Basic Economics by Thomas Sowell

Continuing my efforts to better understand the economy as a whole, and make up for some of the things I didn’t study during undergrad, I spent a pleasant hour flipping through various books on the economy. This one seemed the most complete and most basic at the same time.

Six months later, I finally finished The Big Book of Economics! At six hundred pages of not-that-dense economic theory for beginners, this one took a while. Certainly not as long as if I’d read a complex book of economic theory for smart people, but still an accomplishment of sorts.

Dr. Sowell of Stanford University is a dedicated scholar of Milton Friedman and similar schools of thought. He’s bright and his style feels approachable without being overly dimmed down.

In twenty-five chapters he covers such topics as Prices & Markets, Industry & Commerce, Work & Pay, Time & Risk, National Economies, International Economies.

The book was informative, and I now feel like I have a much firmer grasp of basic economics. I’d be remiss not to mention a few problems though. First, the book has a particularly right-leaning conservative bent and occasionally gets on a high-horse. Second, the organization is odd, such that section overviews come at the end of the section, with the sections themselves preferring to jump straight into sub-topics without any preamble or indication as to the fascinating twists and turns the subject matter will take.

Rich Dad Poor Dad by Robert Kiyosaki

Felt a little bit guilty reading this one, as if I wanted to put a brown paper book-cover over it, so people couldn’t see me reading a pop-finances book For Dummies™. For whatever reason, though I enjoyed some of Kiyosaki’s articles in the past, I wanted to avoid feeling like a chump, so I avoided this book.

Finally though, I broke down and decided to read it in October. Like many of us, I suspect, finances and the economy are much on my mind in these troubled days.

Kiyosaki’s trope is simple; he had two father figures, one of whom was highly educated, the other of whom was an aggressive, successful businessman. Kiyosaki clearly learned more from the rich dad than from the educated dad. He tries to impart some of these core philosophical differences to the reader in two hundred pages of tortured English.

The core point here is: invest your money in assets which will return money to you. Don’t invest your money in expenses. Then, work to grow your assets, and be smart about using a corporate structure to avoid as many taxes as possible. It’s sound advice.

Key points:

1. You must think differently about money, about investing, about assets and liabilities than most people do if you want to get out of the rat race.

2. Your job, no matter how well it pays, is unlikely to ever make you rich. The nature of the deal is such that your cost of living is likely to increase with your wages, you pay so much to the government, and no matter how hard you work, there are only so many hours in a day.

3. By being smart about taking advantage of various tax structures, the power of incorporation, etc. you can help avoid some taxes, and help pay your expenses with pre-tax instead of post-taxed money. This will help.

4. You must above all understand the difference between an asset, which is something that returns you money without any effort from you, and liabilities, which are anything that cost you either time or money in upkeep. (Your home being the principal thing most people mistake for an asset.)


Overall, I agree with most of the lessons in this book. Money is power, though not an end unto itself. In order to get free from the rat race, one needs more than just the income they can derive from employment.

Now, my ability to put some of these lessons into practice is what I really need to spend time on instead of this navel gazing blog.

How to Make Millions with Your Ideas by Dan S. Kennedy

Still on the quickly-getting-tired Business/Self-Help category we have Dan Kennedy's early nineties book on how to be a successful entrepreneur. Kennedy was highly involved in the mail-order, direct-to-consumer, and the early television info-mercial scene. He (apparently) made millions and has made millions of dollars for some of his clients by advising them on ways to build better businesses.

These could be summarized as:
- Find products and sell them.
- Make your business a service business in addition to its other functions.
- Use synergies between various businesses you control to get a multiplier effect.
- Market yourself and your business aggressively to get more customers; then sell these customers more stuff.

The book was vaguely useful, if occasionally smarmy. As part of a larger cross sampling of entrepreneurial case studies, there were a few tidbits here. In particular, a primer on how to get more money for a business you sell to a larger company was likely valuable. The end of the book also contains a (now very dated) list of various resources which could help you find products to sell, find customers to sell them to, deal with fulfillment, etc.

Not a waste of time, but... I couldn't help but feel like Dan Kennedy was just using ME, the reader, as yet another sucker he could toss off a quick book to and make a few bucks. The coupon at the end of the book for a PERSONAL PRODUCT REVIEW WITH DAN KENNEDY... Not sure the infomercial market is for me... Still, interesting as part of a larger study.