Book review: Billionaire in Training by Bradley Sugars

Billionaire in Training (Because Millionaire just isn’t rich enough…) by Bradley J Sugars

Synopsis:
As the title suggests, this book is focused on creating and continuously increasing your wealth. The author explains important concepts such as cash-flow and passive income and looks at different stages in business and how people at those stages can improve their wealth situation. The method this book uses is on creating a business and building that business into a profitable one so you can sell and repeat the process. The author looks at ‘five levels of entrepreneurs’ and how each level thinks about money and how they can reach the next level.

What I gained from reading this book:
I had low expectations for this book based on the title. I expected another book on how to use massive amounts of debt and buy foreclosed properties to build wealth. I was pleasantly surprised that this was not the case. After the first few chapters I was worried it was just another marketing hype book focused on selling seminars and other books by the author. While this is partly true, I did find valuable information that really made me think about my current situation and why I need to do something about it.

First, the negatives. In one way, this book is a vehicle the author uses to sell his workshops, business coaching services, books and a board game. Almost every chapter you are reminded that you can contact an ‘ACTION business coach’ to get you on track to wealth. For some people, it will be too much marketing but for me it wasn’t enough to annoy me. It’s actually interesting to read the book to see the techniques the author uses to promote his other products and services. After all, his cross product selling is one of the reasons he is rich! One technique that is commonly (or overly) used is when the author uses uppercase type to highlight certain words. Turn to any page and you will without a doubt find words in uppercase like RICH, LEAD, PASSIVE, WEALTH, MAKE MONEY WITH MONEY, CASH etc. Whenever I see this it puts me off because it has been abused so many times by bad salespeople. If I make EVERY other WORD uppercase, it REALLY gets ANNOYING to read. Also, you begin to THINK that everything you are READING is only HYPE and SALES PITCH. But in this case, I didn’t believe it was hype.

Another thing that bothered me was how many times the author would say something like “Later I’ll show you how to…” “More on this later” “I’ll go into more detail later”. It makes the whole book sound like a sales pitch. Most people will probably be fine with that style of writing, but it bothered me.

Now for the positives. I found most of the points the author made had excellent foundation and really made sense. For example, the author suggests that you do not create a business in a field you excel in, which is something most people would think the opposite. So if you can give a good haircut, you shouldn’t start a hairdressing business. Why? Because instead of working on the business and thinking of ways to increase cash-flow and profitability, you will be stuck cutting hair. Also, because of your skill and knowledge as a hairdresser, you won’t be happy with the other employee’s haircutting skills so you won’t be able to move away from that position yourself. In essence, you will be stuck with a job instead of running a business. Points like these really give insight as to why so many businesses fail. I really felt that most of the points were very logical. Simple observations like how an employee ‘earns’ money while a manager ‘makes’ money really give good insight to how people in different positions think about money.

Overall, I felt I really learned something from this book and will really try to use the concepts in my life.

As a side note, I did notice after reading it that although the title reads “Billionaire in Training”, the word Billionaire wasn’t used once in the entire book. Or at least I never saw it. Which makes me believe the title was chosen for marketing reasons, not to describe the content. Hmm.. Bit misleading but still a good book.

Positives:
Many of the points make sense. Some of the points are very unique and stand against popular belief, which gives a great way to look at your current situation and how to improve it.

Negatives:
One of the purposes of the book is to promote other products and services. Some people may find this annoying as it does distract from the real information. The use of uppercase to highlight words is overused and cheapens what the author is saying.

Recommended for: People wanting to quit being an employee
This book gives an excellent overview on how to move from being an employee to a self-employed person to a manager all the way to an Entrepreneur. While the book may be light on information, the information it does provide is very thought provoking and logical.

Genre: Wealth

Overall rating: 7 out of 10 stars



Australians can buy the book by clicking the picture below:


Where to from here:
In this book the author mentions The E-Myth Revisited and I suggest this book after you have read this one. The book also has a recommended reading list of books I have not read yet but would be a good source to continue on the topic. It should be noted that 8 out of 17 of the books listed in this list is by Brad Sugars - another example of cross selling in action.

If you have read this book, feel free to give it your own rating by posting a comment below.

Book review: The little book that beats the market by Joel Greenblatt

The little book that beats the market – Joel Greenblatt

Synopsis:
This book explains an extremely simple strategy that the author suggests will beat the market return. The author starts by telling a story of a boy who sells packs of gum. The story explains in very simple terms, how to correctly value a business. From the first chapter onwards, the author uses very simple story-telling to explain finance concepts and principles. Each chapter adds to the previous ones and becomes more complex and detailed. All this storytelling is used to give the reader an understanding of why the author’s ‘Magic Formula’ works in beating the market.
The ‘Magic Formula’ is a very simple concept in finance but the author holds that it has beaten the market returns from the past 17 years and there is little reason why it will not continue to do so. Towards the end of the book the formula is explained in detail with enough information for the average investor to apply it. The appendix is full of detailed information on the formula.

What I gained from reading this book:
I picked up this book with great scepticism. My finance lecturers told me that people cannot consistently beat the market (the Efficient Market Hypothesis). I decided to give it a read. The way the book is written is very unusual for an investment book. The best way to describe it would be that it was written for a young teenager. No jargon or excessive words. The author doesn’t take himself too seriously by adding little jokes throughout the book. All in all it was an interesting read.
With the actual ‘Magic Formula’, the author does a fantastic job in convincing the reader that the strategy is solid and will continue to give fantastic results in the future. As this book was written in late 2005, we have the ability to see how it has performed since then. After some research I have found quite a few blogs and website where people report their results using the ‘magic formula’. Some people have had poor results as it underperformed while others have held that it has been outperforming the market. At the moment I am doing my own testing but I think it is still too soon to say whether it will continue to show impressive results or not. My instincts tell me this is another ‘too good to be true’, but on the other hand, I wouldn’t be surprised if it does consistently outperform the market because of the logic behind the strategy.
I will continue to study this method and will report back if I come to any conclusion.

Positives:
Well written and easy to understand whether you have a background in finance or not. Important explanations on value, price and earnings. Very convincing explanations and results.

Negatives:
May not continue to outperform the market in the future. Seems a bit too good to be true.
Recommended for: Investors
Anybody who is interested in investing in the share market should have a read of this book. Even if you don’t choose to invest by using the method in the book, the explanations on finance concepts are easy enough for a child to grasp.

Genre: Investments

Overall rating: 8 out of 10 stars


Australians can buy the book by clicking the picture below:


Where to from here:
More detailed books on investing that I recommend are:
The four pillars of investing – William Bernstein
Five key lessons from money managers – Scott Kays

If you have read this book, feel free to give it your own rating by posting a comment below. If you have invested following this method, please let me know how it has gone for you.

What books do you read?

Hi all,

I hope you have found my reviews useful. If you have any recommendations for educational books or have read one worth mentioning, please leave a comment here on the book and your rating. It would be great to see what books you read and find useful.

More reviews to come,

Aaron

Book review: The ultimate depression survival guide by Martin Weiss

The Ultimate Depression Survival Guide: Protect your savings, boost your income and grow wealthy even in the worst of times – Martin Weiss

Synopsis:
This book takes on two tasks: to analyse the current economic situation and see why a depression is likely to happen, and to give advice on how to protect your financial position if a depression does occur. The book starts by explaining why a depression is inevitable and explains why the government won’t be able to stop it from happening. In each chapter, step by step advice is given under topics such as “how to protect your job in bad times”, “How to go for profits in a down market”.

Many of the problems in the current financial system are identified and the author strongly makes his point that things will only get worse. Many comparisons are given between the First Great Depression from 1929 and the current situation to help explain why a Second Great Depression is inevitable. The author uses notes from his father to explain what it was like in the first depression.

What I gained from reading this book:
I read this book after seeing it on Amazon and the high average rating it received from the readers. To be completely honest, I was grossly disappointed by this book from cover to cover. My instincts were telling me the whole time that the author’s points were biased and not explained objectively. The author strongly emphasises that a severe depression worse than the ‘First Great Depression’ is inevitable. While he may have good reasons to say this, everybody knows that nothing in this world is 100% certain. To say that something is inevitable raises a red flag in my mind.

Another problem I had with this book was the advice given. Basically the author says to completely remove your money from real estate, stocks and even bank deposits and hold either cash or Treasury Bills. I was shocked at this advice. Then I remembered the title of the book “depression survival guide”. If a depression does occur, the people who follow this advice will be very glad they did. What the author fails to mention is that if a depression does not occur or if the global economy starts to recover (whatever the small chance), the people who followed this advice will deeply regret it.

I like to think of the advice as betting on a horse race. Imagine betting all your money on the horse named ‘Depression’. If ‘Depression’ wins the race, you win. If another horse wins, say ‘Recovery’ or even the least likely, ‘Expansion’, you lose big time. This book is betting that the economy will tank. Remember the saying not to have all your ‘eggs in one basket’? Well this book completely ignores that advice.

I also found myself frustrated with many parts in the book where the author would exaggerate problems by using bold or italic writing and using over the top adjectives. Phrases such as ‘financial war zone’, ‘crumbling economy’, or ‘jump from the frying pan into the fire’ really demonstrate the tone of the entire book. This style of writing felt very ‘snake oil salesperson’ to me and I am left feeling very sceptical. Everything seems to be either one extreme or another. For example, in the chapter entitled ‘How to escape the housing nightmare’, the headings use words such as: mania, corruption, fraud, cover-ups, deceptions, collapse! to tell you why you should sell. An objective discussion wouldn’t use such fear provoking words. The entire book is filled with over-the-top hyperbole that I can see will do nothing but instil fear in many people. Personally, this type of writing destroyed any confidence I had in the writer and his points.

When I finished the book, the first thing I thought to myself was that in ten years, either the author will be celebrated as a visionary, or he will be forgotten like so many other people yelling that ‘the sky is falling’. At the moment, many people are convinced that the author is right on the money.
So what did I gain from this book? I gained a basic understanding on how things have become the way they are now and an idea of what I could do if a depression does occur.

Positives:
Delivers what it promises: a clear guide to ‘survive in a depression’. Very insightful explanations on the current bailouts and how the economy has come to this situation. Provides good advice for those who are worried that they will not be able to survive a depression.

Negatives:
Assumes that a depression will happen and bases the advice solely on that prediction. Uses so much hyperbole it almost sounds like listening to a salesperson make a pitch. Does not explain the risks in the advice given and takes a very biased position throughout the book.

Recommended for: People who are worried about the possibility of a depression.
If you don’t think you would be able to financially survive a depression, this book gives you advice what to do.
If you are wondering why the situation is so bad and why it could get worse, the book provides in-depth explanations. Although I really disliked this book, I know that everybody needs to consider the possibility (not inevitability) of a depression.
Just remember, although I didn’t enjoy the book, many other people did, so feel free to read the reviews by people on Amazon to gain a different perspective.

Genre: Personal finance

Overall rating: 5 out of 10 stars



Australians can buy the book by clicking the picture below:


Where to from here:
I recommend the following book that gives fantastic advice on investing:
The four pillars of investing by William Bernstein

If you have read this book, feel free to leave a comment on your thoughts.

Book review: The four pillars of investing by William Bernstein

The four pillars of investing: Lessons for building a winning portfolio – William Bernstein

Synopsis:
This book explains how to build an effective portfolio in plain English. The book is split into four parts (pillars): Theory of investing, History of investing, Psychology of investing and the Business of investing. The book explains why an understanding of these four key areas is crucial to achieve good returns. Examples are given for different people and how they would allocate their capital to different assets and why.
Many areas are discussed such as the history of bubbles and collapses, behavioural finance, the pitfalls of mutual funds and why your broker is not your buddy.

What I gained from reading this book:
I can easily say that this is the best investment book I have read to date. This is a big statement because I have read many investment books during my time at university studying finance. If I had to choose between reading four finance books that I read during university or this book, I would read this book. There is so much insight and valuable wisdom.
The great thing about this book is that you don’t have to be an experienced investor to follow these principles. The author clearly explains the process and why each point is important. So many other books fail to cover both aspects. The advice given in this book is top class and even top investors such as Warren Buffett recommend people do the same. Not only does this book explain why the advice is sensible, but it explains why the advice given by journalists, brokers and mutual funds shouldn’t be followed.
The overall gain I received from this book was a clear understanding of the industry, the markets and exactly what I should do to achieve the best results.

Positives:
Fantastic advice for all investors. The entire book is written in a very logical way and is very easy to understand. Important insight into the investment industry and why the advice given by brokers and advisors should be ignored.

Negatives:
I wish this book was longer and more in depth.

Recommended for: Everybody
I whole heartedly recommend this book for everybody. Not only is it easy to understand, but everybody can follow the advice and construct an effective portfolio from it.

Genre: Investments

Overall rating: 10 out of 10 stars

Australians can buy the book by clicking the picture below:

Where to from here:
If you are interested to hear from a different viewpoint on investing try this book:
Five key lessons from top money managers by Scott Kays

Book review: Five key lessons from top money managers by Scott Kays

Five key lessons from top money managers – Scott Kays

Synopsis:
This book is based from the information received in interviews between the author and five well known money managers: Bill Nygren, Andy Stephens, Christopher Davis, Bill Fries, and John Calamos. Discussing investment principles and valuation methods, the author has come up with five key points that each of the five money manager follows. The concepts such as intrinsic value and developing a valuation model are discussed in detail.
Basic finance principles such as the time value of money, dividend discount model and Internal Rate of Return (IRR) are also discussed with examples. Examples are used to explain how to use these tools in real life such as analysis of a situation when Home Depot’s stock provided a significant opportunity to profit. The process of screening stocks to match certain criteria is explained in great detail.

What I gained from reading this book:
This book was fantastic to read as it gave very clear analysis of the methods used by money managers and how to put together your own investment system. The principles are very clearly explained (better than many of my finance lecturers did) and very useful. The concept of valuation is extremely important but many people neglect to learn about it (think of all the investors at the peak of the dot-com bubble).

The chapters are very clear and well explained. I gained a lot from the step by step explanations and examples. This book taught me how to compute IRR better than my second year finance lecturer did. This book not only gave me valuable information that I can use with my own investments, but it also made my finance studies a lot easier. Although I don’t plan on investing in a way that is explained in this book, knowing the principles and how to correctly apply them is extremely valuable. I think anybody who is interested in investing can gain from this book as I have.

Positives:
Very clear examples and explanations. The information provided can be very useful in deciding whether other investments are worthwhile or not.
Detailed explanation on creating your own investment strategy and what should be included. Explains how by using a simplified strategy. Very easy to learn thanks to the author’s clarity.

Negatives:
Although the concept of valuation is simple, it is quite hard to come up with reliable valuations for companies in real life. This isn’t a negative for the book because the author explains the problem. I am just making this clear for those who may think it is easy to apply what it taught. I don’t really have any negatives for this book. Well, I wish it was longer. But there are plenty of other books to add to this information.

Recommended for: People interested in investments
I recommend this book for people who are serious about investing on their own. I gained more from this book than quite a few finance units I took at university. The small price tag of this book compared to the high cost of university fees makes this book priceless. The concepts were explained better in the book compared to my university lecturers.
By understanding what is needed to create your own investment strategy, you are more likely to succeed. In other words, if you don’t know what this book is teaching, you are at a disadvantage.

Genre: Investments

Overall rating: 8 out of 10 stars

Australians can buy the book by clicking the picture below: