I also highly recommend “Investment Strategies for the 21st Century” by Frank Armstrong. The ENTIRE text of the book is available online, and I would definitely save it to your hard drive in case the website goes down. Check out Chapter 22, which is a wonderful discussion about financial pornography that dominates most of the news media, and really only serves to hurt and not help the investing public.

So there you go, more reading then you could ever hope to do in a day. Or even a week or a month, really. Till next time!

To hold you over, I’m linking to three personal finance related carnivals that provide a wealth of information. Take some time out of your busy day and just read a little bit; you never know what you might learn!

The first is the Carnival of Personal Finance #103, hosted over at Cleverdude. He frames the carnival as if it were an episode of the television series 24. Interesting, although I’m not much a fan of the show. In fact I don’t really watch much television.

The next carnival is the 90th Carnival of Debt Reduction, hosted over at No Credit Needed. Debt reduction is a very critical topic insofar as carrying debt reduces your ability to save and invest your hard earned money!

The third carnival is the Festival of Frugality number 77, hosted at My Two Dollars. Frugality is something I practice and preach to all of my friends – see what you can do to try and keep your costs down!

On Febuary 26, 2007, I had the fortune to be at the Universal Ampitheatre for a special interview with Walter Cronkite. Anderson Cooper is a journalist best known for hosting Anderson Cooper 360 on CNN, and Walter Cronkite was the host of CBS’s evening news for almost 20 years.

The first thing that struck me was both the age and youth of Walter Cronkite. He is 90 years old right now, had trouble walking into the auditorium and hearing Mr. Cooper, but his intellectual ability was still there! He was able to recount stories from 50 years ago with ease. My favorite story was when he parachuted from a plane over Europe with the 101st Airborne during WW II – absolutely incredible!

The following are my top 5 quotes from the interview.

1) On children wanting to grow up and become a politician, Anderson Cooper said

I think you should become a real person before a fake one

to a huge applause and laughter across the room (There were probably close to several thousand people in attendance). Thinking about that quote, it’s clear that Cooper is a cynic in his belief about the realness and empathy of today’s politicians. I can agree with him there – it’s obvious that most politicians are experts at seeming to empathize with the majority of voters. It’s definitely not easy to appeal to such a broad swath of people that make up the American electorate, so to become elected as President it’s clear that a politician might have to become an amorphous blob with constantly changing beliefs. However, most local politicians simply mirror the preferences of their constituents, who often hold fairly similar beliefs. Perhaps then all politicians start out as real people, but over time as they become more and more popular, they have to slowly become the everyman that can appeal to everyone. Therefore all politicians that seek greater power eventually have to become fake. Hmph.

2) Anderson Cooper said

You can’t allow fear to alter what you see

And unfortunately that is exactly what happened in the aftermath of September 11th, 2001. Our fear at being attacked led us to see Bush as a President who could lead us through the horrors of terrorism. Bush’s approval rating spiked at 90% in the immediate aftermath of September 11th (Source). Then the Bush administration used our fear of Al Qaeda and September 11th to link to Saddam Hussein and Iraq, which was then used to justify going to war in Iraq. The majority of American people now want to leave Iraq, but when the war began the majority wanted to remove Hussein from power. Clearly fear played a big part in shaping people’s opinions, and I hope that in the future people will be more cautious of whom they support and for what reasons.

3) Walter Cronkite on the war in Iraq:

I don’t think we should have gone in the first place.

Which was met by loud thunderous applause and a standing ovation, only met by the ovation that Cronkite received after the interview was over. The audience was mostly people in their 40s, 50s, and 60s, who had grown up watching Cronkite, and as a young person I felt like I really had missed something by not seeing his broadcasts. He may have been preaching to the choir in this case, but I also must mirror his beliefs. I think that quote stands on its own quite well.

4) When asked by Anderson Cooper, “Who would you most like to have interviewed”, Cronkite responded with:

I would have liked to interview Hitler, and find out what makes him tick

That quieted the audience in a hurry. When you think about it, that really would have been a great interview. Sure Hitler was a terrible man, but finding out the logic behind his madness might have helped the world notice someone else like him coming into power before it was too late.

5) Asked by Cooper for his thoughts on Fox News, Cronkite said

The ownership there puts me off

to raucous laughter by the audience, clearly no fan of Fox News. I’ll let you come up with your own reasons why.

For further reading check out the Wikipedia entry on Walter Cronkite and Anderson Cooper

Astronomers using NASA’s Spitzer Space Telescope have observed that planetary systems – dusty disks of asteroids, comets and possibly planets – are at least as abundant in twin-star systems as they are in those, like our own, with only one star. Since more than half of all stars are twins, or binaries, the finding suggests the universe is packed with planets that have two suns. Sunsets on some of those worlds would resemble the ones on Luke Skywalker’s planet, Tatooine, where two fiery balls dip below the horizon one by one.

Now obviously the people over there at NASA have somewhat of an infatuation with Star Wars, as the press release is replete with pictures from the movie and references to the planet of Tatooine and its twin star system. That is a pretty amazing thing to contemplate – that a scene from a science fiction movie that was conceived specifically because of its impossibility in our world may actually turn out to be true. I wonder how many other things that have been depicted in science fiction movies as fiction are in fact closer to science. I also wonder how many scientists at NASA grew up watching Star Wars and Star Trek, and were influenced by the various films and tv shows. A documentary that appeared on the History channel entitled How William Shatner Changed The World featured a discussion with Martin Cooper, inventor of the cell phone, who said the design of Star Trek’s communicator was his inspiration for the cell phone.

The second is an post over at Mind hacks entitled Violence linked to price of beer, believe it or not. The post states

A research report published in Applied Economics has found that the number of patients with violence-related injuries treated in hospital emergency rooms is related to the price of beer.

Here is a direct link to the study for you to read yourself, if you don’t believe me (And I wouldn’t blame you). This is a very interesting thought, as I’m sure we are all aware that alcohol consumption can lead towards violence, but who would have thought that cheaper prices for beer can be directly linked to increased violence. The study concludes that a major policy consideration should be raising the price of alcohol to lower violence. Now of course this is done in England, but I’m sure that things aren’t too different here. Californians recently voted against Proposition 86 in last November’s election, which would have added a $2.60 tax increase to the price of cigarettes. Jennifer Friedman, a spokeswoman for the Washington, D.C. nonprofit Tobacco-Free Kids, stated “For every 10 percent increase in the price of cigarettes, youth smoking is reduced by 7 percent. And overall cigarette consumption is reduced by 4 percent” (Link). Should we raise prices of alcohol and tobacco to keep people from being able to afford them? Is that a moral thing to do?

Oh and I recently setup some ads – and people have been telling me they’re all about how to please your man. Well I have no control over which ads are posted, but it is a little hilarious. Obviously they’re just looking at the name of the blog when deciding which ads to post. What ads have you seen?

Now there are many people that use time management programs such as Getting Things Done (GTD), but what I’m proposing is a system combining the concept of time management (whichever way you want to do it) with educating yourself about the world around you with the free time you create through excellently managing your time. So to start things off, you need to make sure none of your time is wasted. None of it. Now I understand that everybody needs recreation time to chill and relax (believe me!) so that should be considered a valid use of your time. What I want you to think about is those moments when you’re at home, your buddies have taken off, and you have nothing to do. Maybe you’ll just turn on the TV for an hour or two, flipping through channels in a desperate attempt to keep yourself entertained. Stop! This is the perfect moment to allow you to get started with your education. While there are some education shows on television (Discovery, National Geographic, CSPAN, etc.), the problem with television is that it’s a passive medium, not an active one like reading. If you feel like learning about trade deficits with China, you have to hope that something or someone is talking about it on some channel, which could take a while to find. Now if you instead decided ahead of time what you wanted to learn about (by itemizing a list of relevant topics for your current career and what was important to your life in general), you could use that list to prepare yourself for free time wisely.

Everybody learns differently, so here are a few suggestions for you learners out there.. If you prefer reading, then go take a look at your public library. In Los Angeles, the system is absolutely fabulous, letting you reserve books and send them to whichever library is closest to you. If you’re not sure where to start, let me recommend a few books. The Four Pillars of Investing by William Bernstein is one of the best financial do it yourself books I have ever read (and I’ve read a lot!). Revolutionary Wealth by Heidi and Alvin Toffler (author of Future Shock) is an excellent look at the way our society is shaping up to morph into during the 21st century. Check Amazon or other online booksellers that contain book reviews by customers for more ideas. The point is, there are more books than anyone could read in an entire lifetime available, and most of them for free for three whole weeks!

Image by: DongWoo Lee

If you don’t like reading, there’s another excellent way to continue learning – podcasts! Podcasts are those radio programs you can download off the Internet, through programs such as iTunes. You then transfer the mp3 files over to your mp3 player of choice, and voila! Radio shows that talk about what you want to hear. One of my favorite podcasts is Bloomberg on the Economy, a top notch discussion regarding a huge range of economic issues. The episodes are short (5-10 minutes), but there are dozens and dozens made per month. You can use a podcast directory such as Podcast.net to locate a podcast about anything your heart desires. But Ryle, I don’t have time to listen to my mp3 player all day, you say. I bet you do – a great many people commute to work everyday, and listen to either the radio or some music while driving. There’s nothing wrong with music, but think about switching to a podcast every once in a while. Again, the different is between a passive medium such as radio (where content is pushed to you), and an active medium such as listening to podcasts (where you choose what to hear) is huge! Another great idea would be to listen to university courses on your mp3 player while driving to work – believe it or not many schools post lectures in podcast form for free. Check out UC Berkeley Webcasts which has course podcasts for the current semester, all downloadable! Classes range from Economics to Biology to Philosophy to Legal Theory.

Things you read or hear can open your mind to new ideas, new ways of doing things, and altogether increase your understanding of the world around you. This is so important, and something so many people I know neglect, that I hope everyone reads this and walks away thinking about what they want to learn and what they can do to better themselves. I only touched on a few ways of continuing education, others include classes at your local community college, online courses, joining a group of people that meet up to discuss everything from politics to photography, or even reading blogs! The point is, keep your eyes and ears open and ready to learn, and you’ll be in a much better off position, both in terms of personal development and career development.

The book has 23 chapters and weighs in a little under 300 pages; not a one-day read but maybe a couple weekends would get the job done. There are the usual sections found in all financial books such as Asset Allocation, Diversification, Saving, Index Investing, etc. Where this book really shined are the discussions of taxes as they relate to investing and retirement planning. There are two whole chapters (Taxes part 1 and 2) dedicated to the topic, more so than most of the other financial books I have read. Of course, this may sound boring beyond belief, but taxes play an important part in determining just how much of that money you saved you actually get to keep. Another great section is saving for college, which clearly goes over the various vehicles that are available to both parents and kids to help save for a college education. I hadn’t even realized the plethora of options available; I’m sure my parents wish they had known about all these options before I went to college. (Too late! And UC Santa Cruz will never be the same!)

In the end, if you have more than a little interest in the DIY approach to managing your money, this book will be a wonderful resource and a great read. It’s not made for a great rich quick persona, rather for someone who understands that saving money and prudently investing it over a lifetime can easily turn you into a millionaire! (Like me, for instance). Don’t expect witty writing and funny prose; the writers present the information very matter-of-factly. Take the time to read and re-read this book and you’ll be much better off than before you had read it – and that’s my definition of a good book about investing.

The Bogleheads’ Guide to Investing

(Yes I make a few bucks if you buy the book – help a brotha out!)

Well I’ll tell you! If you’re not making more money each year, you’re going to be able to purchase fewer and fewer goods and services due to inflation. Inflation eats away at money’s purchasing power, and while inflation has hovered at figures between 2 and 3 % over the past few years, it certainly is having an affect. So if you need more money to purchase needed items, but you’re not earning more money, what are you going to turn to? If you said credit cards, then you’re just like most of America.

Credit card debt has been rising astronomically, with Wolff quoting figures that say 1 in every 7 dollars goes towards paying debt. In the same show during a later interview with Naomi Prins, Naomi mentioned that consumer debt has tripled in the last 10 years. Even worse, in 2005 Congress passed a bill designed to make it harder for consumers to file for bankruptcy, called the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. You can see how all of this wage stagnation and inflation can start a snowball effect that just gets worse and worse. This is a big reason why our lives are filled with so much stress and anxiety. America currently has the dubious distinction of having an extremely high divorce rate, between 40 and 50% of all marriages. One big reason could be the lack of purchasing power coupled with ever increasing debt placing undue hardship on relationships.

So what is there to do about all this rising debt, rising inflation, and not rising income. In my view, there is one solution that would dramatically help the American people: a solid financial education being made a required part of a high school curriculum. Too often, we are forced to sit through classes in high school that have absolutely no bearing on our future lives. I believe a simple one semester financial education on the basics of saving, taxes, loans, and other basic financial concepts would enormously help our children become familiar with important concepts in regards to money and not make the same mistakes we have. Simple lessons, such as don’t spend more with credit cards than you can afford to pay off each month, or it’s better to save up and buy your car outright instead of leasing it, could have a dramatic impact on the financial future of our younger generation.

Now this would obviously be hard to get approved by politicians, simply because it would be against the interests of the major credit card companies and banks, who all spend millions of dollars lobbying Congress to have their views known. Nobody said change was easy. However, in the long run, it could make a big different for a lot of people. Even if schools refused to setup this sort of class, perhaps a course could be initiated online that would be designed by the workers of America and whose children could participate for free. Maybe the next big website will be a collaborative learning center for children designed to make finance fun. What do you think?