Monthly Archives: December 2015

Top Seven Business Books Read on 2015

I love reading business books. They’re motivational, inspiring and they help me keep focus on achieving higher goals. Most people think  business is only about making money, but it’s way more than that. When we learn about business we learn about how to create something of value, a product or a service, for people who are willing and happy to pay for it. Many business people step out of the crowd, fight their inner fears and insecurities to do something better for the world, then they turn around and share their knowledge and experiences with the rest of us. This is the knowledge I find in business books.

Out of all the books I read this year, these are the ones that I like to recommend. Note: these are not recent books. I just happened to read them this year. I buy most of my books at second hand stores or they are passed down to me after someone else reads them. Many of these books are classics already read and reviewed by many other bloggers. I am just adding my voice to the chorus.

The Automatic Millionaire by David Bach7. The Automatic Millionaire by David Bach

The Automatic Millionaire: Canadian Edition: A Powerful One-Step Plan to Live and Finish Rich

The most important ideas of this book are: Pay yourself first and The latte factor.

Pay yourself first: The most essential part of personal finance is to save money for retirement. However, many people find it hard to muster the discipline to save. Mr. Bach tell us that self discipline is not even necessary. All we have to do is to ask our employers to deposit  money directly into our registered account, even before it touches our own bank account. By doing so, the registered account continues growing paycheck after paycheck until we retire.

The latter Factor: Many of us claim that we don’t have enough money to save, but Mr. Bach suggests that if we cut out the consumption of small, unnecessary items, such as the daily coffee and doughnuts, those little savings, over a long period of time, could build up to a substantial amount of money.

The Wealthy Barber6. The Wealthy Barber by David Chilton

The Wealthy Barber

This book is a parable about three people who seek financial advice from their local barber, who became rich after studying many personal books and seeking advice from financial mentors.

I agreed with the main idea of the book which is to pay yourself first and invest the money. But the devil is in the details. Mr. Chilton advises the reader to find a good fund manager. Research has shown that over 75% of mutual fund managers do not beat the index. I argue that a better suggestion would have been to invest the savings in index funds and/or ETFs.

Mr. Chilton also suggests that we should pay our mortgages as soon as possible. Obviously Mr. Chilton never experienced the low mortgage rates that we are living in our period. In a low mortgage rate environment, I argue that it is better to delay paying the mortgage as much as possible and invest the money in the stock market. If your mortgage rate is 2% and you can get 6% return on the market, why would you pay your mortgage early?

The millionaire mind5. The Millionaire Mind by Thomas J. Stanley

The Millionaire Mind

There are lies, damned lies, and statistics. In this book Mr. Stanley tries to create a statistical portrait of the average millionaire in the U.S. The book was well researched and entertaining. There are many things which made sense, many surprises and some conclusions which Mr. Stanley wanted to believe himself. I believe that Dr. Stanley, in his effort to dismantle the Hollywood version of a millionaire, created a different fictitious millionaire. The religious, hard working millionaire who lives below his means and who is totally devoted to his family.

I found the book interesting, motivating, and even if I don’t believe everything in the book, I still recommend it. There are many valuable lessons in it.

rich dad4. Rich Dad Poor Dad by Robert T. Kiyosaki

Rich Dad Poor Dad: What The Rich Teach Their Kids About Money – That The Poor And Middle Class Do Not!

This book has inspired millions of people to invest in real estate. It’s a parable of Mr. Kiyosaki’s life, mixed with some entrepreneurship and real estate lessons.

The major lessons offered in this book are:

  1. School does very little to give us a financial education.
  2. Wealth is defined, not by how much we earn but by how long we can live from the income of our assets.
  3. In order to become wealthy, we have to invest in income producing assets such as real estate and/or stocks.
  4. Our house should not be considered an asset.
  5. We should use other people’s money to achieve our financial objectives; for example, borrowing money to buy commercial properties.

I recommend this book for anyone who is tired of working for the man.

How to win friends and Influence People3. How to Win Friends and Influence People by Dale Carnegie

How to Win Friends and Influence People

Mr. Carnegie is one of the greatest communicators of the 20th century. He created one of the best known public speaking and self improvement programs of our era. His training program is known throughout the world.

Mr. Carnegie’s course is based on a five-phase continuous improvement cycle:

  1. Build greater self-confidence
  2. Strengthen people skills
  3. Enhance communication skills
  4. Develop leadership skills
  5. Improve attitude and reduce stress

The book is a gem. It will not only improve your business, but it will also improve your personal life.

Builiding Wealth2. Building Wealth by Russ Whitney

Building Wealth: From Rags to Riches Through Real Estate by Russ Whitney

This book is similar to Rich Dad Poor Dad, but it goes a bit deeper into different techniques to build wealth in real estate.

There are several elements that I like about the book:

  1. It is a great source of inspiration;
  2. It is full of techniques and wisdom on how to buy, sell and rent properties;
  3. It shows you how to get started with little or no money.

Overall, the book is a great investment. It is recommended reading for anyone who wants to build wealth, anyone who wants to stop dreaming and start doing. I believe that I will be well compensated for the time I put into reading this book.

Reminiscences of a Stock Operator by Edwin Lefevre1. Reminiscences of a Stock Operator by Edwin Lefevre

Reminiscences of a Stock Operator by Edwin Lefèvre

The book is a disguised biography of legendary trader Jesse Livermore. What struck me the most is that even though the book was written in 1923, it feels as if it was written today. It accurately describes how time stands still in Wall Street. We clearly see that the psychology and emotions of a stock market trader are timeless.

The book makes you feel as if you were there, next to Jesse Livermore, deciding which trade to do next, living the thrill of the win and suffering the pain of losing.

Mr. Livermore became famous mostly for taking advantage of the bear market of 1907 and on the bear market of 1929 he made about $100 million. In today’s dollar that would be about $1.4 billion.

If you like the stock market, I think that this book could play a major role in your success.

McGill University students
I am teaching a bachata class at McGill University

Conclusion

Please let me know in the comments if you have read any of these books and your opinion of them. Which business books would you recommend to the audience.

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Happy new years.

 

 

Presentation Secrets of Steve Jobs by Carmine Gallo

Book Cover: Presentation Secrets of Steve JobsHow to Be Insanely Great in Front of Any Audience

As a member of Toastmasters International ( a public speaking organization), I am always looking for information on how to improve my public speaking skill and how to do better presentations.

Yes, I found some valuable information in The Presentation Secrets of Steve Jobs. Nothing new nor revolutionary, but it is good to hear the same lessons over and over again until they become part of my subconscious.

Here are some of the lessons which are shared in this book:

The Presentation Secrets of Steve Jobs

  1. Have a clear message
  2. Answer the most important question the audience has: Why should I care?
  3. Create Twitter-like headlines
  4. Present the problem or an antagonist
  5. Present the solution
  6. Make sure the numbers are easy to understand
  7. Don’t talk longer than 10 minutes without introducing something new
  8. Invite other speakers to the stage
  9. Keep slides simple
  10. Use props wisely
  11. Practice, practice, practice
Hollowing party
This was a Halloween party at McGill Toastmasters club

The Presentation Secrets of Steve Jobs
was 234 pages long. The actual valuable information could be condensed to 34 pages. The other 200 pages were a combination of Steve Jobs and Apple idolatry plus a bit of self promotion. If you are an Apple/Steve Jobs evangelist, you will love this book. If you are a regular individual, you will find yourself rolling your eyes about three or four times per page.

I think that  when Steve Jobs died, Mr. Gallo saw an opportunity, to wrap a speaking manual around his death.

Overall, I don’t recommend this book. The book has a valuable message, but you have to read through all the other stuff to find that message. You will find better value for your time elsewhere.

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How much do I need to retire?

Climbing my way to succeess.
Climbing my way to succeess.

I am a frugal person and I can live with very little. In addition, I am single and have no kids, so I don’t need much.

My monthly expenses are less than $2,000 per month. This includes a traveling budget for an annual one-week vacation.

I have a property which I rent through Airbnb and this property gives me cash flow of about $1,000 every month ( Summer more, Winter less).

In partnership with a dear friend, I own another property which is rented on a yearly lease. This property generates cash flow of about $100 per month.

I have about $39,000 invested in the stock market. If I assume a return of only 4%, that will be about $130 per month.

In total, my present passive income is about $1230. I need an additional $770 in passive income to cover my expenses and retire.

What is my plan?

The plan is to buy another property and rent it out via Airbnb. This would give me a bit more than I need for my retirement.

The big problem is that with my small income, the bank doesn’t want to lend me more money. I already owe them $220,500. Also, I have reached the limit of my friends generosity. I owe my friends $84,000. I pay them interest at 4% per year.

I am trying to convince other friends that instead of buying Certificates of Deposit at about 1%, or buying bond funds which only pay about 2%, they should lend me some money at 4%. But to no avail, this has not worked out. My friends are afraid of mixing friendship with business and I understand them.

Nevertheless, I am certain that I will find lenders to finance my next property and in about 12 months from this date I will be writing about how I achieved retirement.

How about you, how much do you need to retire?

As you can see from my example, the fastest way to retire is to create a business which will produce cash flow in excess of your expenses. In my case it will be Airbnb rentals. What will be your hustle?

If you don’t have a hustle, and you will be depending on your savings, then this is the calculation which I invite you to do:

  1. Figure out your expenses (Let’s say $2,000 per month, )
  2. Figure out how much you will be receiving from the Canada Pension Plan and any other retirement income. ( Let’s say $600 per month )
  3. Subtract your expenses minus your retirement income ($2,000 – $600 = $1,400)
  4. Divide $1,400 by 4%  and multiply it by 12 months. ($1400 / 0.04 = $35,000 X 12 =  $420,000 )

The 4% rule.

Why did I divide $1,400 by 4%? This is just a rule of thumb which says that if a person withdraws about 4% per year from his savings his money will last about 30 years. Remember, this is just a general guideline. More serious calculations might be needed.

Feel free to mention in the comments where you are in your quest for retirement.

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