by Thomas Stanley, William Danko
Narrarated by: Cotter Smith
Publisher: Sound Ideas
Total Length: 8 Hours, 50 Minutes
Date Published: June 24, 2008
Publisher: Taylor Trade Publishing
ISBN: 978-1589795471
Number of Pages: 258
Date Published: November 16, 2010
Each time I interview someone for an opening that I trying to fill, I almost always throw out the question, "What book have you read most recently (other than a technical manual), and what did you learn from it?" It helps gauge a person's analytical skills on something other than a purely technical problem (gives them the opportunity to identify an issue or area of interest and prove that they put some thought into it). It was during one of these interviews that a candidate mentioned The Millionaire Next Door (TMND). I ended up sending that candidate a job offer, and I am grateful for the recommendation for my reading list.
Surprised?
- What kind of car do you drive?
- What neighborhood do you live in?
- What is the most you ever paid for a pair of shoes?
- How much did you spend on a college education?
- Are you an entreprenuer?
- Do you believe that hard work pays off?
Danko and Stanley surveyed millionaires with these types of questions and many, many more. This book is a distillation of the metrics that they found correspond to the success of millionaires. "In the course of our investigations, we discovered seven common denominators among those who successfully build wealth."
- They live well below their means
- The 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.
Wealth Accumulation
Income does not equal wealth. Stanley and Danko make it a point to distinguish between current income, total net worth and expected net worth. They provide an interesting calculation to see where you stack up.
"Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by 10. This, less any inherited wealth, is what your net worth should be."
Based on this formula, if you are close to the expected value, then you are considered an Average Accumulator of Wealth (AAW). The ones that have at least twice the expected net worth (Age * Income / 10 * 2) are considered a Prodigious Accumulators of Wealth (PAW). At the bottom end of the calculation, you are an Under Accumulator of Wealth (UAW) if you have less than half of your expected net worth (Age * Income / 10 / 2).
"Big Hat, No Cattle"
The primary reason that so many people do not achieve the levels of wealth accumulation that they should is because they are too busy trying to appear well off, at the expense of sacrificing true financial security for the façade of keeping up with the Jones'. The truly affluent are more worried about how many cattle they have, not how big their cowboy hat is.
Education
The wealth accumulation formula is interesting because it takes into account how many years
a person has to build their wealth. One of the major factors that
contribute to the time spent building wealth is whether that person pursues post secondary education. Michael Bloomberg gave a graduation speech last month that mentions this fact (which some criticized him for), but Stanley and Danko's research supports this fact. The time spent in college, is time lost in terms of accumulating wealth, plus the money spent on college tuition and expenses (see denominator #7 above).
Budgeting Is Like Exercise
There probably aren't many people that really "enjoy" sitting down and going over all of their expenses and categorizing them and analyzing income and spending trends, but that is was the majority of these PAWs do on a regular basis. Do you know how much you spent on gasoline last month? How about eating out? How about household utilities? TMND relates this routine practice to that of exercise. Who is more likely to have a regular exercise routine, those who are in shape or the less than healthy types?
You might think, why would someone who is rich need to worry about keeping track of all these details? But that is precisely the point. They don't keep track of them because they are wealthy; they are wealthy because they took the time to keep track of their budget.
Economic Outpatient Care
Economic Outpatient Care is defined in the book as relying on income from your parents when you should be at a point of providing for yourself (see denominator #4 and #5 above). Some of the best lessons I got from TMND was the sections dealing how to help your children be successful. What it really comes down to is that teaching children how to be self sufficient and provide for themselves is much more beneficial than continually investing in their bad spending habits.
Reflections
I originally listened to the audiobook first, but then ended up getting a copy of the paperback to be able to review all of the tables and charts in the book. I have since loaned out my copy of this book to several friends and they have all be appreciative of the recommendation as well. Take the time to read this book. It is definitely an eye opener.
Breakpoint by: Richard A. Clarke
Narrarated by: Robertson Dean
Publisher: Penguin Audio
Total Length: 8 Hours, 19 Minutes
Date Released: September 20, 2007
It has been a while since I've enjoyed a recreational novel, or so I thought. (I don't count The Phoenix Project since that more or less is a text book on DevOps, ToC, Lean, and VisibleOps disguised as a novel). But then I saw this quote from the author,
"Fiction can often tell the truth better than nonfiction. And there is a lot of truth that needs to be told."
The Internet links between North America and the rest of the world severed. Research facilities blown up by hackers gaining access to SCADA devices. The heads of DARPA, the National Science Foundation, and the National Institutes of Health blown up by a suicide bomber. The evolution of a new human species... This cloak and dagger story is filled with twists and turns. The FBI, CIA, DHS, NSA and every other government agency is trying to figure out who is behind these attacks, but it is up to a NYPD detective and an analyst with the 'Special Projects Office, Intelligence Analysis Center' to really crack the case. As far fetched or implausible as the plot line seems, Clarke lays out some very clear reasoning for combining these particular elements and other into Breakpoint.
Questions to Ponder
Given the news articles throughout the past year or so, I wasn't surprised by all the references to China hacking into university research centers or SCADA systems. But had I read this book when it came out back in 2007, I probably would have been fairly surprised by and skeptical of all these vulnerabilities gaping holes in the safety of the everyday life that I take for granted as an American.
Throughout the book, Clarke presents several conflicts of ethical debate, the biggest of which is the question of what it means to be "human". Would genetically engineering someone to have several extra chromosomes change whether they were still human?
Clarke makes an interesting reference to Plato's republic, by bringing up the class system of gold men vs bronze men. Are the changes and advances in technology widening the gap between the haves and the have-nots?
For all the advances that we claim technology has made for us, are we really any better off in terms of happiness or quality of life?
by Leo Tolstoy
Translated by L. and A. Maude
Originally Published: 1885
Project Gutenberg: June 13, 2009
I love this short story, a great lesson in Time Management and Social Responsibility...
- How can I learn to do the right thing at the right time?
- Who are the people I most need, and to whom should I, therefore, pay more attention than to the rest?
- And, what affairs are the most important, and need my first attention?
Three Questions
It once occurred to a certain king, that if he always knew the right time to begin everything; if he knew who were the right people to listen to, and whom to avoid; and, above all, if he always knew what was the most important thing to do, he would never fail in anything he might undertake.
And this thought having occurred to him, he had it proclaimed throughout his kingdom that he would give a great reward to any one who would teach him what was the right time for every action, and who were the most necessary people, and how he might know what was the most important thing to do.
And learned men came to the King, but they all answered his questions differently.
In reply to the first question, some said that to know the right time for every action, one must draw up in advance, a table of days, months and years, and must live strictly according to it. Only thus, said they, could everything be done at its proper time. Others declared that it was impossible to decide beforehand the right time for every action; but that, not letting oneself be absorbed in idle pastimes, one should always attend to all that was going on, and then do what was most needful. Others, again, said that however attentive the King might be to what was going on, it was impossible for one man to decide correctly the right time for every action, but that he should have a Council of wise men, who would help him to fix the proper time for everything.
But then again others said there were some things which could not wait to be laid before a Council, but about which one had at once to decide whether to undertake them or not. But in order to decide that, one must know beforehand what was going to happen. It is only magicians who know that; and, therefore, in order to know the right time for every action, one must consult magicians.
Equally various were the answers to the second question. Some said, the people the King most needed were his councillors; others, the priests; others, the doctors; while some said the warriors were the most necessary.
To the third question, as to what was the most important occupation: some replied that the most important thing in the world was science. Others said it was skill in warfare; and others, again, that it was religious worship.
All the answers being different, the King agreed with none of them, and gave the reward to none. But still wishing to find the right answers to his questions, he decided to consult a hermit, widely renowned for his wisdom.
The hermit lived in a wood which he never quitted, and he received none but common folk. So the King put on simple clothes, and before reaching the hermit's cell dismounted from his horse, and, leaving his body-guard behind, went on alone.
When the King approached, the hermit was digging the ground in front of his hut. Seeing the King, he greeted him and went on digging. The hermit was frail and weak, and each time he stuck his spade into the ground and turned a little earth, he breathed heavily.
The King went up to him and said: "I have come to you, wise hermit, to ask you to answer three questions: How can I learn to do the right thing at the right time? Who are the people I most need, and to whom should I, therefore, pay more attention than to the rest? And, what affairs are the most important, and need my first attention?"
The hermit listened to the King, but answered nothing. He just spat on his hand and recommenced digging.
"You are tired," said the King, "let me take the spade and work awhile for you."
"Thanks!" said the hermit, and, giving the spade to the King, he sat down on the ground.
When he had dug two beds, the King stopped and repeated his questions. The hermit again gave no answer, but rose, stretched out his hand for the spade, and said:
"Now rest awhile-and let me work a bit."
But the King did not give him the spade, and continued to dig. One hour passed, and another. The sun began to sink behind the trees, and the King at last stuck the spade into the ground, and said:
"I came to you, wise man, for an answer to my questions. If you can give me none, tell me so, and I will return home."
"Here comes some one running," said the hermit, "let us see who it is."
The King turned round, and saw a bearded man come running out of the wood. The man held his hands pressed against his stomach, and blood was flowing from under them. When he reached the King, he fell fainting on the ground moaning feebly. The King and the hermit unfastened the man's clothing. There was a large wound in his stomach. The King washed it as best he could, and bandaged it with his handkerchief and with a towel the hermit had. But the blood would not stop flowing, and the King again and again removed the bandage soaked with warm blood, and washed and rebandaged the wound. When at last the blood ceased flowing, the man revived and asked for something to drink. The King brought fresh water and gave it to him. Meanwhile the sun had set, and it had become cool. So the King, with the hermit's help, carried the wounded man into the hut and laid him on the bed. Lying on the bed the man closed his eyes and was quiet; but the King was so tired with his walk and with the work he had done, that he crouched down on the threshold, and also fell asleep--so soundly that he slept all through the short summer night. When he awoke in the morning, it was long before he could remember where he was, or who was the strange bearded man lying on the bed and gazing intently at him with shining eyes.
"Forgive me!" said the bearded man in a weak voice, when he saw that the King was awake and was looking at him.
"I do not know you, and have nothing to forgive you for," said the King.
"You do not know me, but I know you. I am that enemy of yours who swore to revenge himself on you, because you executed his brother and seized his property. I knew you had gone alone to see the hermit, and I resolved to kill you on your way back. But the day passed and you did not return. So I came out from my ambush to find you, and I came upon your bodyguard, and they recognized me, and wounded me. I escaped from them, but should have bled to death had you not dressed my wound. I wished to kill you, and you have saved my life. Now, if I live, and if you wish it, I will serve you as your most faithful slave, and will bid my sons do the same. Forgive me!"
The King was very glad to have made peace with his enemy so easily, and to have gained him for a friend, and he not only forgave him, but said he would send his servants and his own physician to attend him, and promised to restore his property.
Having taken leave of the wounded man, the King went out into the porch and looked around for the hermit. Before going away he wished once more to beg an answer to the questions he had put. The hermit was outside, on his knees, sowing seeds in the beds that had been dug the day before.
The King approached him, and said:
"For the last time, I pray you to answer my questions, wise man."
"You have already been answered!" said the hermit, still crouching on his thin legs, and looking up at the King, who stood before him.
"How answered? What do you mean?" asked the King.
"Do you not see," replied the hermit. "If you had not pitied my weakness yesterday, and had not dug those beds for me, but had gone your way, that man would have attacked you, and you would have repented of not having stayed with me. So the most important time was when you were digging the beds; and I was the most important man; and to do me good was your most important business. Afterwards when that man ran to us, the most important time was when you were attending to him, for if you had not bound up his wounds he would have died without having made peace with you. So he was the most important man, and what you did for him was your most important business. Remember then: there is only one time that is important; now! It is the most important time because it is the only time when we have any power. The most necessary man is he with whom you are, for no man knows whether he will ever have dealings with any one else: and the most important affair is, to do him good, because for that purpose alone was man sent into this life."
