Get Rich Slowly

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You’ve been watching Craigslist for a good deal on a hedge trimmer, but you just aren’t having any luck. By the time you find a good listing, it’s been up for an hour and the HedgeHog XR is long gone. You could sit and refresh the farm+garden category constantly, but that’s a waste of time. (Besides, what would your boss think?) Fortunately, there’s a better way.

Did you know it’s also possible to watch Craigslist searches via RSS feed?

Instead of subscribing to entire categories (and then having to wade through countless irrelevant results), you can subscribe to specific searches. Let’s say, for example, that I wanted to buy a Mini Cooper. Because it’s such a huge expense, I might want to wait for exactly the right car to come along. Instead of navigating to the Craigslist site a dozen times per day, I could simply subscribe to a search that features all the results I’m interested in. It’s easy to do.

Step One: Search Craigslist
Simply search for the item you want. If you need to refine the search by category or by price, enter the additional parameters. The results page will list the current matches.

Step Two: Subscribe to Feed
The final step has a tiny trick to it: You have to find the RSS feed. You can’t just use the RSS icon in your browser’s address bar. (Well, I can’t anyhow.) Instead, scroll to the bottom right corner of the page. There, tucked out of sight, is the RSS feed for your search.

Right-click on the icon to grab your feed!

This is an efficient way to grab great deals on cheap hedge trimmers or sports cars. But it can also be a handy tool for finding a job or apartment. Last February, Tim at the Seattle Bubble blog shared a great tip about how to use Craigslist and RSS to find a great rental.

(And don’t forget: Last year I shared 24 of my top Craigslist tips, tricks, and resources gleaned from several years of experience.)

Though Kris and I are fairly adept in the yard and garden, we sometimes struggle with home maintenance tasks. When I prune the camellia hedge too hard (as I did in April), it may look ugly for a few months, but I know that nature will erase my mistake in time. A house is less forgiving.

Still, with each passing year, I try to become a little more adept at do-it-yourself home maintenance. If a person is careful and thorough, even modest home-improvement skills can save money.

Though we recently paid a contractor to bring our home’s electrical system up to code, I spent part of this weekend wiring the light fixtures myself. I’m sure it takes me five times as long as a professional to hang a new lamp, but not only do I save some money, I also get a sense of satisfaction.

Over the past few days, I’ve had conversations with several people who are taking similar steps to save (or make) a little extra money. I enjoy these stories because they’re exactly the kinds of things I believe average people can (and should) do to improve their finances:

• My friends Andrew and Courtney participated in a neighborhood garage sale. They were able to purge their home of some clutter while earning $762 in much-needed cash.
• I learned that one friend told his co-workers about ING Direct. Some of them moved from no- or low-interest savings accounts to high-interest savings accounts.
• One of the women in my running group found a job closer to home. She had been spending $250/month on gasoline just for her commute. Now she can take public transportation. She’ll save time and money — plus her new job came with a small raise in pay.
• My friend Mike is interested in real-estate investing. He has other savings and investments, but is ready to diversify further. After doing some research, he and a partner are negotiating a deal on a rental property. If things go according to plan, this will add to his monthly cash flow.
• My sister-in-law cut her cable television to basic only and gave up her DVR. She’ll save $70/month or $840/year! (I think she’ll find the non-financial savings even greater. Since Kris and I cut back to basic cable, we watch less television and have more time for other things we’d like to do.)

Kris and I also talked with some friends about how we save money on food. We’ve been tracking how much our vegetable garden costs, for example, and are now beginning to reap the rewards. As another way to profit from our harvest, we’ve agreed to trade surplus raspberries (of which we’ll have many) for a friend’s surplus salad greens (which we cannot seem to grow).

Finally, I’ve been hearing news stories lately that indicate the price of beef (and other meat) is likely to increase substantially in coming months. Maybe this explains why so many people have been asking for tips on how to buy a side of beef — they want to lock in current prices. Kris and I continue to believe that the quality, convenience, and modest cost savings make purchasing beef in bulk a good deal, if you have a place to store it.

All of these anecdotes feature small ways to save money. Nobody will get rich — slowly or otherwise — by taking just one or two of these steps. But when combined together as part of an ongoing campaign of thrift, investing, and self-improvement, small changes like these can lead to a very large change indeed.

The Motley Fool is a web site devoted to helping average people make better investment and financial decisions. Recently, GRS forum administrator (and resident economist) Jericho Hill got a chance to visit The Motley Fool headquarters. This is part one of a report on his experience.

When I was in high school, I participated in my state’s stock market game. It was designed to introduce our economics class to the world of investing. That’s where I first heard of The Motley Fool, an upstart website for financial investors that went against the grain of having advisors manage your money. Their newsletter analyzed the advantages of managing your investments yourself, and advocated indexed mutual funds over managed funds.

So, when I received an invitation recently to visit the Fool Headquarters in Alexandria, VA for a focus group, I jumped at the chance. The purpose of the focus group was two-fold.

• One part of the meeting focused on The Motley Fool’s free CAPS service, a community stock-picking tool.
• The second part of the focus group dealt with how the individuals gathered used financial information, where they got it from, and what our views on investing were.

Motley Fool CAPS
Essentially, CAPS is an aggregator of information about stock picks from Motley Fool employees and readers. It is completely free to browse the ratings and blog postings of the CAPS users, to join, and to make picks of your own.

A very simple model of CAPS is that if a CAPS user is making stock picks that are beating the S&P 500 Index and/or other user’s recommendations, their rating rises. Over time, those users who are most consistently beating the market or other users begin to determine more of the ranking and rating of individual stocks.

This system is heavily reliant on users making informed stock picks based on information rather than speculation, and those users posting what facts led them to the recommendation. A recommendation without a summary explanation is not as informative as one that does carry an explanation.

CAPS is the Motley Fool’s attempt to quantitatively model The Wisdom of Crowds as popularized by James Surowiecki. The idea about crowds being better predictors than individuals in economics is an old one, dating back to Francis Galton’s observations on people betting on the weight of an ox at county fairs betting on the weight of an ox. He reported that the average of all the guesses was pretty close to being right.

With such a system, I surmised that CAPS would focus exclusively on U.S. and European stocks. With much of the world’s economic growth occurring in the developing world, how useful would CAPS be in identifying stocks for consideration in foreign markets?

Questions and answers
Prior to the focus group, I emailed back and forth with John Keeling of The Motley Fool about the CAPS system with a few specific questions.

Jericho: Many readers are interested in understanding more about emerging market stocks and funds, how those play into a portfolio, and how CAPS would help with that. My primary concern is that many potential investors are risk averse about emerging markets as the quality of information about stocks and emerging markets is not as high as it is for already developed markets.

John: It’s absolutely a valid concern with emerging markets. As you know, what’s attractive about these opportunities is the opportunity for increased earning potential, but this opportunity comes with increased risk of volatility within this portion of your portfolio. At this point, CAPS isn’t designed to provide answers for how much of your portfolio should be allocated to emerging markets. However, CAPS is a good place to look for international stocks. Currently, you’ll be limited to researching ADRs and internationally-focused ETFs, but over time we hope to support non-US exchanges directly.

Jericho: I was also curious how CAPS fits into the recommendation the Fool had made years ago, a recommendation echoed by Warren Buffett, Peter Bogle, and this website among others that most investors are better served to invest in index funds. Does the Fool still like index funds?

John: The Fool continues to recommends that people invest in index funds versus expensive actively managed alternatives, or paying a broker who may be more incentivized by commissions on trades than helping you to create the best portfolio strategy.

However, we also strongly encourage people to take charge of their investments directly—either their entire portfolio or a portion of it. Our mission is to help Fools understand that they can manage their investments and that in certain situations the individual investor can have advantages in the marketplace relative to Wall Street money managers.

First impressions
My overall impression of the CAPS system is that it is a useful place to gather information on a wide variety of stocks, and the amount of information that is freely available is overwhelming. For investors with experience, CAPS is a huge clearing house of market information and buzz for an unbeatable price (FREE!). The Buzzbox feature grabs a user’s attention and focuses on a particular stock, whilst numerous other boxes auto-refresh with new information seemingly every 30 seconds.

But, that also might be CAPS’ problem for the average or new investor; there’s simply too much activity on the front page for a newcomer to get their bearings. Further, I don’t find the top of the page summary of the day’s best movers particularly helpful, as most CAPS predictions are buy-and-hold calls for long-term periods. It would make more sense to have the highest rated CAPS users featured in that more prominent spot instead. I do like the Buzzbox feature as it does grab a user’s attention.

Next week, in the second part of his report, Jericho Hill will describe the results of the focus group discussion.

For the past six months, I’ve been applying Get Rich Slowly principles to physical fitness. By making small changes, I’ve lost seventeen pounds since January 1st. I’ve begun lifting weights regularly for the first time in my life. I’m even preparing for an October marathon!

I injured myself at the end of May, however, and spent the past few weeks recuperating. While waiting for my leg to heal, I turned to cycling to maintain my aerobic conditioning. And as any cyclist will tell you, regular riding means regular maintenance and repairs.

Bike repairs aren’t expensive in the grand scheme of things, but they still cost money. Rather than pay a shop to change a flat, why not learn to do it yourself? Ten years ago, when I was biking nearly every day, I could perform basic bicycle maintenance. Somewhere along the way, I’ve lost that skill. Fortunately, I recently discovered The Bicycle Tutor.

The Bicycle Tutor is the brainchild of Alex Ramon, a bicycle geek since early childhood. He’s worked as a mechanic in bike shops and he likes photography, so it seemed natural for him to start a site with videos to help others learn to fix their own bikes. So far he’s produced 31 short segments describing how to perform various maintenance and repair tasks.

Ramon’s tutorials cover simple things like:

• How to adjust your seat height and angle
• How to clean and lubricate a chain
• How to change a flat tire

But he also deals with advanced topics like how to replace cable housings. Here’s a video that explains how to tune up your bike:

Bicycle repair books are helpful, but these videos are easier for me to follow. And they’re free!

The Bicycle Tutor also allows users to download individual guides for $2 each, or to have unfettered access to all existing and future videos for a one-time payment of $25. Though I’m not ready to pay just yet, I can see the value of being able to plop a video tutorial onto my iPod and take it with me on a long ride.

If videos aren’t your style, or if you’re looking for additional information, try these sites:

• Bicycle maintenance guide and riding tips
• Park Tool bike repair how-to guide
• And, of course, the amazing web site of Sheldon Brown, who died in February.

Meanwhile, the doctor has given me the “all clear” to return to running; if things go well, I’ll actually rejoin my marathon training group this morning. But I’ve also got the biking bug again. I’m sure I’ll be returning to The Bicycle Tutor often in the future!

Remember my fender-bender with a rental car back in March? All of the paperwork finally went through and my insurance — both from the credit card and my normal automobile policy — will cover everything without me having to pay a dime. My insurance premium didn’t even increase (though it still may this autumn).

However, this whole process has been a colossal pain in the ass. It’s been such a bother that I may actually consider taking out the agency’s insurance next time I rent a car. Unfrugal? Perhaps. But a fellow’s got to figure his time is worth something.

Here are some personal finance stories from around the web:

While doing research for an upcoming article on grocery shopping, I found an old post at Wise Bread that offers tips for perimeter perusing at Target. Apparently Target stores have a regular system for putting stuff on sale. Savvy shoppers have deciphered the “code”, and know how to find secret deals. Linsey Knerl shares what she knows.

Eric recently pointed me to Retirement Revolution, a PBS segment on the history and future of retirement saving. I haven’t had time to watch this yet — did anyone else get a chance to see it?

Finally, Melinda submitted a site called Rather Be Shopping. She writes: “With the ridiculous gas costs, I am doing a lot more shopping online and found this site to have good coupons for free shipping and dollar-off deals. Plus, Kyle’s blog is hilarious and informative.” Ha! I’m amused because Kyle uses the same “frugality in practice” title headings that I do…

Last weekend, long-time GRS reader Vintek came to Portland. Kris and I joined him and his wife for a Saturday morning culinary tour. On our four-hour trek, we visited a bakery, a cooking store, and a brewery (where I drank beer for the first time — seriously). Along the way, I saw places and learned things about the city that were new to me. Afterward I realized how fun it would be to actually spend a weekend touring Portland as if I didn’t know anything about it, as if I were visiting it for the first time.

With record gas prices and soaring airfares, a hometown vacation is a great option for frugal folks. Last fall, Mrs. Micah noted that hometown tourism can save money and sanity because:

• You can save big on hotel rooms by not having any.
• You can pack meals from home.
• You save gas and other travel expenses.
• You stay in your comfort zone.
• You can use your knowledge of the area to pick cheap attractions.

But you don’t have to pinch pennies if you don’t want to. You’ll still save money even if you stay in a nice hotel, dine in fancy restaurants, see a show, and take a couple of tours. Because you have no travel costs, and because you’re familiar with the area, your vacation dollars go further in your own city.

Of course there are many options between frugality and luxury. Regardless how much you to choose to spend, here are some tips for enjoying a vacation close to home:

• Set a budget. Just as you’d use a normal vacation budget, set one for your stay-at-home getaway. Whether you opt to take the frugal approach or allow yourself to splurge as if you were traveling out of town, create a spending plan and stick to it.
• Grab a guidebook. Tourist guides contain great info about cheap eats, cool spots, and local history. You’ll find guidebooks at local book stores. Or if you’re a member of AAA, pick one up at the local office. (Better yet, borrow one from the public library!)
• Book a tour. I used to dismiss guided tours as worthless, but now I think they’re kind of fun. They can be a great way to get to know a city. Book a walking tour or bicycle tour of your town, and get ready to learn local history and trivia.

• Be adventurous. Try things you wouldn’t normally do. When Kris and I went to Alaska a few years ago, we took a kayak trip. We never do stuff like that. If we were to vacation in Portland, maybe we could go white-water rafting. Make your hometown more exciting by trying new things.
• Chat it up. Talk with the actual tourists. Ask them what they like about the city. Get recommendations for cheap or fun spots to visit. Answer their questions. Talking with tourists is a great way to see your surroundings with new eyes.
• Be unreachable. Pretend you’re vacationing out of town, even if you’re still in your own home. Ignore the phone. Don’t check e-mail. Forget the kids’ soccer games. A vacation is a time to relax, to forget the cares of the workaday world. This is true whether you’re on a Caribbean cruise or simply walking down Main Street.
• Swap houses. Have some like-minded friends? Swap houses for a week (or a weekend). This cheap change of scenery can make you feel like you’re in a completely different city. It may also give you insight into new neighborhoods you haven’t explored.
• Think outside the box. After living in the Portland area for forty years, I tend to have favorite routes, places, and things to do — this sort of vacation is an opportunity to explore! Ask your friends where they take out-of-town visitors. Use the events guide in your local paper to research activities. Keep a list of things you’d like to see and do.

Though this idea is novel to me, surely many people have taken hometown vacations in the past. I’d love to hear your impressions. Does it really save money? Was it a good way to learn about your city? What did you do to make the experience even more fun?

Photo by blmurch.

Christine just sent me a National Public Radio story about the frugal artists of New York City. Columbia University recently released a study of 213 visual artists over the age of 61. Their average income? $30,000 a year. According to the NPR story:

Most of them said they were satisfied with their lives. However, many reported that they also have had to make daily economic compromises. They don’t eat out, buy clothes at flea markets and rarely travel.

Many of these artists manage to make it in New York through frugal living. All they seem to need is some food, a roof overhead and the time and opportunity to practice their art.

This is a nice story, with some lovely bits in the interviews with individual artists. More than that, it was just the shot in the arm I needed.

Kris and I enjoy our lives. We have a lot, and we’re grateful. But our focus in the past year has been on frugality, on refining the art of buying only that which we will use or bring us pleasure.

Sometimes, though, I lose my focus. It’s been a struggle for me lately to remember that frugality is a good thing, that thrift is a responsible choice. I haven’t turned into a spendthrift or anything — I’ve just been paying too much attention to those who ask, “What is the point of amassing a fortune while living below your means? Why make sacrifices now for an uncertain future?”

When I hear stories like the one about the frugal artists in New York City, I’m reminded that frugality is a virtue, that it can allow people to pursue their dreams. I’ve always wanted to be a writer. Now I am. I never thought I’d be writing about personal finance (I thought I’d write science fiction novels), but to be honest: writing is writing. I love what I do. And one of the reasons I’m able to do it is because I’ve learned to live below my means.

There’s real value in boosting your income — I don’t deny that. But frugality is an important part of personal finance, too. And for each of us it’s different. I might be able to cut back on clothing and transportation, but I’ll probably always spend a lot on food. On the other hand, food may be a perfect place for you to cut costs, but maybe you’re not willing to compromise on your wardrobe.

Frugality and thrift allow us to emphasize those things that are most important in our lives. When we restrict our spending on the unimportant, we’re able to indulge ourselves on the things that matter most.

And what about sacrificing now when the future is so uncertain? I think this is a fallacy on a couple of levels. First of all, spending is not happiness. If it is, there’s something wrong. Second, most of us are likely to live a long time. Which would you rather do?

• Prepare for a long life by saving and investing, but then die tomorrow.
• Spend money you don’t have now, and then be unable to afford what you need when you’re older.

I’d prefer the former. Kris and I make sacrifices, but we’re not miserable. In fact, frugal folks are some of the happiest people I know. They spend money on the things that are important, and they save for the future.

That is the art of frugal living.

Earlier today I shared my review of 50 Prosperity Classics by Tom Butler-Bowdon. The author selected fifty important prosperity books and summarized them in just a few pages. For each book, he also provided a one-sentence capsule summary.

I think these one-sentence summaries are clever, so I contacted Butler-Bowdon for permission to reprint them, which he kindly granted. I’ve reproduced them below, grouping them into the book’s four broad categories. For additional information, I’ve linked to the Amazon page for each (though I encourage you to borrow the volumes that interest you from the public library).

Please note that I am not endorsing these books. I’m merely sharing the summaries with you for edification and entertainment.

Attracting wealth
These are books about mastering the inner game of wealth and abundance. Let me be blunt: Most of these are worthless to me. I know they’re valuable to some people, and Butler-Bowdon does a fine job of sharing the important bits, but I think they’re mostly hokum. They’re filled with passages like this:

Once the work is done on the mental plane, you can be assured your pictured good will manifest on the outer plane just as soon as the time, people, and events have arranged themselves accordingly.

I recognize that some people draw value from this sort of thing. I am not one of them. It’s because of the presence of so many books like this in 50 Prosperity Classics that I don’t value it as highly as 50 Success Classics.

• The Path To Prosperity by James Allen (1905) — You will only become truly prosperous when you have disciplined your mind and subjugated your negative emotions. Paradoxically, wealth (and happiness) comes most easily to those who forget the self in the service to others.
• Your Invisible Power by Genevieve Behrend (1921) — What we visualize tends to come into being. Use this invisible, but logical, power to turn any desire into reality.
• The Secret by Rhonda Byrne (2006) — You are a powerful magnet, attracting into your life the equivalent of whatever you are strongly feeling or thinking about, including thoughts of lack or prosperity. [my review]
• Secrets of the Millionaire Mind by T. Harv Eker (2005) — To obtain desired outer results, you must first master the inner game of wealth. [my review]
• Prosperity by Charles Fillmore (1936) — All wealth begins and ends with the spiritual Source, therefore gratitude for what we have is the master key to prosperity.
• Ask And It Is Given: Learning To Manifest Your Desires by Esther and Jerry Hicks (2004) — As long as you are in a state of mind and being that is ready to receive, you can have whatever you want.
• The Master Key to Riches by Napoleon Hill (1965) — The basic law of prosperity is that to receive, you must first provide something of great value.
• Open Your Mind To Prosperity by Catherine Ponder (1971) — In transforming your beliefs about spirituality and wealth, you can welcome great well being and prosperity into your life.
• The Abundance Book by John Randolph Price (1987) — Life is in part a test to see if we can learn the laws of abundance, specifically the law of ‘all sufficiency’.
• Creating Money: Keys to Abundance by Sanaya Roman & Duane Packer (1988) — If you know the universe to be an abundant place, you won’t fear not having the resources to pursue your purpose or mission in life.
• Do What You Love and the Money Will Follow by Marsha Sinetar (1987) — Though we can’t control when, the decision to do what we love sooner or later pays off.
• The Protestant Ethic and the Spirit of Capitalism by Max Weber (1905) — The spirit of capitalism is not greed and consumption, but the creation of order and the best use of resources. For those with a ‘calling’, there is no problem in reconciling the spiritual and economic aspects of life.

Creating Wealth
The books in this section contain the secrets of wealth creators. These are people who think big, take risks, and are willing to fail publicly. I like the top principle Butler-Bowdon extracted from these books:

The foundation of a prosperous life (combining material wealth, health, and mental wellbeing) is personal character, formed from self-control and cultivation of virtue. A person of integrity, trust, and good character is “bankable”; their riches evolve out of who they are as much as what they do.

Many of these titles are biographies. Others focus on wealth at an economic level instead of a personal level. Some are true classics.

• Multiple Streams of Income by Robert G. Allen (2005) — The prosperous do not depend on only once source of income, but grow orchards of ‘money trees’.
• The Art of Money-Getting by P.T. Barnum (1880) — There are no shortcuts to wealth, aside from right vocation, good character and perseverance — and don’t forget to advertise.
• Losing My Virginity by Richard Branson (2005) — Don’t be afraid to be different. On entering any new field or an industry, aim to really shake it up and provide new value.
• How To Get Rich by Felix Dennis (2006) — Be willing to fail in public, and you have jumped the hurdle holding most people back from getting rich.
• Innovation and Entrepreneurship by Peter Drucker (1985) — The purpose of entrepreneurship is to deliver new satisfaction and value, and is built on ‘unexpected successes’ that are quickly capitalized upon.
• Capitalism and Freedom by Milton Friedman (1962) — The free market, not government, ensures protection of individual rights and standards of quality, and delivers extraordinary prosperity for those who seek it.
• The World is Flat: A Brief History of the Twenty-first Century by Thomas L. Friedman (2005) — Technological advance is creating a ‘level playing field’ in which previously marginalized people and countries can play a competitive role in the world economy.
• Hard Drive: Bill Gates and the Making of the Microsoft Empire by James Wallace & Jim Erickson (1992) — In your field of work, see what can be achieved by ‘setting the standard’. With a big, clear vision in place, you can make the most of any opportunity that comes your way.
• The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It by Michael E Gerber (2001) — The key to real prosperity in business is to work on your enterprise, not in it.
• The One Minute Millionaire by Mark Victor Hansen & Robert G. Allen (2002) — All who become wealthy in the modern world know the power of leverage: using other people’s resources and technology to multiply the effect of what they do.
• Be My Guest by Conrad Hilton (1957) — Having a dream and thinking big are the basic elements of all great enterprises and fortunes.
• The Lazy Man’s Way To Riches by Joe Karbo (1973) — Mental conditioning is the foundation of wealth; once your goals are programmed in, success comes easily.
• The Art of the Start by Guy Kawasaki (2004) — Before anything else, the fundamental purpose in starting any new enterprise is to create meaning. Start off catering to a small market, and if what you are doing is worthwhile, other opportunities will emerge. [Guy Kawasaki's blog]
• God Wants You To Be Rich by Paul Zane Pilzer (1995) — God designed the universe as a super-abundant place, with technology as the engine that delivers the greatest benefits to the greatest number.
• Capitalism: The Unknown Ideal by Ayn Rand (1966) — In capitalism, wealth is created by free, individual minds with no coercion involved. This makes it a moral system of political economy.
• Business As Unusual: My Entrepreneurial Journey by Anita Roddick (2005) — When starting a business, do the opposite of the established industry. Make your business a powerful force for social change.
• Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time by Howard Schultz (1997) — Nothing great is ever achieved without people making frightening leaps of faith. Huge enterprises can be built by giving people a small moment of joy in their day.
• The Wealth of Nations by Adam Smith (1776) — The wealth of a nation is that of its people, not its government. Wealth is achieved through the division of their labor and the ever-greater specialization of their skills. The foundation of all future prosperity is current savings.
• The Art of the Deal by Donald Trump (1987) — To succeed in business, balance boldness and promotion with patience, caution and flexibility.

Managing wealth
These titles offer strategies for personal finance and investing. They’re the sorts of books I typically review here at Get Rich Slowly. They offer advice like:

• Live within your means.
• Budget and track your spending.
• Invest in low-cost index funds.
• Pay yourself first.

If I had written 50 Prosperity Classics, I would have included more books about managing wealth and far fewer about “attracting” it.

• The Automatic Millionaire by David Bach (2004) — There is no easier or surer way of attaining wealth than through the habit of ‘paying yourself first’ through automatic deductions. [my review]
• The Little Book of Common Sense Investing by John C. Bogle (2007) — If you invest in stocks at all, put your money in a fund that automatically owns a little bit of every company listed in a stock market. Over time, it is a sure and almost worry-free way to accumulate wealth.
• The Essays of Warren Buffett edited by Lawrence Cunningham (2003) — Don’t invest in stocks — invest in the businesses behind them. [Read Buffett's letters to shareholders for free online.]
• Your Money or Your Life by Joe Dominguez and Vicki Robin (1992) — By living on less, you can actually enjoy life more. [GRS review from Frykitty]
• The Intelligent Investor by Benjamin Graham (1949) — Don’t be someone who ‘knows the price of everything and the value of nothing’. In stock investing, consider yourself part owner of a company, not a trader.
• Cashflow Quadrant by Robert Kiyosaki (1998) — The mindset and income patterns of the rich are totally different to those of the poor and middle class. [My review of Kiyosaki's latest book]
• One Up On Wall Street by Peter Lynch (1989) — Alert investors who focus on the fundamentals and do not get swayed by market sentiments can outperform the professionals.
• Investing In Real Estate by Andrew McLean & Gary W. Eldred (2006) — Buying rental properties is one of the lowest risk and best performing forms of investment.
• How to Get Out of Debt, Stay Out of Debt & Live Prosperously by Jerrold Mundis (1988) — Your debts may seem insurmountable, but there is a well-worn, reliable path that can rescue you from despair.
• How I Turned $1,000 into Three Million in Real Estate — In My Spare Time by William Nickerson (1969) — Over a 20-year period, it is difficult not to get rich from real estate if you follow a simple formula.
• Women and Money by Suze Orman (2007) — To ensure their financial freedom, women need to have new respect for their relationship to money and defy cultural conditioning.
• Financial Peace Revisited by Dave Ramsey (2005) — More than money itself, what most people need is peace of mind. If you don’t take control of your finances, they will control you (no matter how much you earn). [My review of Ramsey's Total Money Makeover]
• The Millionaire Next Door by Thomas J. Stanley & William S. Danko (1996) — Most people become millionaires not by inheritance or winning the lottery, but earning a good income from work they enjoy, living well below their means and investing their savings. [My review]

Sharing wealth
The final set of books in 50 Prosperity Classics are about the flow of wealth and giving something back. I admit that this is a part of personal finance I haven’t explored as much as I should. I mentioned recently that I’m finally ready to do volunteer work for the first time in my life. Well, it’s only this year that I’ve begun to consider the importance of sharing wealth, too. I’m interested to read some of these books.

• The Gospel of Wealth by Andrew Carnegie (1899) — The wealth creator has a moral obligation to enrich the lives of others in whatever way they can.
• The Foundation: How Private Wealth is Changing the World by Joel Fleishman (2007) — Private wealth in the form of foundations is a valuable ‘third force’ in changing the world.
• Natural Capitalism: The Next Industrial Evolution by Paul Hawken, Amory B. Lovins, and L. Hunter Lovins (1999) — Genuine prosperity is not won at the expense of the Earth.
• The Billionaire Who Wasn’t by Conor O’Clery (2007) — Building a fortune can be exciting, but seeing it put to good use while you are alive brings even greater satisfaction.
• The Soul of Money by Lynne Twist (2003) — Generating, using and spending money in a way that is consistent with our deepest values has a healing effect not only on ourselves but the world.
• Banker To The Poor by Muhammad Yunus (1998) — If given the opportunity, the poorest will do what it takes to become prosperous. [My review]

A huge thank-you to author Tom Butler-Bowdon for not only allowing me to share these nutshell summaries with you, but also taking the time to compile them and send them to me himself. Far above and beyond the call of duty!

Two years ago I wrote a rave review of 50 Success Classics by Tom Butler-Bowdon. Its concept was simple: Butler-Bowdon selected fifty important books from success literature. He summarized each in only a few pages, distilling its key points. He also provided biographical information on the authors, and attempted to explain why each book was relevant in a Big Picture sort of way.

Over the past few years, Butler-Bowdon has written several similar books:

    

A Proven Formula
The entries in the “50 Classics” series follow a proven formula. Each chapter is devoted to a single book, and begins with a couple of short excerpts that capture the essence of the work. For example, in his summary of The Millionaire Next Door, Butler-Bowdon shares this quote:

What have we discovered in all our research? Mainly, that building wealth takes discipline, sacrifice, and hard work.

In addition to a three-to-five page commentary on each book, Butler-Bowdon provides one sentence summaries. For example, here’s The Millionaire Next Door “in a nutshell”:

Most people become millionaires not by inheritance or winning the lottery, but earning a good income from work they enjoy, living well below their means, and investing their savings.

Each chapter also provides biographical information on each author and a list of related works. (Here’s a chapter describing a biography of Warren Buffett from 50 Success Classics.) After all fifty book summaries, Butler-Bowdon shares a list of recurring themes he gleaned from his reading, as well as a list of fifty additional books on the subject.

Butler-Bowdon has a talent for extracting the key content from even the most difficult books, and making the information accessible to general readers. When you read one of his books, you’re immersed in a subject — you feel as if you really begin to understand it. He also does an excellent job of extracting meat from books that haven’t much to offer.

Because there’s no overall narrative thread in Butler-Bowdon’s books, the chapters can be read in any order. Or they can be skipped entirely. The books in the “50 Classics” series are excellent when read start-to-finish, but they also make good reading while on the bus or just before bed.

50 Prosperity Classics
The latest in the series is 50 Prosperity Classics. Butler-Bowdon provides commentaries on familiar titles such as:

• Your Money or Your Life by Joe Dominguez & Vicki Robin
• The Automatic Millionaire by David Bach
• The Millionaire Next Door by Thomas Stanley & William Danko
• The Intelligent Investor by Benjamin Graham
• The Art of the Deal by Donald Trump

But the focus here isn’t just on accumulating money. Though many of these books are about wealth, Butler-Bowdon is more concerned with the broader notion of prosperity. He writes:

Whereas wealth is simply the possession of money or assets, or the process of getting more and keeping more for ourselves, prosperity is the state of “flourishing, thriving, or succeeding.” In short, wealth is about money but prosperity is about life, taking in the wider ideas of good fortune, abundance, and wellbeing.

Butler-Bowdon believes there are four primary ways in which we relate to wealth. He’s divided the fifty prosperity classics into these categories:

• Attract it — “Mastering the inner game of wealth and abundance.” Twelve titles including The Secret (my review), Do What You Love and the Money Will Follow, and Secrets of the Millionaire Mind (my review).
• Create it — “Secrets of the wealth creator.” Eighteen titles including biographies of Bill Gates, Conrad Hilton, Donald Trump, and Richard Branson.
• Manage it — “Strategies of personal finance and investing.” Thirteen familiar titles from authors like Suze Orman, Dave Ramsey, Robert Kiyosaki, and John Bogle.
• Share it — “The flow of wealth and giving something back.” Six books including Muhammad Yunus’ Banker to the Poor (my review).

There are no details about investment strategies here. Nor will you find a discussion of asset allocation or tips on frugality. Instead, the author explores large concepts, exploring the inner game and the outer game of wealth. For example, the commentary on John Bogle’s The Little Book of Common Sense Investing leaves out the numbers and charts found in the actual book, and instead offers the broader conclusion — invest in index funds — in a way that makes sense to the average reader.

Prosperity and Success
50 Prosperity Classics follows the same formula as the previous volumes in the series, and in that respect it succeeds admirably. To be honest, this is a book I would love to have written. From its 300 pages, an active reader can draw a lifetime of financial skills. Still, there are some chapters that aren’t much use to me. I’m not much interested in the notion of “attracting” prosperity, and would rather have read commentaries on other titles. The beauty of this book’s format, however, is that it’s easy to skip a summary that doesn’t interest me and move on to the next.

If you’ve been wanting to explore books about prosperity, but don’t known where to begin, 50 Prosperity Classics is an excellent choice. By reading this book you’ll not only gain an overview of the genre’s big ideas, but you’ll also be able to pick titles that interest you for further reading. If I had to recommend one title from this series, however, it’d be 50 Success Classics. That’s a book I can read again and again and again.

I hate junk mail.

As a test once, I signed up for a subscription to Entertainment Weekly using the name of our cat, Simon. Sure enough, Simon started to receive his very own junk mail — not that he could read it. When we moved in 2004, Simon stopped receiving mail.

Simon never received any credit card offers, but I suspect that’s just because we never gave it enough time. CBS 2 Chicago has a story of a five-year-old who applied for a credit card — and got it.

An Aurora mom was somewhat amused last April when she received a credit card application addressed to her then-5-year-old son. As a test she had young Bennett Christiansen fill out the application and she sent it in. She was stunned when Bank of America sent her kid a shiny new card with a $600 limit.

Bennett even put his real birthday (in 2002) and income ($0), but still was approved. If Bank of America will give a six-year-old a credit card, then surely they’ll give one to my cat, right? After all, Simon has wants needs: tuna, tuna, and more tuna.

Though this story is amusing, it demonstrates how lax banks can be when issuing credit cards. They don’t have the consumer’s best interest at heart. Their goal is to snag as many customers as possible because they know a large portion of them will carry balances and pay monthly finance charges. It’s a numbers game. The more people they can get to sign up, the more debtors they’ll have as an income source. They don’t even care if the people are real:

Remember that you can use services like OptOutPrescreen.com and GreenDimes to eliminate unsolicited credit card offers. This keeps you (or your five-year-old — or your cat) from temptation and reduces the chance of identity theft.

[CBS 2 Chicago: Mom shocked when 6-year-old gets credit card, via The Consumerist and Matildaben]