Friday, July 31, 2009

The Wealthy Barber, by David Chilton

I've continued my search for a good book on financial planning to recommend to my children; Chilton's book was recommended to me.

The conversational, parable style might work for some folks, but it didn't much amuse me. The key points, however, are solid.

I won't recommend this book, but will net it (and similar books) out in just the 655 words that follow:
  1. Pay yourself first by setting aside 10% of your income as automatic savings (i.e., payroll deduction or the like to remove any opportunity to treat it as discretionary funds). What to do with the money? Chilton likes dollar cost averaging to (low expense rate) money market funds; seems reasonable to me. (Consider Vanguard.)

  2. If you have dependents, have a will. This seems pretty obvious; if you're in Texas, I recommend Keith Gamel do the paperwork for you. (Once she passes the Texas bar next year, I'll recommend another attorney; no offense to Mr. Gamel.)

  3. Life insurance, maybe. If you don't have dependents, you don't need it. If you do have dependents, you only need it if you have debt, or if you want to provide for those dependents. If you want it, you only want term insurance -- anything a life insurance agent thinks is bad is probably good (i.e., if their compensation is minimized, your efficiency is probably maximized).

    Term life insurance is focused insurance - it doesn't help you save, it isn't an investment, it simply pays out on your demise. Check out professional organizations (e.g., ACM, IEEE, NRA) as well as established insurance firms for quotes. The amount: pay off your debts, provide for sufficient funds to accomplish your post-death wishes (e.g., significant other can pay their bills, offspring can attend college, dog can lounge in a silk covered pet bed, whatever), and don't forget the impact of inflation (i.e., you might want to slightly over-insure for that) nor the declining needs of your dependents (e.g., as kids age out, or the need for significant other to vacation on the Riveria declines as he/she finds a replacement loved one).

    If you lack debt, your finances' liquidity would cover the tax pain of your estate, or you just don't give a damn about what happens when you're dead, then save your money.

  4. Plan for retirement. In other words, in addition to the 10% you pay yourself first, add on an IRA (or Keogh), and a 401(k) or 403(b). This is easiest if you qualify for your investment (e.g., in an IRA) to be tax deductible as you make it (the earnings are tax deductible in any case). The investment structure: focus as usual on low expense investments, consider dollar cost averaging into financial instruments, devise an allocation that meets your requirements for sleep (e.g., more or less risky, realizing that the more the risk the more the return, within reasonable - don't fall for the Madoff ponzi scheme craziness - bounds).

  5. Home ownership - or not. Renting makes fine sense; home ownership is emotional. If your ownership expense (mortgage, taxes, maintenance) is roughly equal to what it would cost you to rent an equivalent property, you're probably in fine shape if you want to own. A home shouldn't be your primary investment asset.

  6. Avoid credit card debt; avoid debt. Don't pay credit card debt, which isn't to say, "be a deadbeat," but rather, pay off your credit card bill in full each month, never pay credit card interest ever, and if you can't handle that, cut up your credit cards.

    Credit card debt is undoubtedly the most expensive debt short of borrowing from a loan shark. Its only advantage is that the credit card firm won't break your legs if you don't pay. Either way, the interest will break your back.

    While on this theme, strive to avoid non-tax-deductible debt in general. It is costly. Think carefully about the difference between what you want and what you need; doing so will often allow you to save an amazing amount of money.
Chilton has one of his characters quote Syrus (p 59): "Many receive advice, few profit by it." The six steps above are great advice for my kids (and probably many others) and saves them reading several books; all they need to do is execute on it.

Thursday, July 30, 2009

The Unlikely Disciple: A Sinner's Semester at America's Holiest University, by Kevin Roose

My pointer to this was Jacobs, because Roose was his unpaid intern during the writing of that book. I enjoyed "The Unlikely Disciple" because the writing is solid and there was an element of suspense to see how Roose was affected at the end by his experience.

In short: Roose was a journalism major at Brown; took a semester's leave of absence to study at Jerry Fallwell's ultra-conservative, "bible is the literal word of God" college, Liberty University, specifically to write a book about his experience there. Here's how I net out Roose's experience of life at Liberty:
  1. Homophobia runs rampant.
  2. Normative behavior quite different from baseline; can't judge as good or bad.
  3. In objective argument, atheists overwhelmingly defeat professor in debate on religion, e.g., bible literalists have trouble defending bible contradictions. (See also Jacobs' book, or Dawkins'.)
  4. Dating is easier within structured behavioral boundaries.
  5. Anti-evolution arguments are indecipherable at best.
  6. The students are mostly likable people; taken independently of the behavior required by their religious beliefs (i.e., targeted hatred), they're great folks.
Roose picks up some of the beliefs - or at least habits - even a semester after leaving the school.

I was surprised. Shouldn't have been: heard of the Stockholm Syndrome? Maybe that's unfair: I just expected Roose to fulfill his role as "Godless liberal" and he ended up being open minded (to closed minded-ness? Be nice now Carl!) instead.

In any case, can't help but expect to read more of Roose's work - in magazines or books - and I look forward to it.

Monday, July 20, 2009

Always Looking Up, by Michael J. Fox

I strongly recommend this book.

What should come next is my argument in support of the advice: what's great about this book? That's a tougher assignment than I'd expected. It isn't the best written book, nor most captivating page by page -- but as a whole, it just works.

Fox seems charismatic, humble; clearly a sweet guy. He has a mission and a passion for it (use stem cells to aggressively treat diseases, from Parkinson's to spinal cord injury to juvenile diabetes).

I like this quote a lot, after pointing out that people against stem cell research often identify themselves as pro-life: "... explain to those of us with debilitating diseases -- indeed, to all of us -- why it is more pro-life to throw away stem cells than to put them to work savings lives."

Pretty short at 276 pages and a fast read, I suggest you read this book.

Friday, July 17, 2009

The Joint Book, by Terrie Noll

Woodworking joints, silly!

This is a very small, very useful reference book. It covers most wood joints, and promises to be very helpful.

Tuesday, July 14, 2009

Below Zero, by C. J. Box

This is a likable book, so I feel guilty assessing it as a solid C+. But that's what it is. Now this doesn't imply you shouldn't read it -- if you like a standard procedural, part of a longer series featuring recurring characters, and a quick, no introspection required kind of read, then this may be a perfect book.

There's the law man who goes against the mainstream to follow his ethical compass, the supportive senior official to provide air cover, the hunted criminal with a heart of gold who partners with our law man to do the right thing, the background family life of our hero, and an occasional piece of Wyoming scenery.

What could be bad?

Thursday, July 9, 2009

1001 Inventions: Muslim Heritage in Our World, by Salim T. S. Al-Hassani

This is a must-read book for anyone who teaches world history or is interested in it. Western education skips from the advances of Archimedes, in the 200's BCE, all the way to Gutenberg's press in the 1400's CE. Was all the world in the dark ages for 1,600 years -- or just Europe?

The answer: just Europe. While Europeans where burning people at the stake for inappropriate religious leanings, disdaining bathing and general hygiene, and wandering about in a stupor, the Islamic civilizations of Turkey and the middle-east were thriving.

Some examples: the camera, invented by Ibn al-Haitham, born 965. Surgical instruments, by Al-Zahrawi born 936, and a complete (and correct) model of blood circulation by Ibn Nafis, born 1210. Free healthcare in hospitals - with druggists, barbers, and physicians - existed in the 1100s, with health inspectors to assure standards.

Algebra, of course, is due to Al-Khwarizmi, born 780. Did you know that coffee dates to the 8th century, due to Khalid the goat hearder? The Arabic al-qahwa was served as coffee in Vienna's coffee houses in 1645.

Do you like your bath? The Islamic bath picked up from the Roman Tepidarium and Caldarium, and became an integral part of the culture, as cleanliness is linked to purity in the Quaran (e.g., 2:222). So warm baths were the norm in Islamic lands throughout the dark ages. Even in 1529, Sir John Treffy was opposed to bathing, writing, "many folke that hath bathed them in colde water have dyed." [Reference check: see "The old English herbals," Eleanour Rohde, 1922.] Smelly!

There are dozens more of well written examples in the book.

You get the idea that I'm a fan of this book. And horribly dismayed that in the West we largely manage to skip over the extraordinary advances that came from Islamic cultures.

Tuesday, July 7, 2009

The Death of Vishnu, by Manil Suri

This is an engrossing book; it allowed my flight to pass quite pleasantly. Good writing, interesting characters; it kept my interest to the end.

It is, however, one of those novels with an underlying goal or theme, and I'm not insightful enough to get it. There's some message here, about India, or religion, or reincarnation, or something. My bet is that it is a commentary on the isolation of individuals even in close proximity - as close as marriage, or living in adjacent apartments, or on the platform of a stair well. The ending, such as it was, didn't clear this up - or much else for that matter.

Having said all that: yes, I recommend Suri's novel.

Thursday, July 2, 2009

Devil's Corner, by Lisa Scottoline

My daughter left this book on the table when she left for the weekend; I finished my magazine and was looking around for something to read - lazy, I picked up the nearest book - this one. Let me cut to the chase: this is a chick-flick mystery, which is to say one-eighth romance, one-quarter totally improbable scenarios, one-quarter just plain annoying, and the remainder (three-eighths for those of you counting) a decent novel.

I'm not even going to say more about it.