The article’s title is sort of a click-bait because the investments I’m talking about are not the ones you’re expecting to see.
The best investments I’ve made so far this year are not stocks, ETFs, bonds, gold, crypto or any crowd investment options on the market.
It’s reading books.
There’s no greater long-term value investment than investing in your education. I believe books should be part of everyone’s portfolio. It doesn’t matter from what domain are the books from, the more topics you touch the easier it will become to see the bigger picture in more things in everyday life.
Below is a list of top 10 books I’ve read this year and I believe they’ve influenced me the most.
Lords of Finance – by Liaquat Ahamed
Lords of Finance mixes history with economics with entertainment under the same umbrella. It’s a book about bankers and how the decisions of the heads of the central banks of the UK, France, Germany and of the US Federal Reserve influence in the decisive way the world economy at the beginning of the 20th century and how these lead to the Great Depression at the end of the 1920s and how they also planted the seeds for the second world war. It also brings some light into how the finance world functions today and how it was influenced by the decisions taken a century ago.
The Sixth Extinction – by Elizabeth Kolbert
The sixth extinction is talking about the “Anthropocene” age, the current era where the environment is predominantly affected by the activity of humans. It’s not the typical “global warming” cry, this book doesn’t talk only about how burning fossil fuel and cutting forests affects the climate. It also brings up other factors that were not present in other geological eras, like the speed of travel with which humans travel, and how this affects the environment. How species that live in one environment get easily introduced in new habitats and become the predominant species there because they don’t have natural predators and how they also destroy the local fauna.
The book provides an objective point of view for the “what is happening with our planet” question. The examples from current times as well as from the prehistoric era (with the help of geological evidence) are very well documented and insightful.
The bankers’ new clothes – by Anat Admati, Martin Hellwig
To sum it up, The bankers’ new clothes is a rant on how the banking system works and how the 2008 bailouts and the measures taken after the crisis are not sufficient and how the banking system is still fragile. It also provides some measures banking system should take to become more robust. This book gave me a new perspective on why fintech companies are so successful today. It’s not only because of new regulations that allowed them to exist, and not only because the technology exists today and it’s easy to start such a company. It’s also because the banking system is so rigid and bloated that it’s not that hard to compete with it on specific market niches and get better results.
The 4-hour work week – by Timothy Ferriss
The 4-hour work week is one of the books that made me rethink my life choices. Especially when it comes to the “deferred life-plan” we usually follow. We postpone vacations, changing jobs we don’t like, following a passion, thinking we’ll have all the time in the world to do it next year. And we follow the path everybody else follows: go to work, retire and eventually fade away from the memory of others. That’s one grim look at how the life works. I don’t exactly need a “4-hour” work week, because I like to work, and I don’t need to trick myself that work doesn’t feel like work if you do what you love. But this book inspired me to take a 6-month vacation at the beginning of the next year and travel around the world. I’ve even started a blog where for now I cover my planning and preparation for the upcoming trip, but I’m sure it will get a lot more interesting next year.
Poor Economics – by Abhijit V. Banerjee
Did you ever see a drunk homeless person and thought you would not give them money because they’d be wasting it on drinking instead of making their life better? Did you ever see poor people that drank, or smoked, or more generally spent money on stuff that wouldn’t have any long-term value and you thought this is the reason they’re poor? Poor Economics brings insight into how poor people think and their rationale behind everyday decisions. Through localized studies, it shows how help can affect the poor and what measures work and why others don’t.
It also describes how the billions and billions of dollars spent by NGOs and other charitable organizations don’t help the poor because these organizations are being lazy and their work is usually based on assumptions and generalizations that have nothing to do with the lives of the people they’re trying to help.
It’s a good book to read because it brings you down to earth and helps you understand the world around you.
Peak – by Anders Ericsson and Robert Pool
Peak is the best book that exists about mastering a skill I could find. Anders Ericsson talks in this book only about his experiments. He tries to prove that there’s no such thing as natural talent and that it all comes down to lots of hard work. Furthermore, just hard work is not enough, it needs to be deliberate and it needs to improve the areas that are lacking. Lots of books on the market talking about mastering a skill are based on Anders’ book. If you only read one, this is the one you should read.
Thank You For Arguing – by Jay Heinrichs
Thank you for arguing is trying to convince you that through the lost art of rhetoric and argumentation we can gain a better understanding of the world. It dissects the anatomy of an argument and provides details on the style of the argument you should choose depending on the end goal you follow. It has great practical value and can help improve immensely your day to day life and interactions with others. What I liked about this book is that while it mainly touches the same subjects like all the “Emotional Intelligence” fads that polluted the best-sellers markets of the last 10 years, it does this in a structured and scientific way and it lets you come to your own conclusions after reading it.
Why nations fail – Daren Acemoglu, James A. Robinson
It’s not luck, or natural resources, or geography that necessarily make nations rich or poor. Why nations fail describes how the lack of democracy and the level of corruption in a country can make that country successful or not. Through a series of case studies across the world and the history, this book analyses the factors that made some nations very successful, the framework that enabled them to do so, and also what changed and made them fail.
One example is the Republic of Venice in the 1100s. Because everybody could get rich by risking their life and trade across the world, the Republic flourished. The council that ruled the Republic was elected every few years and successful merchants could be part of the council. And then a few centuries later it all goes downhill, the council seats become hereditary, then only certain families can be part of the council, and the trading licenses are given to only a few wealthy families and the means for acquiring wealth are limited to only a few. Those few get richer, but the Republic becomes weaker because now it lacks the strength of the many and in the end, Venice loses the hegemony it had on the East Mediterranean Sea.
For a nation to succeed, the few that hold the power at one moment need to act against their interests and provide a framework where others can become successful and upset the balance of power, in this way diminishing their current power.
Besides being entertaining and informative, this book also gave me a bit of insight into today’s economies, where do they come from and what state’s they’re in, well beyond any economic macro indicators could do.
Rubicon – by Tom Holland
I’m a history buff and this book was an interesting incursion into the Roman politics that led to the end of the Republic and the beginning of the Roman Empire. Rubicon follows the Roman Senate politics along 2 generations. In the beginning, the Senate is all-powerful, but a series of civil wars make generals understand how important is to have an army at the gates of Rome and put pressure on the Republic to follow their own agenda. When Caesar passes the Rubicon with his legions, it marks a new era for Rome, where the Senate’s role would be purely ceremonial.
By all means, Rome was not a democracy, but this book is a good insight on how small changes can lead from the rule of the many (in this case the Roman Senate) to the rule of one. It makes you think how fragile the system we live in really is.
The plot against America – Philip Roth
The plot against America led me to acquire a new active interest in alternate history books. It was followed quickly by other books in the genre: 11/22/63 by Stephen King, The Man in the High Castle by Philip K. Dick, The Underground Railroad by Colson Whitehead, What if? By Robert Cowley. It follows a scenario where Charles Lindbergh defeats Roosevelt in the 1940 presidential election and because he’s sympathetic to the Nazis, the US doesn’t enter World War II against Germany.
Next on the reading list
For this Christmas, I’ll entertain myself with the following 4 books.
Risk Savvy – by Gerd Gigerenzer
Risk Savvy is a book about how to make better decisions, how to understand the risk and how to develop enough tools to navigate this complex world without being an “expert in everything”. (Update May 2019: This was such a bad book to read. 300 pages talking about common sense things everybody knows. Such a waste of paper!)
Unlabel: Selling you without selling out – by Mark Ecko
I’ll read Mark Ecko’s formula for building an authentic brand or business and hopefully, it will give me some great ideas. (Update May 2019: I really tried to read this book. It was mostly pictures and a bit of talking about how great Mark Ecko is. I had to abandon it, as I literally felt how I was wasting my life by opening that book.)
The intelligent investor – by Benjamin Graham
I’ve read so much from second-hand sources about value investing and how we should all follow Benjamin Graham’s approach that I am compelled to read the book by myself and draw my own conclusion.
A walk in the woods – by Bill Bryson
I’ll follow Bill Bryson hiking on the 2000 miles of the Appalachian Trail. It might get me new ideas for a new long vacation.
Some final words
I live in a poor country where for most people book reading is not their favourite activity. Only 6% of people read books regularly, and at EU level this is one of the worst percentages. More than 40% of the 15-year old kids in our schools are functional analphabets, meaning they only have basic reading and writing skills, enough to get by in the day to day life.
I believe one of the main reason my country is poor is that we don’t value education enough. And we don’t value enough the importance of reading. Most people fail to see the value in reading books when they don’t know if they’ll have anything to eat tomorrow.
Books are expensive, and on the short-term, there’s no visible return on investment. A 10 EUR book weighs different on the budget of somebody from Luxembourg than on the budget of someone from Romania. I buy my books from Amazon mainly because they’re cheaper than the ones I find in the libraries from my city.
I also have a city library permit – that is free, and even though I can’t find all the books there, it still has a good selection to choose from. I also have a Bookster subscription, so for all of you that are fortunate (or unfortunate) to work in the corporate world, I recommend you to use it or any other similar product available in your country. If your company doesn’t have a contract with Bookster, you should ask them to make one. It brings a lot more value than keeping a measly internal company library with 50 outdated books nobody reads but look nice on a shelf.
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