The 4 books I read this summer vacation

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This year, on our annual holiday, we travelled to Provence, France. I packed 4 physical books with me in one suitcase. We did quite a bit of cycling on electric bicycles in the hilly villages around Ménerbes, the scenery was stunning; with patchy wifi and very little distractions, books became my main refuge, after conversation of course.

As much as I try to read everyday, it is so much easier on holiday when one can devote 1-2 hours a day uninterrupted to a good book. I also planned to go running daily. I hate running so I don’t know why I even planned that.

Here are the four and oh, I only read non-fiction:

  1. Red Notice : How I Became Putin's No. 1 Enemy

This book gave me sleepless nights on holiday, I got really involved with it. I highly, highly recommend reading it - it's well written even if you aren’t all that interested in finance.It is not for the faint hearted, especially the chapter about Sergei Magnitsky, his lawyer being harmed in a Russian prison. What I loved about the author is that he’s moved on from investing in Eastern European & Russian equities (and he was very talented at that) to lobbying for human rights, in a big way. In my excitement, I tweeted about this book and then because Bill Browder liked the actual post, I got a lot more attention on Twitter than I usually get.

  1. Family Constellations Revealed: Hellinger's Family and other Constellations Revealed

A friend shared attending a money constellations workshop and greatly benefiting from it. I have experienced family constellation work before but never delved deeply into it. Hearing about the money impact, I rushed to buy everything I could on the topic. I really enjoyed the book -interesting stories, great insights and leads to the understanding that there is a lot we don’t know that is “hidden” stuff and so useful to uncover.

  1. The Elements of Investing, Updated Edition: Easy Lessons for Every Investor

I tried reading this and just couldn’t get into it. It may be that I have become that jaded investment adviser that has read too many books on this topic. Or that I just needed a break from investment speak on holiday. I will try again especially as I spent £18 on it.

  1. The Fish That Ate the Whale: The Life and Times of America's Banana King

A book about a banana trader. I learnt so much about the yellow fruit and the facts were written in such a fascinating style that I couldn’t get enough of it. An engrossing tale of the life of Sam Zemurray, the ‘banana king’ who found a gap in the market and began selling this fruit to areas of the United States that had never seen them before. A well told story, worth reading.

I am always looking for book suggestions. Feel free to leave me a comment if you have any.

Book Review: Evicted: Poverty and Profit in the American City

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“Residential stability begets a kind of psychological stability, which allows people to invest in their home and social relationships”. – Matthew Desmond Matthew Desmond, an American sociologist wrote this brilliant book Evicted: Poverty and Profit in the American City whilst living near the families whose lives he wrote about. The book also won the 2017 Pulitzer prize for General Non Fiction. This ethnographic study was an eye-opening read about how tragic our systems are in not giving a helping hand to the poor. From the stories I read, it felt like those being evicted had limited options legally or otherwise and were being ‘kicked when they were down’ – seemingly, everything can be profited from including homelessness. I really enjoyed the humane way in which Matthew Desmond described the Landlords & their own conflicts in choosing to evict their tenants, sometimes during the Christmas season in the freezing cold of Milwaukee.

In my review, I focus on scarcity and “material hardship” and what that does to the decisions, quality of life and stability that low-income families experience.

Some of my favourite lines from the book are below with my thoughts:

On material hardship

 “This – the loss of your possessions, job, home, and access to government aid-helps explain why eviction has such a pronounced effect on what social scientists call “material hardship,” a measure of the texture of scarcity. Evicted families continue to have higher levels of material hardship at least two years after the event.”

Stable housing or shelter is one of our basic human needs. In the stories, the renters could not afford to put their belongings in storage and so ended up losing their possessions too, once evicted. This affected their ability to attend interviews or look for ways to better their life. Sometimes, it was hard to get out of the trap of addiction or slip back into addiction due to sheer hardship and brutality of being homeless. I cannot really even imagine what this does to one’s state of mind.

On residential instability

  • “Residential stability begets a kind of psychological stability, which allows people to invest in their home and social relationships. It begets social stability, which increases the chances that children will excel and graduate. And it begets community stability, which encourages neighbors to form strong bonds and take care of their block.”
  • “Instability is not inherent to poverty. Poor families move so much because they are forced to.”
  • “It takes a good amount of money and time to establish a home. Eviction can erase all that.”

Housing authorities (in the US) count evictions and unpaid debt as strikes – so to read that those with the greatest need are systematically denied help is really sad. It just doesn’t make any sense. Sometimes, tenants were evicted for complaining there was no hot water. Poverty also drowns out your voice.

On opportunities for growth

America is supposed to be a place where you can better yourself, your family, and your community. But this is only possible if you have a stable home.”

“A good home can serve as the sturdiest of footholds. When people have a place to live, they become better parents, workers and citizens.”

This is such an important book which throws light on how the need for housing and the need for profit clash, resulting in much psychological devastation for the poor. While the broad consensus is that families should spend no more than 30 percent of their income on housing,  it is difficult for renting families to meet this goal with rising rents. In London, where I live, rents rise each year and certainly salaries do not keep pace with rising rents. Yet, the public housing situation in the UK seems more humane.

Empathy for the Needy

I recently came across The Core Values of César E. Chávez and this one caught my eye: A Preference to Help the Most Needy – A concerted effort to support programs that reach the most needy, the most dispossessed, the most forgotten people in society no matter how difficult the challenge that choice may bring.

The book enlightened me to the many privileges I take for granted such as knowing where I will sleep at night. I highly recommend reading it. Any book that awakens me towards empathy for the less privileged and gratitude for mine is a great book.

Further reading:

Evictionland - Curbed.com

America’s Insidious Eviction Problem - The Atlantic

Evicted - Matthew Desmond

Nonviolent Communication and Corporations - Medium

 

 

Book Review: Simple Wealth, Inevitable Wealth

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“The mortal enemy of investment success is fear.” - Nick Murray I was fortunate enough to buy Nick Murray’s book The Excellent Investment Advisor early on in my advisory career. It made complete sense to me, stressing the role of an investment adviser as behavioural coach. I recently heard about Simple Wealth, Inevitable Wealth on a podcast with a US-based financial adviser, I bought it - a 1999 copy set me back about £25 and it is worth it!

Some of my favourite lines from the book are below with my thoughts:

“”Wealth isn’t primarily determined by investment performance, but by investor behavior.””

Numerous conversations with clients have convinced me that we have our unique perspectives and biases around investing which influence our decisions. A great investment portfolio needs to have global diversification, asset allocation, low costs, etc. Given a well-constructed portfolio, clients who have the ability to stay detached and take the long-term perspective with patience and discipline can usually achieve greater financial success.

On picking a financial adviser:

“Do not care what they know until you know that they care.”

Since you are trusting your financial adviser with your wealth and your family’s wealth, technical capabilities and competence can only take you so far. Trusting in your adviser’s judgment is important and so take your time looking for someone you can really trust.

On Risk:

  • “People greatly overestimate the long-term risk of owning stocks. People seriously underestimate the long-term risk of not owning stocks.”
  • “The great long-term financial risk isn’t loss of principal but erosion of purchasing power.”
  • “The real long-term risk of equities is not owning them.”

Here, he means stocks as an asset class. Important to remember you only invest in stocks if you can stay invested for 5 years or more. If you haven’t ever invested in equity, that would be quite risky behaviour, according to him.

On Investor behaviour:

“The single most important variable in the quest for investment success is also the only variable you ultimately control: your own behavior.”

I have to agree and love that this is within our control. You can’t control the markets, economic forces of nature or will things to go your way. You can choose how you react to all of it.

On the active/passive debate:

“At the end of the day, it isn’t indexing v/s active management. It’s cost.”

The cost of your portfolio has a direct effect on the growth of your portfolio - an important factor in portfolio construction.

Really enjoyed reading this book & highly recommend!