It turns out that many people make hiring decisions in the first minute. It seems job interviewers are dogs and we need be like Cesar Millan with the non-verbal cues.

• Troublemakers - What Pit Bulls Can Teach Us About Crime

  Not all pit bulls are killers. You can usually predict when they'll attack by looking at the circumstances around the attack. The owner is often neglectful. The dogs are properly socialized. They aren't neutered. A small boy was teasing the dog. There are a bunch of warning signs we can look for. Turns out that in the past Huskies, German Shepherds, Akitas, and Dobermans, all have history of biting. Rarely a day goes by where I don't exchange a nice pat with one of these dogs at the dog park. The lesson is that it isn't necessary the type of dog.

  The same is true about crime. We can't look at young Arab or young Pakistani and make a generalization that they could be a pit bull. Instead, you want to look at the specifics and see if a person is behaving nervous, if their paperwork is off, if something is unusual about their physical appearance. Once airport security stopped looking at the type of people and more at the behavior of people, their success rate went up.

One of the biggest advantages of this book is that it's only 133 pages... and large type font. Despite being a slow reader, I could have probably finished it in an hour and a half if I wasn't watching the Bruins' game. With it being so short, Mr. Holt has to get to his point and move on... my attention span thanks him for that.

As for the contents of the book, I found myself agreeing with about 60% of the book's advice. The other 40%, are things that I wouldn't necessarily say is bad advice, but maybe not targeted at my philosophy of personal finance. All that said, I could see it as a gift to a student graduating college - it's a good starter on personal finance. If you go that route (and you might not be able to since I see you can't buy it on Amazon at the time of this writing), please direct them to this post. I have alternative viewpoints on 20% of the book. Here are some examples:

• Nobody Wants a Million Dollars - This is, of course, the title of the book. The idea behind this is tha if everyone really wanted a million dollars, they could do it by living extremely frugally and working 16 hour days. It's not that no one wants a million dollars, it's just that people have different priorities. Anyone who reads this website knows I surely do. Holt agrees with this. However, the idea that No Wants a Million Dollars in the context of working all the time seems like an overly exaggerated premise to start with.
• Needs vs. Wants - Holt disagrees with the idea of "paying yourself first" when it comes to saving. He believes in covering the basic needs (shelter, food, clothing, etc.) first (Not to be confused with a mansion, great steaks, and fine suits). I think that's an assumption in "paying yourself first." If we have to tell people to do the things that keep them alive, I think our society has failed. With that assumption in place, "paying yourself first" in the context of saving for the future makes great sense.
• Spending - Dan Holt seems to rely very highly on budgets. He checks his purchases to see if they are in the budget. That works for him. I "try to budget in my head" (as he puts it), but I succeed. He always sticks to his pre-determined buying plan when going into a store - even giving himself a speech to reaffirm that if necessary. I allow for the flexibility of picking up useful non-perishable items when they are on sale.
• The $21,000 Savings on a Car with a No Debt Plan - One of my biggest issues with the book was the comparison of a "Debt Plan" and "No Debt Plan."
  • Debt Plan - The plan of living with debt is someone putting $5,000 down to buy a new (2007 at the time) $35,000 car at a 7.25% interest rate... thus paying $40,855 after 5 years (I've reduced the math details for brevity).
  • No Debt Plan - The plan of avoiding debt is someone buying a used car for $5,000. That opens one up to use the payments they would have made on the new car to save money. After three years of saving, the person can buy the same 2007 car for $20,000 (and still have $4,300 left over).

  The problem that I have with this is that the person with the No Debt Plan isn't getting an equivalent product. That person is getting two previously used cars instead of the new car that he/she set out for. It turns out that most of the $21,000 in savings from the No Debt Plan, comes from buying a product that deprecates extremely fast after that depreciation. It should be called the Buy Depreciate Assets After They Depreciate Plan. It's one that could be used not only for cars, but also for technology products (as long as you don't like new technology features).

In the end the biggest problem I have about this book is that it assumes the reader has a lack of self-discipline. Dan Holt admits to having problems with credit and getting in debt in the past and I think that's where his view comes from. He advocates using cash as a means of self-control (you can't spend what you don't have). When it comes to paying off your credit card each month he wishes you "Good luck" and further says, "you may be lucky enough to pay it off every month, but is it worth the risk?" Paying off your credit card balance each month has nothing to do with luck, it has to do with being disciplined in your spending. And yes the rewards of using my grandfathered 5% cash back card on groceries, gas and drugstores is worth it. It doesn't hurt that I get another 3% back on office supply, home improvement, and restaurants with another card. These rewards add up to hundreds (maybe even more than a thousand) a year for me.

As long as you can control the opportunity, I think it's worth trying to maximize everything you can to get ahead. I would include stacking up rewards.

• I Hate Books - I'd like to blame Ethan Frome for my hated of books, but the truth is that it probably started long before that. I have a pretty short attention span the Internet and blogs especially play to that. In fact, if you'd ask me what books are worth reading off the top of my head I'd go with How To Win Friends and Influence People, Fantastic Voyage: Live Long Enough to Live Forever (please spend the $5.42 that Amazon is charging for this book - seriously! The title is outrageous, but it's a really good book), Everything by Malcolm Gladwell, The Catcher in the Rye, and The Great Gatsby. This book joins that elite list.
• I Cross the Frugal Line to Cheap Sometimes - I was waiting on this book through Paperback Swap since it came out. When a book is really good and is worth re-reading multiple times, people don't want to give it up. Finally, when I got close to the top of the list, my wife decided to just pay the $15 (or whatever it was) and get it for me for Christmas.

Having finished the book, one of the things I can say is "wow." It's where I was trying to take this website when I set out. The reason I created this website is that I realized that my girlfriend (and now my wife) was going to retire at age 44 due to 20 years of service with the military. At that time, she'd might want to enjoy life in way that a regular 9-5 worker couldn't. So I created this website to explore ideas on how to avoid the working the next 35 years. At the time, I had no idea that this website wasn't just the question on how to do that, but it may also evolve into the answer.

As you can imagine Tim Ferriss and his 4-hour Work Week strives to get to the same place... earn a very good income with limited "work", thus giving you the freedom to do the things you want to do. I found myself agreeing with Tim Ferriss on almost everything he said, except that he used the word "lazy" in a negative context almost every time. I like to think that he'd choose a different word if he was a software engineer (see lazy evaluation).

His book and this blog cover a number of similar things. (Before I get started on them I think this blog was started well before his book was published, but some of his ideas were published before this blog.) Here are some examples:

• Pareto Principle (80/20 rule) - See my About Page. It's the first item I listed.
• Parkinson's Law - While I mention time (as Mr. Ferriss does), and space, I also applied this to dealing with money - Are Your Resources Swallowed Up By Parkinson's Law?. You might have heard of it under the term "lifestyle inflation."
• Wasting Time Trying to be Too Perfect - I covered that here: The Enemy of Good in Entrepreneurism. In reality it's the other 20/80 not covered in the Pareto Principle.
• Speed Reading - The book gave some tips to read quickly (a great set of tips in about a single page). I need to re-read those tips and practice them as I named reading slow one of Three Reasons I Will Never Be Rich. I mentioned how slow I read again in my 2008 goals. I also put it on my short list of tips on How To Be Successful.
• Hiring a Virtual Assistant - I mentioned How to Find a Virtual Assistant, and Why Hire a Virtual Assistant , previously. Tim Ferriss spends a chapter or two going in great detail.
• How To Negotiate - Okay, I failed here, I have about 600 bookmarked websites on how to negotiate and from what I can tell I haven't written about it. I think it's because that's always been on my wish list to learn.

So you may be asking right now, "Why do I need to get 4-hour Work Week when I can read this blog?" The short answer is that Tim distills all that information (and much, much more) into a book that most people can read in a couple of days. I really can't do the book justice in just a few hundred words - . This blog rambles a lot about things you might not care about (i.e. my life). Though you may like this blog a bit more because it follows a person's journey to implement the ideas in the book (even if I didn't know the ideas were in the book).

Again, I recommend very, very few books, so if you have been on the fence on whether you should buy 4-Hour Workweek. I say, "do it!" I wish I had done so a couple of years ago.

Secrets of a Stingy Scoundrel

I started reading the book minutes after Delta Airlines put me in a bad mood. As I got through the first few pages, I started thinking of how stupid it is. I didn't care for the section of home remedies... and I'm not even sure if they are remedies or things Villarreal made up. Then the next page, he writes about his college friend Smiley, which just seemed irrelevant to me. I realized I was reading the book for the wrong reason. I was hoping to get real personal finance insight from it, rather than entertainment. You don't want watch Pauly Shore expecting to come out smarter than when you in. Once, I got my mind in the right place, the book was much better.

The Good

There were a few great tips. Before I get into a couple of my favorites, I want to start out by saying that at least 95% of what Villarreal suggests is either immoral or illegal. So instead of "great" tips, think more "thought-provoking."

• Netflix Switaroo - Got a scratched DVD? Order the same DVD on Netflix and stick them with the scratched version keeping the nice one for yourself. Also good for upgrading to the latest remastered versions of movies.
• Waiter Tipping - Why base your tip on percentage of the bill. Villarreal makes the point that a waiter has to do the same work to bring you a salad or a steak - one shouldn't garner more tip.
• Great One-Liners Such As... - "I see no purpose in buying random trinkets, for people I'd never buy stuff for under normal circumstances, in exchange for random trinkets bought by people who would never buy stuff for me under normal circumstances.

The Bad

Really there were only two bad parts to this book:

• As previously mentioned, the book really stretches moral and sometimes legal grounds to the point of not being a personal finance book.
• Villarreal has to update his tastes in adult web sites. One website that he mentioned was a college friends' favorite over 10 years ago. Not that I ever went there... or would know anything about that.

I did find a couple of problems with the concept of the book. Mr. Villarreal bills himself out as the cheapest SOB on the planet. Page 1 should have started with him telling the reader to not buy the book and instead read it in the library or borrow it, right? I guess he conveniently missed that one. The book is also printed on glossy paper with color photos and rounded pages. A real Stingy Scoundrel would put it on course pages, sans photos, with pages that give you at least papercuts every time you pick it up.

I'd also like to add another tip. Start a personal finance blog so that authors of books will send you books to review for free. If the book seems interesting, read it and review it. If not, throw it on Ebay for some quick cash. The author will lose a sale, but it's not a big deal. He/She is selling so many books that one more won't make a difference. The publishers are the ones who make the majority of the money of the book anyway. Mr. Villarreal will surely approve of you getting weeks of his sugar-mellow cereal milk from the sale.

The world works in mysterious ways. A couple of weeks after I returned from my trip I received an e-mail from the publisher of his most recent book. They offered to send me a free copy. Suckers! They just lost a sale. So I need to convince two readers to buy Malcolm Gladwell's Outliers, so that they come ahead. Don't worry, I'm not keeping track.

What is Outliers about? It's a study of success. What does it take to be successful? How do you get to be the best of the best? Let's look at it chapter by chapter.

The Matthew Effect

Malcolm Gladwell doesn't usually give chapters the most logical names. In this case it's named after a passage, Matthew 25:29... something that I read roughly 12 times and can't figure out what it means. Fortunately, it doesn't matter to understand what Gladwell is trying to say. After reading enough of his books you realize his writing is usually the form of a story or study and a lesson that can be extrapoloated from that.

The first chapter focuses around the seemingly statistical anomaly that the best young Canadian hockey players are almost all born in January. You almost never find a top hockey player born in the last quarter of the year. The explanation turns out to be that that the age cut-off is December 31st. Someone born in January is going to have 10 months of development/practice more than someone born in October. The better players get extra coaching as they are seen as having the best chance at being a star someday. This has a snowball effect. The best players get grouped together in better leagues. The high-level of competition makes each player even better. Lesson: Timing can be critical to an outlier's success.

My thoughts: Think about it as it may relate to an educational system. It's pretty much the same way, right? I don't remember if Gladwell went down that road, but my mind did while ready this.

The 10,000-Hour Rule

This chapter depicts the life stories of some very successful people and how they got that way. Gladwell explains that the Beatles played 10,000 hours in Hamburg, Germany (watch Backbeat for a good movie about the Beatles at this time). He also explains that Bill Joy (founder of Sun Microsystems) and Bill Gates had put in their 10,000 hours of computer work as well. The perception is that they were born with some kind of gift. It's true that they were extremely talented, but most people ignore the fact that they had opportunity. Other bands may have been as talented as the Beatles, but they didn't have the clubs Hamburg that made them play all day. Other people may have had the talent of Joy and Gates, but access to computers in their time was extremely limited. Gladwell looks at some of the richest people in history and finds that they often clustered around a certain event. There's a cluster of richest people around the industrial revolution. There's another cluster of computer entrepenuers around people born in the mid 1955's. That put you on target to be age 20 when computers were just getting off the ground. Lesson: Outliers have the opportunity and put in the work to be the best of the best.

My thoughts: I'd rather not put in 10,000 of "work" to be the best. I have too many other things that I want to accomplish. Fortunately, I don't consider blogging to be "work." While I'm not quite at my 10,000 hours of blogging/writing, I'm probably upwords of 7,000. I'll be testing Gladwell soon.

The Trouble with Geniuses, Part I

Gladwell spends this chapter showing that a high IQ is not a ticket for a free ride on the success train. He goes to show that once you reach a certain IQ, you are just as likely as to be successful as someone with a much higher IQ score. There are other factors that may come into play, such as creativity. Give two children a test of how many ways a brick could be used and you'll find that even if they have the same IQ score, one may come up with a pile more uses than the other. Lesson: High intelligence as measured by IQ tests do not necessarily lead to success.

My thoughts: I guess I should stop carrying around my Mensa card from 2000. Perhaps this is why people exercise all parts of their brains. Note to self: pick up that guitar again.

The Trouble with Geniuses, Part II

In this chapter, Gladwell uses examples of two geniuses who grew up in vastly different environments. It's very anecdotal, one gets the feeling that the two people are chosen specifically because they are polar opposites. One can still see the point that one raised in wealth and opportunity is more likely to be successful than one raised in poverty. The other point this chapter pushed was that social skills may be the difference in success between two people of high intelligence. Of course social skills are often related to the environment in which one is raised. Lesson: If you want to be successful, be born to a wealthy family and work on your social skills.

My thoughts: None of this hits me as unusual or shocking like many of Gladwell other observations. This is the start of where the book begins to go downhill a little for me. However at this point, I've already deemed a great book and anything else I've learned is gravy.

The Three Lessons of Joe Flom

Joe Flom was a lawyer in New York City whose success started in the mid 1950s. The three lessons are:

• Have the right culture - Flom was Jewish and Gladwell makes a strong argument that it played a role in getting him in the right place at the right time.
• Have demographic luck - Being a lawyer in New York City in the mid 1950s presented one with an opportunity that a lawyer might not have in Bozeman, Montana in 1910.
• Have the right family history - Gladwell shows that entrepenuers like clothing makers often had children that were lawyers and doctors.

My thoughts: I think this is very much a summary of points that were made previously. The importance of family history was covered in the past chapter. The importance of demographic luck was covered in the 10,000 rule with Bill Gates and Bill Joy. As for having the right culture, I think that overlaps the family history in quite a few ways.

Harlan, Kentucky

Remember the Hatfield and McCoys? That's the kind of culture that you have in Harlan, Kentucky. People have to fight to protect their land and income. If you don't defend yourself, someone will think you are weak and steal it. Even though this isn't the case today, the descendants of that kind of society still exhibit its traits. This is another example of how one is a product of demographics, culture, upbringing, etc. The only new thing this adds is that it persists for generations.

My thoughts: Overall this chapter was a little long to prove what seemed to be a simple point (unless I missed something). Gladwell doesn't always concern himself with solutions to some of the problems brought up by his findings. However, it would be nice to feel that your potential success doesn't rely on the environment of your great grandfather.

The Ethnic Theory of Plane Crashes

It's the late 90's and Korean Airlines is in trouble - there are statistically far too many crashes. The planes are not of poor quality. It's the people and the process. It turns out that the Korean culture is that the person with higher authority should not be questioned. If a co-pilot sees a problem, he uses language that tends to point the pilot in the right direction, so that he can "think of it himself." Where an American co-pilot might say, "We are dangerously low on fuel", a Korean might have said something like, "This plane is flying light." The submissive nature in the Korean culture didn't allow for the balance check that co-pilot was supposed to provide. It would have been better if the co-pilot flew and the pilot directed him when he saw the need. Korean Airlines fixed the problem by changing the culture.

My thoughts: Overall I found this to be one of the strongest chapters in the book. I never new much about plane crashes. I thought they usually occured due to plane malfunction, but it seems to be human error most of the time. It was interesting to learn, once again, how culture can impact success - this way in a different way.

Rice Paddies and Math Tests

Is it a stereotype that Asians are good at math? Or is there something really behind it? It turns out that Asians are better at math. There are a couple of reasons for this. For one, many Asian languages have short, single-syllable numbers that are regular in format. English has irregularities like "thirteen" and "twenty" that must be learned as exceptions. The other is that taking care of rice paddies requires incredible discipline and attention to detail. These are qualities that may impact math skills in a positive way.

Marita's Bargain

Like most of Malcolm Gladwell's work, this chapter tells a story to illustrate some particular insight. The finding here is that students from low and middle class families regress in what they've learned during the summer break. Children of upper-class families seem to retain the knowledge from the previous year. The difference seems to be that the upper-class families encourage their children to learn more in the summertime. There's piano classes and computer camp - things like that.

My thoughts: I've always heard that the brain is a muscle like any other. It need exercise. I'm not sure if brain tissue really counts as muscle (I'm not up on my anatomy), but I'm willing to overlook technical details. It is a very good insight and one that parents could pick up a lot from.

Epilogue

I didn't find much, if any value in the epilogue. A lot of it was how the author himself is a product of many of these outlier conditions. It didn't seem to bring anything new to the table. I would have much rather read a summary of all the discoveries in the book.

Final Thoughts

I think this is a very worthwhile book. It shows the value that timing and culture play in the development of all of us. It helps me understand that being in Silicon Valley may give me opportunities that being in Kansas doesn't. If we have children, we'll move to Canada and time them to be born in January so that they can be great hockey stars. (Wait that doesn't seem, right...) We'll think a little about school systems and try to have an older child so that he gets a better chance to be more developed and get into the better classes. We'll teach the child Chinese and make him/her work in rice paddies to encourage the highest of math skills. (Hmmm, again, something seems out of place there...) We'll encourage learning over the summer break. I have to admit that I don't know the first thing about parenting, but it really has the wheels turning in my head.

The first few tips are about putting your mind in the right frame of mind - the power of positive thinking. I think you take it a little too far by leaving reminders like index cards around the house as suggested, but who am I to say. I once dated a girl who would write a letter to herself with a crayon... and repeatedly write it over and over again on the same piece of paper with more crayon. She said it worked it for her. I'm sure it did, but at the time all I could think of was, "Better to have a psycho girlfriend or a psycho ex-girlfriend... there's a sitcom idea in this somewhere." Anyway, back to the original topic, there's something to be said for being in the right frame of mind. It's good advice, but not revolutionary.

There are a variety of tips that I agree with:

• Prosper From What You Love to Do - I've been in jobs that I've hated. It was very hard to be successful when you are just thinking, "When can I get out of here?"
• Be Grateful for What You Have - I tend to think it's human nature to look at what we don't have as it helps us focus on getting them. However, we shouldn't forget to stop and reflect on what you do have.
• Start a Making Money Ideas Journal - I did this... you are reading it right now.
• Daily Productivity Goal - I have a list of things that I want to accomplish each day. Sometimes they are short-term (go to post office, buy groceries), but I always like to have one or two longer term items on there (outline that new blog idea, get 5-10 pages of that eBook written).

And then there are some that don't agree with:

• Expect unexpected income - The rest of the context sounds like he means "look for alternative income sources." I could see people getting in a lot of trouble with the way it's worded. "I bought the new Ferrari, because I was expecting an unexpected $100,000." Let's not even go into the conundrum of whether expected unexpected income really is unexpected anymore since you expect it.
• Always have Cash on You - I fundamentally agree with this, but he says that he often recommends that people carry $1,000 in cash to have a prosperous mindset. I think it's going to suck that much more when you lose your wallet. Plus, to carry $1000 in cash you are going to have to have a pile of $20s (good luck on the back surgery from your bulging wallet) or you are going to have a pile of $100 bills that few places will accept if you need to actually buy something.
• Religious Overtones - There's a lot of mention of religiousness in the book. Some people are not very religious or don't believe in one particular religious book vs. another. I've still found these to people to be good people and often quite successful.

There are just a sample from the first 30 tips. I could go on, but it would be unfair to Matt Furey if I outlined all of them. I think these give you a good idea of the flavor of the book. From this rough analysis, I found that around 15% (4 of 30) are really good ideas and 10% (3 of 30) are things that I'd do differently. The other 75% is the type of mental affirmation stuff that I outlined in the 2nd paragraph (minus the weird ex-girlfriend rant). Perhaps it's the way it's organized into easily digestable tips, but I can almost imagine the information broken down into one really big blog post or a week of smaller ones.

In the end, there's no way a book about magnetizing money is going to give you the actional advice on making money - nor do I believe it should. Mr. Furey's book is $19.95 ($12.95 plus $7 in shipping and handling).

Why Didnt Anyone Teach Me This

It's not often that I do a book review. Though it seems that at least once a month some author's marketing team sends me a new book, I almost never get around to them. The biggest reason is that I'm an extremely slow reader and most books would take me 8 hours to read. If I then want to write about it, it's going to be another 2-3 hours of gather notes, thoughts, and coming up with something interesting read. (And as many people have noted time and again on this site, I don't spend the time to proofread).

When I found myself needing to see the doctor last week, I looked around for a book to take with me and David Newby's Why Didn't Anyone Teach Me This? seemed like a perfect fit (that link may not be the actual book, but it's mostly the same title from the same author, not sure why he added an extra word). It was 120 pages of big type - most people could probably read it in about an hour (or two hours if you are a slow reader like me).

I haven't had a book bring out such strong emotions from me in some time (again this might be due to the relatively few books I read). I felt the book sent conflicting messages. The conflicts start at the cover. I don't know if you can see the yellow star in the image, but it promises $3,197 in free bonuses with the purchase of the book. On the back cover it's the author leaning on his Lamborghini. The sales pitch is strong from the outset. However the rest of the cover is pretty friendly, some books and an apply that apply to the teaching metaphor in the title.

I think the best way to go through this book is to break it down in the good and the bad:

Good

• Length of Book - I mentioned this on the outset, but it's nice to pick up a nice short book and not have to invest a lot of time in it.
• Some Sound Financial Advice - (More on this later.)
• Charity - He mentions his favorite charity in the book and recommends giving to charity.
• Animals - No animals appear to have been harmed by the making of the book... unless you talk about tearing down the forest where they live for the paper. So umm, let's scratch this one from the list.

Bad

• Length of Book - While I like something short, in the end you aren't paying for a lot of original content or concepts. It's really only 100 pages if you take out the blank pages between chapters. Each page a big quote box on it from the reading (like you would find in a newspaper). Between the quote box and the large font, I counted one page at 130 words. For reference the opening paragraph to this post is 100 words. At the end of each chapter is a review and there's a three page spin on why he likes his charity. If you start trimming the fat, you could probably fit it in 30-40 pages of regular book type, and not change the content at all. If you wanted to edit the message a little, I could probably sum up the whole thing in one 500 word blog post. I may just try that in the future.
• Sales Pitch - There are a lot of scummy sales stuff in this book. The cover that mentions $3,197 in bonuses includes $3,000 in "coupons" for his "system" and seminars. Every time you think you are going to read something thought-provoking, you are left hanging as he tells you to look it up in another book or online class.
• Some Not-So-Sound Financial Advice - (More on this later.)

Good Financial tips in the book:

• Newby breaks down why many people won't be able to retire (people don't save enough).
• He writes about having a dream and identifying that dream (I replace "dream" with "goals" in my head, but mostly the same).
• Newby correctly states that few people have job security nowadays. His story about being a top performer at a company and getting laid off when the company got bought mirrors my own story. In fact it's the idea of wanting to "layoff-proof" myself that made me start Lazy Man and Money to explore ideas on how to become financially independent.
• He has solid tip about coming up with an idea and licensing it out. He's quick to say, "Don't by factories employ people and all that. Just sell the license to someone else who will do the manufacturing and distribution for you. If you have an invention, this seems like a fine way to go.
• Newby wisely points out that people who make more money often have lifestyle inflation and spend more money. This is why many people who get raises often are left back where they started - with no savings. He calls this "Perkin's Law" and defines it as "Expenses always rise to meet income." I wrote about this phenomenon before, but it's Parkinson's Law. I could find no record of Perkin's Law.
• He advocates saving, paying yourself first, paying down debt, even funding a "survival account" (i.e. emergency fund).
• Newby explains the rule of 72.
• He likes Roth IRAs (see below for more on this).

Bad Financial tips in the book:

• Newby goes into several pages of convincing you that you have to have change your thinking by developing a daily affirmation that invokes memories of Stuart Smalley. Of course if you think the daily affirmations are ridiculous, he might say that you are just not open-minded enough. I would use one his own arguments against him, "Do you think Donald Trump wakes up each day and tells himself these affirmations?"
• Newby recounts the story of his friend Bob who had to wait until his credit approved to buy properties. Meanwhile, he says that he bought 5 properties with "damaged credit." Remember Casey Serin? Also, it's worth noting David Newby doesn't tell you how he got the money to buy 5 properties and/or how heavily leveraged he was. Without more information, I'm inclined to believe he got lucky while Casey Serin was unlucky. This is hardly good financial information to pass on.
• He claims that if Oprah, Larry Ellison, or Bill Gates went broke tomorrow, they wouldn't stay broke because wealth attracts them and they have confidence. No... the reason why they wouldn't grow broke is that they are famous, have great brand awareness, and exceptional contacts to other rich/famous people. I've heard Oprah speak and she will be the first to tell you she didn't attract wealth at age 20. She didn't even try to.
• He talks about "Leverage Masters", a term for people who utilize other people's assets to make money for themselves. He doesn't explain how to become a leverage master... even in the section called "How to Become a Leverage Master." Instead he says to learn the ways of Leverage Masters and act on them.Wait, learn and act are the keys to being successful at almost anything. What do I need to learn, well that's the thing Newby doesn't tell you.
• He explains that there's a way to protect your assets so that you won't have to pay someone if they win a law suit against you... and they'd still have to pay taxes on the winnings. This is one of the most irresponsible things I've read in any book. I don't care if it's technically legal, it's immoral. By the way, we don't know if it's technically legal since he doesn't explain how it's possible in this book... you have to go sign up for one of his special reports.
• He says, "401Ks and IRAs are the WORST way to invest your money." Newby says that those instruments are tax-deferred which is not as good as the tax-FREE way to invest with Roth IRAs. He's clearly not the financial wiz as the difference between a 401K and a Roth IRA is when you pay the taxes. With a 401K, you get to invest a lot more at the beginning and watch it compound faster because it's pre-tax money. With Roth IRAs, you pay the taxes up-front which results in it not compounding as fast. In the end, as long as the tax rate is the same when you pay them, the investments come out to be the same.
• Newby advocates investing in Universal Indexed Life Insurance. This is taken directly from Doug Andrew's Missed Fortune
  . I read another Doug Andrew book that mentioned this method, but it was complex and involved a lot of fees. It may be right for some people, but I'd need to look into it more. Oh, and Newby mispells Andrew's name as Andrews... I bet Doug's not all that happy.
• The Biggie - He advocated investing in real-estate backed investments. He doesn't tell you what it is, except that it's average a 30% gain over the last 29 years. Yes it's hard to imagine any investment doing that over 29 years, but now that I think about it real estate has done well. Of course we've seen how it's dropping now. Wages aren't growing fast enough to support further growth in real estate, so this investment is ready for a collapse if it hasn't already. If you want to know more about this investment, you need to buy his "system" or seminars - which will likely set you back thousands (especially because he's giving out $1000 coupons).

So you can see that there is some definitely good financial advice in here. It just feels to me that he's using that as a way to earn trust to get you to spend the big bucks on his programs. Upon 30 seconds of finishing the book, I tried to think of a proper way to sum it up. Many people familiar with the story of Superman are also familiar with Bizarro, a character like Superman with his speed and strength, but also the opposite of him in many ways (he lived on cube-shaped earth and his speech is often oddly arranged "backwards" sentences). I think David Newby is Bizarro Lazy Man (or depending on your point of view, I'm Bizarro David Newby).

In the end, it's probably pretty obvious why Newby sells the book at TheCrapBook.com. I haven't seen a domain so aptly named in a long time.

If it's possible to learn from what many consider one of the worst books, imagine what you could learn from a good one. It is this premise that made me dig into Rich Dad, Poor Dad to come up with some useful things I learned. Because of this, I turn a blind eye toward Robert Kiyosaki inventing a few characters to tell a compelling story to get his point across. There are any number of myths and fables that entertain and teach us at the same time.

When I went through the book I came up with three ideas that I thought would help many with their personal finances.

Assets vs. Liabilities - The average American doesn't really think in terms of assets and liabilities. They tend to want the new iPod right now. There is little thought to paying interest. There is little thought to the accessories that you "need" with an iPod (case, car charger, FM transmitter, etc.). According to some, Mr. Kiyosaki takes things a little far by not including your home as an asset (if you own it), but in general he does a very good job of getting readings focused on buying things that make you more money rather than depreciating assets.

Know Your Taxes - Mr. Kiyosaki is big on hiring smart people if they can save or make you money. He says he has a very good tax advisor who saves him much more money than he is paid. Recently, I've been looking at my taxes and finding legal ways that I can minimize my taxes.

Have a Dream - Many people will say that Kiyosaki doesn't give a lot of concrete advice that the average person can use. I would agree with them. However, he is great at in convincing people to think about their money and how it can buy them freedom. This is a very good motivator to get people thinking. It made me think quite a bit and this website is the result of trying to find a way to organize those thoughts.

The next time you hear that a book is bad, it might be worth reading it anyway. Just like how everyone you meet can teach you something, many books can do the same.

I spent two hours reading the book from cover to cover. I actually had time to stop and return a few e-mails, turn down a low-ball offer from someone looking to buy this site, and optimize this site to load slightly faster. I also took notes along the way. And I'm a very, very, slow reader. I think the average reader could probably finish this book in an hour.

There were some thing that I didn't necessary agree with. That's not to say that they were wrong, it's just that I have a different viewpoint. It's worth noting that my view is clouded by the fact that I've never been in significant debt. Here are some of them:

• Budgeting - About 90% of the book is about budgeting. He makes a point that one who does not budget is probably broke (pg. 45). I know a lot of people that don't budget. I would be included in that group. I even wrote that you might not need a budget in the past.
• Dave Ramsey and Debt Snowball - I really hate to read about the "debt snowball." Why? Because Dave Ramsey is Bad at Math. If the math points me to a better of way of doing things that's what I do.
• The Message to Use Cash - For the intended audience, those in debt, this is a good message. However some people are able to get a free $500 for using a credit card. The key is to be in a position to pay off the card at the end of the month.
• Religion - The book got a little heavy on religion for my tastes. I've always thought that one's religious belief system should not be a factor in your financial freedom - unless your full-time vocation is religious in nature.
• Pickle Jar of Change - You know I'm getting picky when I bring this up. Joseph Sangl had a co-worker that used $5 bill each day on a vending machine at work. He pocketted the change and put it in a jar. When he cashed in the jar, he was debt-free. This was written as a positive story. I couldn't help but think how much the vending machine mark-up was. I imagine that he was spending over a dollar (or else he would use a dollar), which makes me think that he might have saved himself $150 a year if he just bought at a store and brought the product into work.

With those hard parts out of the way, here are the things that I loved:

• His Enthusiasm - In the conclusion, he wrote that he's poured himself into the book. He didn't need to write it because it came off of every word on every page.
• His Personal Story - You get a good view of Mr. Sangl's life. You understand where he came from,the obstacles he faced, and the solutions he found. This gives you complete picture on how you might be able to duplicate his success.
• Budgeting - While I put it in the above, this also fits down here. It's a very solid and thorough guide to budgeting.
• Housing Chart - On page 15 there's a great way to visualize mortgage payments. I can't tell you more without giving it away. You'll have to read the book.
• Dream Chart - He's got another chart on page 85 that I will call the dream chart. It's geared to getting out of debt, but I could see it useful for achieving any goal. For instance, I think I'll adapt it to my retirement goals.
• Planning and Protection - Sangl has some very good analogies on planning ahead and protecting yourself against emergencies

Though I've never heard Mr. Sangl speak in person, I imagine that his book is a great complement to the message of responsible finances that he's spreading.