Barefoot’s Favourite Books of 2010

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The word around the traps is that Santa is looking to call it a day. His financial advisor has recommended he take an allocated pension and head off to the Gold Coast after Christmas.

It’s been a tough year for the fat man:

“First, none of the kids write letters to me anymore – they all send emails – so I’ve had to outsource my elves to India to cope with the volume.

“And all the kids want this year is a ruddy Ipad! Now I may be Father Christmas, but not even I can get a bulk discount from Steve Jobs.

“And to cap it all off Gerry Harvey is slagging me off in the press because I get my goods from the North Pole and don’t pay GST.

“Ho! Ho! Ho! I swear this is all getting too hard – Rudolph reckons we’ll be flying blind this year – apparently no-one can afford to power their Christmas lights!”

It’s no surprise that Christmas has gone consumerist but, as I say at this time each year, what would you expect from a white-bearded, red-suited Santa whose modern-day persona was created to sell Coca-Cola?

So, instead of slugging it out in some suburban shopping centre, I prefer to give my loved ones the books I’ve read this year that have really changed my thinking. Here’s my top five for the year:

How to Lie with Statistics

Rumor has it that this book has been a bestseller in Canberra each year since it was first published in the 1950s (and it’s also been the lead textbook for financial forecasting 101).

Like a statistical sleuth, How to Lie with Statistics systematically shows you how we are intentionally deceived by statistics, averages, graphs and trends – generally by people who have a vested interest in selling us something: think investment managers, marketers and politicians.

This is a wonderful book that everyone should read. After all, one hundred percent of people who read this book say it’s outstanding.

QBQ: The Question Behind the Question

I first thought this was written by an annoying ex-girlfriend – she was always asking me the question behind the question (‘what do you really mean when you say my mother is an interesting person?’). Not so.  Author John G. Miller has written a cracking book that shines a light on the power of personal responsibility.

The simple idea that we are personally accountable for our own actions seems to have been forgotten in a world of pandering parents and populist politicians – in both work and life.

But this book challenges people to stop looking for someone to blame (‘it’s not my department’, ‘someone else can do it’, ‘it’s not my responsibility’) and instead take ownership of a situation and ask the question behind the question: ‘What can I do to improve this situation?’

I’ve ordered copies for my staff – and I’ll make sure they all read it and understand the key message. It’s especially good for mollycoddled young people who join the workforce believing they are unique, special and incapable of doing wrong.

The Ascent of Money: A Financial History of the World

The term ‘economic historian’ is enough to put most people to sleep. Yet Harvard professor Niall Ferguson has done the unthinkable – he’s managed to explain the financial history of the world in a gripping, fascinating yarn that’s so good you almost forget you’re learning something.

It’s easy to get caught up in the minute-by-minute fluctuations of the markets, but Ferguson goes back in history and shows us that from the beginning of time the world has always been in cycles of boom and bust.

He leads us all the way from finance’s Mesopotamian origins all the way to the current financial crisis. While it’s true that history rarely repeats, it does leave very good clues as to what may happen in the future.

By the way, The Ascent of Money was made into a television series, which can be viewed for nix at pbs.org.

Bounce: How Champions are Made

A good friend of mine, who has a library at his home that’s bigger than the one I had at my high school, handed me a copy of Bounce: How Champions are Made one evening and said “this is a life-changing book”.

Author and Commonwealth table-tennis champion Matthew Syed draws on fascinating case studies of athletes, together with the latest research in neuroscience and economics, to argue that the idea of ‘natural talent’ in any endeavour is almost always overrated, and of little importance.

He instead suggests that excellence is achieved through 10,000 hours of ‘purposeful practice’. Most high achievers (in sport, as in life) have the willingness to work much harder and longer than their peers. This translates into greater success, which Syed argues is confused and labelled as natural talent – even by the athletes themselves.

This is a must read for anyone who has given up on a goal because they think they don’t have the ‘talent’ – which is probably most of us.

Poor Charlie’s Almanac: The Wit and Wisdom of Charles T. Munger

Eighty-six-year-old Charlie Munger is Warren Buffett’s life-long business partner. Buffett jokes that “Charlie can’t see, and I can’t hear, so together we make a pretty good team”.

While Munger isn’t as famous as Buffett, the self-made billionaire is not only one of the sharpest investment minds in the world. He’s also one of the most outspoken (saving his harshest criticisms for Wall Street bankers who add nothing and line their own pockets).

He’s built his fortune on the simple (but often forgotten) principles of integrity, trust and hard work. This beautifully illustrated coffee-table book is a collection of Munger’s speeches, notes and letters, which combine to encapsulate the wit and wisdom of a man who has been at the top of his game for over seven decades.

So if you’re scratching your head to think of a good Christmas present for that someone special, why not give them one of these books (along with The Barefoot Investor: Five Steps to Financial Freedom of course). The ideas they may inspire will last longer than practically any other gift – and best of all, they won’t break the bank!

Tread Your Own Path!

Photo: http://www.flickr.com/photos/yersinia/2007979339/

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Barefoot also recommends:

1. Barefoot’s Favourite Finance Books
2. The Best Three Business Books That Won’t Break Your Bank
3. The Best Money Books Going Around
4. Get Rich Quick Books That Really Work
5. How to Make $7000 in 2010!