Ten Roads to Riches by Ken Fisher

The Ten Roads To Riches the Ways The Wealthy Got There (And How You Can Too) by Ken Fisher with Lara Hoffmans

This book outlines ten different ways to become rich; start a company, become a CEO, ride along with the CEO (Charlie Munger rode along with Warren Buffet), become famous, marry into wealth, become a plaintiffs lawyer (sue people), manage other peoples money, become a land barron, invent things (songs, patents, books, intellectual property), and manage your wealth slowly and frugally. There is a chapter on each road along with an introduction and conclusion. The book is not rocket science but it is entertaining.

Ken Fisher is one of the richest people, he is on the Forbes 400 list and manages $45 billion in investments. He wrote this book because "he likes to write", not because he needs to make money. He should know a little bit about becoming rich.

I like the combination of humor, irony, and straightforwardness in this book. Ken Fisher said he had his lawyers go through the book twice to make sure he would not be sued for libel. He reminds us that not every way which people get rich is appealing to many people, a lot of people hate stock brokers, distrust plaintiffs lawyers (modern day pirates), and think it is tacky to seek out rich people to marry.

Each chapter also includes a section on how to not break the law and still make money. Carly Fiorina and Bill Lerach are two examples of how not to do this.

At the end of many chapters there is a reading list. I found two books that I plan to read, The Ultimate Gift by Jim Stovall and Beyond Entrepreneurship by James C. Collins and William C. Lazier. There is also a short bulleted list of the basic first steps you need to take down each path.

This book is not complicated. It is methodical and straightforward. There are no secret formulas, no complex charts, and no incredible promises. It is so real at times that it becomes darkly humorous. I can recommend this book for people who are interested in building wealth. It is currently on the New York Times bestseller list.

Grow Your Money 101 Easy Tips To Plan, Save, and Invest-- Jonathan D. Pond, Review

Grow Your Money 101 Easy Tips to Plan, Save, and Invest by Jonathan D. Pond is an easy to follow investment advice book. The tips are understandable and seem to be common sense. I find myself agreeing with many of his statements.

For example, he says cars cost a lot of money and eat into a persons finances. One of the best ways to buy a car is to buy a vehicle that is four years old and keep it for at least four years. The only reason to buy a brand new car is if you plan to maintain it well and keep it for a very long time.

He claims that your number one investment is your career or business. If you have an hour to study investing in stocks or an hour to invest in improving your career, invest in your career, you will ultimately have more money to invest and save. He insists that you should take the time for any free courses you can get from your employer that create contacts and will allow you to move ahead.

I wish I could follow his advice on fixing minor leaks in a financial boat: bring your own coffee and muffin, bring your own lunch, eat at cheaper restaurants, don't buy lottery tickets, take public transit or carpool, and buy generic from your supermarket or drugstore. These make little differences that add up in the long run. I don't buy lottery tickets, buy generic, and take mass transit to work, so I am half way there.

I like the idea that "Getting Rich Is Rather Boring". Jonathan Pond insists you save and invest, and live below your means. This is the reverse process to keeping up with the Joneses.

He covers a lot of different financial situations that can arise, receiving a windfall, how to invest in retirement plans, what kind of debt is the best debt, and other topics. Financial instruments like stocks, bonds, certificates of deposit, treasury notes, real estates, and mutual funds are described in clear distinctive often witty ways. Jonathan Pond focuses mainly on how to diversify your investments across a wide variety of sources safely.

This book is a steady, practical, easy to understand book with apparently solid advice. If you are interested in better basic financial management, this book is well worth reading. I have always found it easier to invest in stocks than save. Hopefully, I will take some advice myself and buy a few certificates of deposit.

I think the book grew out of the Channel 13 program in New York. This is a link to several short videos from the program. http://www.thirteen.org/jonathanpond/index.html

Complete Idiots Guide To Socially Responsible Investing-- Ken Little Review

The Complete Idiot's Guide to Socially Responsible Investing Put Your Money Where Your Values Are, Penguin USA, c2008 is a very basic guide to socially responsible investing. Each chapter is a separate overview of a different subject in socially responsible investing.

The basic idea is that a person includes personal, ethical, religious, or moral values in their investment decisions. There are no standards set by SEC on this, nor is there certification required by brokers to determine whether or not a broker or mutual fund is truly socially responsible. It is up to the individual or the individuals advisers to determine if a stock, bond, or fund is telling the truth.

Socially responsible investing contrasts with the mainstream view that the only responsibility a corporation has to its shareholders is to make money for the shareholders. This is quickly changing with problems with globalization and environmental climate change. Business as usual is no longer the same. Detractors claim that socially responsible investing limit investors choices.

However, ethical choices are always limited. The main financial advantage which socially responsible investing gives is that it limits legal liability by investing in companies that have a good environmental record, positive labor relations, and positive community outreach. Often there is also a greater measure of "good will" towards companies with ethical business practices.

Another difference between the shareholder mentality and the socially responsible investor mentality is that the socially responsible investor is more likely to view themselves as a stakeholder in a company. This means they are more likely to use their proxy votes, examine corporate governance, CEO salary, and attempt to pressure corporate change.

Ecology is the main reason that I am interested in socially responsible investing. I look for companies that practice both sustainability and eco-efficiency. Eco-efficiency is the practice of reducing waste, increasing energy efficiency, and reducing material using. Short term, it costs additional money, but long term it reduces packaging costs, energy costs, and waste costs.

There are two types of screening for socially responsible investments, negative screening, and positive screening. Negative screening involves eliminating the option to invest in companies in four areas usually, social responsibility, tobacco and alcohol, the environment, and defense industries. Some people look for positive companies that impact these four areas as well.

The book unfortunately does not name specific companies with positive or negative screens. It is attempting to be neutral and not offend any specific company. On P.152 it gives an example of a recycling shareholder resolution for Apple computers.

There is a focus on mutual funds because a fund can screen many more stocks than an individual can. They also have the resources to look up and down the complete line of a company. This takes a lot of research. Because of this many Sociallly Responsible Investment funds have heavy loads.

This book covers all the different types of socially responsible investments. There are sections on community investment, venture capital investments, bonds, mutual funds, stocks, and other vehicles. A few interesting items mentioned were The Domini 400 Socially Responsible Index, and the ETF (exchange traded fund) Powershares, Wilderhill Clean Energy Portfolio.

The book does not list any individual stocks which is a disappointment. Nor does it make specific recommendations on mutual funds. There is a limited amount of places listed for finding information. A few of the websites listed are socialfunds.com, socialinvest.org, and responsibleinvesting.org . There is no bibliography for the book. However, there is a short list of resources, a few pages of glossary, and an index.

This book is a very basic guide to the subject. I learned enough to get a nice overview of what socially responsible investing was. However, I did not get many resources to help me with the process. I don't think this book will be very helpful to someone who already has a decent amount of experience with the subject. I also wish the author had not tried to be neutral. It would have been better if he was gung-ho and made many more positive recommendations.

Tax Day, Morning Thoughts

Today is tax day. Off I go to H&R Block. I have been using the same tax accountant for the last three years. I am not very good at figuring out taxes and investments. This is why I go. Maybe, it is because numbers don't agree with me completely on tax forms.

I will be making some posts later today on books, but first I have to have my taxes done. This is like a visit to the dentists office for me. I would like to avoid it at all costs. A lot of people have been coming into our library to have their taxes done. The AARP offers free tax help to seniors. You can search for tax help by zipcode. https://locator.aarp.org/vmis/sites/tax_aide_locator.jsp

A lot of people have been coming in for the tax rebate offered to people who file in the United States, $1200 as a stimulus for people who earn less than $72,000 a year for a couple. This is adjusted downwards for people who earn more.

We have a community room in the libary where the AARP-- American Association of Retired People helps people with taxes. A lot of senior citizens have been calling for this who are on social security who haven't filed for taxes for years. Also a lot of people who have not been part of the tax roles for a while. I think the government will suddenly have a much larger tax roll in the future and will make money from this down the line. They are casting out their net to catch the fish (taxpayers).

We also leave free tax forms in the lobby for people to pick up. This gets replenished in the morning for people to pick up state and local tax forms. Tax season ends soon, so if you are an American go do your taxes...

My tax man asked me how come I always made a small amount of money in stocks. My advice was that I could not give advice on individual stocks, but that there were two really excellent books which should go into anyones investment library. They are Benjamin Graham, The Intelligent Investor, and Philip A. Fisher, Common Stocks and Uncommon Profits. Benjamin Graham is considered the father of value investing, and Philip Fisher is considered the father of growth investing. Warren Buffett claims that The Intelligent Investor is the best book ever written for lay investors.

I tried to read The Long Emergency Surviving The Converging Catastrophes of the Twenty-First Century by James Howard Kunstler. However, when I started reading his thesis, I found huge holes in it. First off, our industrial transportation sector does not rely on gasoline, it relies on diesel for trains and trucking. Diesel is virtually interchangeable with biodiesel. This also applies to the public transportation systems like subways and buses. These will not be hit as hard with a gasoline crisis, because it is much easier to run the public transportation system on alternative fuels. Private transportation like small cars and air transportation will be hit a lot harder than public transportation.

The other thing to consider is that most of the utilities and industrial energy is not produced from gasoline, it is produced from coal, and other energy sources. Slowly wind is gaining traction as well as biomass.

I see a very different future than James Kunstler sees. I see the future being supplied by biorefineries, companies that use biological feedstocks to create multiple products, much like an oil refinery does. MGP Ingredients is an excellent example of this. In fact, I see this as a potential future replacement for oil refineries.

Patricia Woertz vice president of Chevron recently became the CEO of ADM in 2006. We are being fed an ethanol future by the oil companies under the table. We need to have more of a say in the future which is coming to us.

There are other developments which make me see a very different future than the one James Howard Kunstler describes. I had to put the book down before page 50. I simply could not believe what he was telling me. Some parts of it might be true. There will be a long period of conflict before oil is replaced as a transportation fuei, but it is inevitable.

A Few Books And Comments On Money

US Silver Certificate Dollar

Money is one of those things which bloggers seem to talk about a lot. These are a few book recommendations on investing. The first four books are currently part of the Wiley Investment Classics series. The first book is one which most stock brokers claim they have read at one point or other, Security Analysis by Benjamin Graham and David L. Dodd. Benjaimin Graham is considered to be one of the fathers of value investing. The next book is called Common Stocks and Uncommon Profits by Philip Fisher. Philip Fisher is considered to be the person who came up with idea on how to invest in growth stocks.

The other two books are about the condition of wall street. They show how little has changed in the way people act around stocks and money. The first book is Where Are All The Customers Yachts: A Good Hard Look At Wall Street by Fred Schwed. This book is quite fun to read. Confessions of A Stock Operator by Edwin Lefevre is equally entertaining.

The best book which I have ever read on the concept of value is an art book, surprisingly. The book is called Boggs: A Comedy of Values by Lawrence Weschler. J.S.G. Boggs is an artist who draws money. He draws single sided bills. These are variations of different types of money with fantastical elements, like flowers and pictures of children, or odd colors. He then tries to use the bills to buy things from stores. He tells the people he is attempting to buy the things from that it is not real money but art, and if they want the art, they should give him some change and a receipt for the thing he has bought. Watching the process is fascinating. This link has an interview and a video of him. http://www.pbs.org/wnet/egg/217/boggs

Please don't ask me about stock tips. I'm not great at this.. Two of my recent investments were near total disasters. I invested in HOKU Scientific, a fuel cell company which recently was forced to switch from being a fuel cell manufacturer to a solar cell manufacturer. HOKU lost its contracts for fuel cells which are basically pie in the sky in most cases and was forced to invest in a form of more realistic energy, solar energy.

I also am invested in Finavera, a company that recently had another total disaster. At the beginning of November, the wave energy generation buoy which they were working on failed its commercialization test. The buoy went from a commercial value of over $4 million dollars to being written down to $1. The wave energy generator proved to be commercially unviable. Luckily, the company didn't go out of business completely because they were heavily invested in wind energy, a more traditional form of alternative energy. They received financing to stay in business.

Now is not the best time for alternative energy in the United States. Also investing in the stock market is risky. I used etrade to make my trades. One day, because Citigroup investment analysts downgraded it, the stock fell 58% in value. I pulled all of my trading money out of there quickly. In the beginning, it looked to be an online stock trading company failure. Luckily, someone bailed them out. If Etrade had gone under, it would have had incredible impact on the market. http://www.boston.com/business/globe/articles/2007/11/13/etrade_stock_falls_58_after_forecast/

Things in the stock market are very scary right now.