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March 31, 2010

Book Review “No More Monday’s” by Dan Miller

Filed under: Book Review, Uncategorized — Tags: , , , — thebalancedspreadsheet @ 7:39 am

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After reading and reviewing Dan Miller ‘s first book “48 Days to the Work You Love” reading his second book “No More Mondays” was the next logical step.  No More Monday’s is a great follow-up that focuses primarily on finding your unique calling and using that start your own business.  It proposes new ideas and ways of looking at things though revolutionary thinking instead of traditional thinking.

After finding and determining your unique calling you will then stop doing   J-O-B-S that we hate and instead start living with a purpose.  To find that purpose Miller writes that one must figure out their skills and abilities, personality tendencies, and values, dreams, and passions.  Miller then devolves into the perceived “risks” of staring your business which includes the question is it riskier to stay at a job you hate then to do a job that fits your unique abilities?  Also part of the risk is the risk of failing but Miller points out that you must embrace failure before you can succeed. 

The book also goes into depth on the different types of work models from freelancing, to franchising, to selling, to consulting, to traditional work.  Miller’s concept of “firing yourself” was an eye opener to me as he argues that by being in a safe “secure” job for 30 years might not be a blessing as much as it is a curse due to the potential to become comfortable and not learn as much as you can as well as losing the potential to make more money out on your own.

Overall I found this book to be a must read for anybody who has ever had the smallest desire to go out on their own and start a business.  What challenged my thinking the most was the discussion on changing from a paycheck mentality to where your time does not equal compensation but instead where results equal your compensation and where profits become better than wages.  For someone like me who has been an employee their whole life, this was a whole new way of looking at things.  The book also discusses the myth that you must have significant start-up cash to succeed, but in reality all you need is a good idea to succeed.  If you follow the advice in this book you will do well in the three “P’s”, passion, purpose, and profit.

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March 18, 2010

Tom Stanley “Stop Acting Rich” Book Review

Filed under: Book Review, Personal Finance, Uncategorized — Tags: , , — thebalancedspreadsheet @ 11:24 am

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I just finished Dr. Tom Stanley’s book “Stop Acting Rich: And Start Living Like A Real Millionaire” and wanted to do a review of it.  This is the third book in the popular “Millionaire next Door” series in which I already reviewed the first book “The Millionaire Next Door” back in June.  Stop Acting Rich is a great follow-up with new and updated information.

Doctor Stanley’s updated research included surveying 944 millionaires.  To qualify as a millionaire one had to have cash and investments of over $1 million, as home equity was not included.  Overall the research found that the average millionaire was 57 years old, with an average income of $212,888 and a net worth of about $2.22 million.

Using the research the book provides consumption habits of millionaires in six different categories.  They are shoes, watches, alcohol, wine, cars, and homes.  The most interesting tidbits found were that millionaires are not as luxurious as we are made to believe.   Their lifestyle is not full of consumption.  As Stanley wrote, “There is no significant correlation between the make [brand] of motor vehicle you drive and your level of happiness with life.”  Similiar results were found when comparing homes and clothing.

Overall if you liked the Millionaire Next Noor or the Millionaire Mind you will enjoy reading this book.  The data and graphs are great and each chapter tells its own story.  The main point I took from this book is that even when the affluent spend on luxury items it is after they work hard and accumulate their nest egg not before.  As Stanley write “If you spend in anticipation of becoming rich, you are unlikely ever to become truly wealthy”.  I find this book a good tool and guide to use when trying to grow ones wealth.

February 10, 2010

Book Review “48 Days to the Work you Love” by Dan Miller

Filed under: Book Review, Personal Finance, Uncategorized — Tags: , , , , — thebalancedspreadsheet @ 1:46 pm
48 Days to the work you love

48 Days to the work you love

As mentioned before earlier in the week, I have been reading a lot of good business/personal finance/career books lately and wanted to take some time to review one.  “48 Days to the Work you Love” by Dan Miller is probably one of the best career books I have read.  The book does a good job of giving you purpose for finding work that has both passion and meaning.  The job seeking advice is not just a “How to Interview” or “How to get your resume noticed” but rather goes into defining what work is and how to face this current job market that is constantly changing.  Next the book goes very in depth on how to seek the great job you have always wanted with very practical, detailed advice.  The end of the book contains sample resumes, cover letters, etc that you can model after.  The book does have a spiritual tone to it, but it is not an overbearing one.  A few of the key points in detail:

The book starts off with describing the difference between work and play and asks the question, can work and play mix?  Yes, it can as work does not have to be a necessary evil that just pays the bills, but rather something that you enjoy getting up to do each day.  The next chapter goes into the challenge of change in the market place.  This is not our grandparents’ or even our parents’ job market, as people now change jobs on average once every 3.2 years.  We are currently in a shift from a production based job market to a knowledge based market and you need to be prepared to be able to respond.  Dan then addresses questions such as “What is real job security?” and “Is it bad to get laid off from a job you hate?”  

After diving into change, Dan switches gears and goes into finding your calling and discusses the difference between vocation, career, and job.  According to Dan one must find a career that has purpose, in addition to having a life plan that incorporates your job, instead of centering in it.  Too often we are defined by “what we do” instead of “who we are” and you want to achieve success in all areas of life and not just your career.

To achieve success in all areas of life, you then must create goals. The key is to write down these goals down on paper.  Goals can include short term and long term (up to 5 to 10 years).  After writing these goals down, the next step is to work backwards and take steps to figure out what you will need to do to achieve your goals.  Goals should not just be for your career but also in other areas of your life such as well. The seven areas of life he recommends to make goals in are:

  1. Finances
  2. Physical
  3. Personal Development
  4. Family
  5. Spiritual
  6. Social
  7. Career

This all leads to the process of starting your job search.  There is a great deal of information and tips about creating a resume, finding jobs leads, the dos and don’ts about interviewing, and negotiating.  Each of these topics has its own chapter and breaks each down into detail and gives advice on such things as how to be confident without being cocky, when is the right time to talk about compensations, etc. 

To sum it all up, this book to me is an absolute must read.  The chapters on developing and creating goals really stuck out to me.  I wish I would have known most of the career information when I graduated college because it took me a while to get a job offer after college.  Dan wrote a follow up books which I am about to start called “No More Mondays” which is all about starting your own business.  I hope to review that one soon.  Again, I highly recommend this book to anyone looking for career advice.

November 12, 2009

Book Review: “Thou Shall Prosper” by Rabbi Daniel Lapin

Filed under: Book Review — Tags: , , , , , — thebalancedspreadsheet @ 12:43 pm

Thou Shall Prosper

I have not found the time to do a book review in a while, even though I have been reading some good financial books recently.   In fact, I was surprised to find out that I have not done a book review since my review of “The Millionaire Next Door” back in June.  But after finishing “Thou Shall Prosper” by Rabbi Daniel Lapin I knew it was time to do another book review.

Rabbi Lapin’s book is insight from an Orthodox Rabbi on the Jewish ways of creating wealth.  It is not a book on Judaism, but more on principles that allow one to create wealth. Rabbi Lapin divides the book into his 10 principles or Commandments on wealth:

The First Commandment-Believe in the Dignity and Morality of Business

The Second Commandment-Extend the Network of your Connectedness to Many People

The Third Commandment-Get to Know Yourself

The Fourth Commandment-Do Not Pursue Perfection

The Fifth Commandment-Lead Consistently and Constantly

The Sixth Commandment-Constantly Change the Changeable, While Steadfastly Clinging to the Unchangeable

The Seventh Commandment-Learn to Foretell the Future

The Eight Commandment-Know your Money

The Ninth Commandment-Act Rich: Give Away 10 Percent of Your After-Tax Income

The Tenth Commandment-Never Retire

While all 10 chapters have great insight, three stuck out to me.

The First Commandment-Believe in the Dignity and Morality of Business

Making money is much harder to do if, deep down, you suspect it to be a morally reprehensible activity.

With all the discussion over the latest Wall Street bailouts and discussion over executive bonuses, it can be easy sometimes to think that all business is full of greedy, immoral people.    Where as that is the farthest thing from the truth.  Business in itself is good; it is the exchanging of goods and services to people who desire it.  Business is where wealth is created.  True, there have been businesses that have mistreated the customer all in the name of profit, but that makes them bad, not all business.  It was refreshing to hear that point of view.

The Ninth Commandment-Act Rich: Give Away 10 Percent of Your After-Tax Income

Through the mystical alchemy of money, giving charity jump-starts wealth creation

One of our financial goals is to become big givers.  Rabbi Lapin points out a big myth that people have about giving.  When you are giving, you are hurting yourself financially when instead you are really opening yourself up to receiving more because giving focuses you outside yourself.  It is better to give then to receive.  We try to think of giving as something rational, but it is something totally irrational that does something inside of you that can not be explained mathematically or on a spreadsheet, as much as I might try. J But the giving of your time and money opens up so many doors to be able to create more wealth.

The Tenth Commandment-Never Retire

Integrate your vocation and your identity by thinking of life as a journey rather than a destination

Rabbi Lapin discusses the concept of never retiring in the final chapter.  Rabbi Lapin reminds us the retirement is a 20th century concept and that the Hebrew language does not even have a word for.  He is not saying to work at a job you hate for 60 years until you die.  Rather he says that we are stimulated by work and that we need to stop believing the lie that we have nothing to offer when we get older, but instead realize that when we get older we have vast amounts of wisdom and experience to share with others and use in the workplace.

Rabbi Lapin does a good job of using real life examples when illustrating his points and ties all 10 of his commandments together.  Again, this book does have religious references but does not hit you over the head with it.  I feel like this book can be read by someone of any religion.  Overall this book is on my must read personal finance book list.  I learned a great deal from reading it.

June 26, 2009

Book Review: The Millionaire Next Door

Filed under: Book Review — Tags: — thebalancedspreadsheet @ 2:59 pm

From time to time I would like to do a book review of what I have been reading.  I try to read a lot during my spare time and I enjoy reading a lot of non-fiction books either on sports, religion, or finances.  Since this is a financial blog, I will review finance books that I found interesting and would recommend.  Today’s book is The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas Stanley and William Danko. 

This book was written in 1996 and despite being over a decade old; the studies and surveys done in this book are still applicable today.  For the book Stanley and Danko surveyed over 1,100.  They found that there are seven main factors that cause people to accumulate wealth:

-They live below their means

-They allocate their time, energy, and money efficiently, in ways conducive to building wealth

-They believe that financial independence is more important than displaying high social status

-Their parents did not provide economic outpatient care

-Their adult children are economically self-sufficient

-They are proficient in targeting market opportunities

-They chose the right occupation

Although the book consists of eight chapters, the book is broken up into two halves.  The first half starts out by putting people into two categories, prodigious accumulators of wealth (PAW’s) and under accumulators of wealth (UAW’s).  PAW’s are those who are best at building their net worth compared to others in their age/income bracket.  UAW’s are the opposite.   The next few chapters focus on the lifestyle choices of many PAW’s.  What kind of clothes do they buy, how much of their income do they spend/save in a year, what kind of automobile do they drive, and how much time do they spend on their finances a year.  The book concludes that many millionaires don’t look like the “typical” millionaire.  PAW’s tend to not buy expensive clothes such as fine suites and fancy watches.  They also tend to not drive as nice of a car as you think they would.  They found that only 23.5% of millionaires have a current year model car and that half on the millionaires had never paid more then $30,000 for a car.  I know that was in 1996 dollars but that stat to me was pretty surprising.  Not so surprising was that PAW’s spend a lot of their time researching investments and keeping an up to date budget.  While UAW’s do not spend nearly as much time on their finances.  The authors made a good point when comparing PAW’s to UAW’s.  A lot of people know how to play good offense (have a high income), but few know how the play defense (safe and invest the income, do not go into debt).  They make the point that it is better to have a good defense then a good offense.

The second half of the book deals with the affluent and how they handle money with their offspring.  To me this part of the book was the most fascinating and eye-opening.  Stanley and Danko found that most of the estates that will have to pay the death-tax tend to give yearly gifts to their children.  They called these gifts, normally $10,000 a year, economic outpatient care (EOC).  Those who receive EOC have a tendency to earn less then their peers in their profession as well as underachieve relative to their peers in net worth.  They also tend to be hyper-consumers instead of being savers like their parents.  The case studies they had in the book really hit this home to me.  It seemed to me that EOC was doing more harm then good.  The book then finishes up by predicting what professions were growing and where the next generation of millionaires would come from.

All in all this book is a classic that I think should be on the short list of must read personal finance books.  It has great insight into the behaviors of millionaires.  It also shows that there is no special secret behind becoming a millionaire.  Basically spend less then you make and invest the rest.  Stanley wrote a follow-up book called The Millionaire Mind that I have heard is also good.

For those of you who have read the book do you have any comments?  Agree or disagree with any of the findings?  Leave a comment.

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