19+ Personal Finance Books Every Canadian Should Read

19+ Personal Finance Books Every Canadian Should Read

"NO GIRLS ALLOWED IN THE COOL BOOK FORT."

“NO GIRLS ALLOWED IN THE COOL BOOK FORT.”

Let me start off this post with a bit of a scandalous statement. I know, WHAT A SURPRISE, huh?

Most personal finance books are trash.

Okay, they’re not trash. It’s just that if you’re an intermediate or advanced student of the subject, most will be filled with stuff you already know. Authors cater to the lowest common denominator, because that’s where the dollars are, yo.

For people just starting out, this isn’t a bad thing. If you know nothing, everything is going to be enlightening. But for people who already know the basics, you’re going to have to wade through a bunch of the same stuff over and over again. Sorry, but that’s just the way it is.

Since I’ve read approximately 5929582950285296205025 (that’s a lot of fives) personal finance books in my day, I figure I can help you guys out. Let me sort through the trash for you, leaving you with a list of stuff that’s actually good. We’ll cover everything from the basics to advanced investing stuff, meaning just about anyone can find something in this list that appeals to them. If not, you’re not really trying.

Let’s do this thang.

The basics

1. The Wealthy Barber

Fun fact. I discovered The Wealthy Barber in my sister’s bathroom when I was in grade nine. Yes, my love affair with money literally began because I wanted reading material while emptying my bowels.

David Chilton’s tale of a small-town barber teaching the basics of finance while cutting hair is a classic because it’s presented in an easy to read manner with an actual entertaining story attached. It outlines the basics of everything from investing to insurance to saving, with plenty of other stuff.

I’ve also been known to give this book as a gift at weddings. It’s about as popular as you’d think.

2. The Wealthy Barber Returns

Read my review here, including when David Chilton actually shows up and says nice things.

Some 20 years after the original, David Chilton is back, updating his classic book. The Wealthy Barber Returns is a little different than the first, sort of written like a blog. Chilton covers everything from emergency funds to index investing, all in small bite-sized chunks for today’s busy Canadian. This, somewhat ironically, makes it the perfect book to have in the bathroom.

3. The Richest Man in Babylon

Yeah, it’s basic, but the message is easy and timeless. The Richest Man in Babylon is a series of fables set in Babylon, which teach the reader the basics of finance and building wealth. It’s basically a bunch of fairy tales.

4. Think and Grow Rich

As much as I think attitude is one of the more overrated parts of finance, I may be biased because I’ve never really had a problem with getting excited about being rich. So after reading Think and Grow Rich!, I was a little disappointed. I thought it was a little light on nuts and bolts, and a little heavy on inspirational stuff. But with so many people loving it, maybe there’s more to this inspirational stuff than I think.

5. Rich Dad Poor Dad

Look, I know Robert Kiyosaki is nothing but a relentless shill. His Rich Dad seminars are filled with high-pressure sales tactics and other questionable business practices. Hell, there’s even evidence that his “rich dad” didn’t actually exist. But the overall message of Rich Dad Poor Dad is sound, and will question some of your beliefs on things like whether your home is an asset, and how debt is bad.

6. The Millionaire Next Door

The Millionaire Next Door is a flawed book rife with confirmation bias (it’s obvious that a certain kind of millionaire would best respond to the authors’ incentives), but you should still read it, even for the inspiration factor alone. Too many people think you need a flashy title or job to become a millionaire. The Millionaire Next Door busts that myth.

7. The Millionaire Teacher

Read my review of it here.

Andrew Hallam, the author of Millionaire Teacher might be the nicest guy on the whole internet. He also built a million dollar portfolio on only a teacher’s salary by successfully value investing, before switching to ETFs. Oh, and he runs marathons and has beaten cancer. These days, he travels around the world teaching expats about investing. Pretty sweet gig if you ask me.

8. How To Win Friends and Influence People

I know, I know. How to Win Friends and Influence People is cheesy as all hell. It was originally published in the 1930s, and I’m pretty sure it was cheesy back then. But getting people to like you is important, and so is communicating in ways where you get people to want to do things for you. It seems like salesmanship when you’re reading, but it works, dammit.

Oh, and once you’re done reading it, you can totally tell who has also read it. I had a boss who LURVED the criticism sandwich (a complement, followed by the criticism, followed by another compliment). I started doing it back just to troll him. I’m not sure it worked, but I had fun with it.

Investing

9. The Uncommon Investor III

Although my version of value investing is pretty unique, if I were to compare it to one person, I’d probably say Benj Gallander of Contra The Heard. The Uncommon Investor III is the layman’s introduction to Gallander’s investment philosophy, told in a similar fashion to The Wealthy Barber. Plus, it includes a same-sex couple, because GASP WON’T SOMEBODY THINK OF THE CHILDREN.

10. The Intelligent Investor

If you’ve spent longer than a minute reading about investing, you already know what The Intelligent Investor is all about. This timeless text by Benjamin Graham should be required reading before you get to pick individual stocks. It’s a little dry, but there’s a reason why it might be the most universally loved book on value investing. If you’re too lazy to read the whole book, Warren Buffett says his favorite chapters are 8 and 20.

11. Security Analysis

The Intelligent Investor is for the layman, which you might not think after reading it. If you’re a serious student of value investing, then it’s time to take the next step, reading Security Analysis. Yeah, it reads like a textbook, and it’s more than 700 pages, but I guarantee you will be a better investor if you wade your way through it.

12. You Too Can Be A Stock Market Genius

Joel Greenblatt is sort of like Walter Schloss. As in, he might be the smartest investor you’ve never heard of.

Greenblatt’s penultimate work is You Can Be a Stock Market Genius, which is a simple look at not only value investing, but things like bankruptcies, mergers, spinoffs, and other sorts of special situations. You’ll find they have a lot in common with value ideas, which make them a simple add-on for any value portfolio.

13. The Value of Simple

Written by friend of the blog John Robertson, The Value of Simple is the book for anyone who is still a rookie at the investing stuff. It’s an easy to read guide (including plenty of pictures, graphs, and so on) on everything from TFSAs to RESPs, mostly focusing on avoiding fees while building a portfolio that tracks the index. It’s basic, but that’s all it’s supposed to be.

Other

There are a bunch of books out there that I’m going to bunch into the other category. These books are anything from biographies of masters to specific books on specific topics only loosely related to personal finance. Yeah, it sort of strays from the personal finance books for Canadians theme, but they’re still all worth your time.

14. The Snowball

Author Alice Schroeder was given full access to Warren Buffett for years, interviewing his friends and family, as well as unrestricted access to his business records. And apparently after reading The Snowball, Buffett was so pissed off that he hasn’t talked to Schroeder since. That’s the kind of book I can get excited about.

The Snowball is admittedly light on investing tips, but it does have all sorts of timeless lessons on compound interest, doing what you love, and how doing things the right way is incredibly important.

15. Moneyball

At first glance, a book on baseball seems like pretty much the opposite of something that will help you with your finances. But what’s important about Moneyball is what it teaches you about thinking outside of the box. If you translate the lessons used by the Oakland A’s to your own life, I guarantee you can make things better.

16. Titan

John D. Rockefeller was a business pioneer. Things like we take for granted as sound business practices today — like controlling your own supply, consolidating competition, and using technology to increase production — were practically invented by Rockefeller. Sure, he stumbled upon the oil business at a pretty opportune time, but I’m convinced he would have ended up rich no matter what he did. Not only was Rockefeller the richest man of his time, but he ended up as perhaps the richest of all time once you adjust for inflation. Anyway, just read Titan already.

17. The Dip

Knowing when to quit something is one of the most difficult things any of us deal with. The Dip will help you through the decision, teaching you to separate the difference between the dip (when a new job reaches its low point) and when it’s time to quit. It also busts the myth that winners never quit. Winners do quit. All the time.

18. Why We Buy: The Science of Shopping

If you have trouble with picking up impulse items at the grocery store, Why We Buy: The Science Of Shopping is going to be endlessly fascinating. It outlines all the tricks stores use to get people to put things in their carts. You’ll learn the secrets of why disorganized displays sell better than pyramids of cans, and why the placement of products on the shelf matters. The world of convincing you to buy stuff is surprisingly complicated.

19. Atlas Shrugged

More than a decade after reading it for the first time, I still have to say Atlas Shrugged is my favorite book — even though Ayn Rand isn’t the greatest writer and the book is about 200 pages too long. She doesn’t so much as suggest her philosophy onto you, but does her best to beat you into submission with it.

But there’s a whole bunch of good with Atlas Shrugged too, including a great story, and a way of looking at the world which will either change your life or make you want to strangle a puppy (or, depending on how seriously you take it, sometimes both!). If it doesn’t inspire you to build your own future, then I’m pretty sure you’re a robot.

Bonus

20. Too Big to Fail

Andrew Ross Sorkin (who looks like he’s 25), pens Too Big to Fail, an incredibly detailed look at the financial crisis, with all sorts of insider stories that will leave your mouth agape for about half of the book.

21. Confessions of a Street Addict

Have you ever wondered what actually goes on behind the scenes of a hedge fund? Before he was making goofy sounds and saying BOOYA! on CNBC, Jim Cramer ran a successful hedge fund. Confessions of a Street Addict is his fascinating inside look at the industry, including some stories about throwing telephones across the room. It’s the only Cramer book reading.

22. Cold Hard Truth: On Business, Money, & Life

If you’re like me and find Kevin O’Leary hilarious, you’ll enjoy Cold Hard Truth. In it, O’Leary takes stories from his own life and weaves them into lessons that can benefit most everyone. Plus, you’ll giggle a few times.

Did I forget any?

That’s about it. Feel free to any of your favorites to the comment section. All complaints can be sent to GoToHell@IDon’tCare.com.

 

Texture by Next Issue Review

Texture by Next Issue Review

As I’ve mentioned approximately 6,395 times before (author’s estimate, but I’m pretty sure it’s right), you need to read a ton if you’re going to be a successful investor.

Personally, I read at least a couple hours a day, and maybe even more. I have a book that I’m working on (currently The Snowball, Warren Buffett’s biography, for the third time), I read Seeking Alpha and of course Motley Fool almost every day, and I cruise the interwebs for all sorts of interesting stuff. I also stumble upon interesting stuff on Reddit, along with a lot of crap. Finally, I spend $20 a month on a Globe and Mail Unlimited membership, which I think is worth my time. Plus I like that I can write it off.

I recently ordered another information source, one that potentially has a lot more content than some of the others, that only costs $15 per month. It’s Texture by Next Issue (Subscribe to Texture by Next Issue now!), the Rogers owned “Netflix for magazines,” which give you access to over 130 different magazines. This is my Texture by Next Issue review.

Texture_Facebook_X_V3

What do you get?

There are two different price levels. For $10 a month, you get access to a bunch of monthly magazines. Prominent titles include:

  • Money Sense
  • Money
  • Canadian Business
  • Cosmo (and Cosmo for Latinas, which is apparently a thing)
  • Esquire
  • Family Circle
  • Chatelaine
  • Golf Digest
  • Inc.
  • Rolling Stone
  • Wired

And so on. The list is pretty massive, and includes quite a few business magazines. What it doesn’t include is one of the bigger ones, Forbes.

But for an extra $5 a month, you get access to 11 weekly magazines. They include:

  • People
  • Newsweek
  • Macleans
  • Time
  • The New Yorker
  • Sports Illustrated
  • Bloomberg Businessweek

That’s a nice list as well, but keep in mind that my favorite magazine isn’t included, The Economist.

How do you use it?

The best way to use it is on your iPad or Android Tablet, using the free to download app. You can also view it on your smartphone or Windows 8 laptop (no MacBooks, suckers). I found the experience on my iPhone to be lacking. The screen just isn’t big enough.

On my iPad, Texture by Next Issue looks terrific. The pictures look amazing, and many of the magazines have digital editions that are very intuitive. They have extra content exclusive for the digital editions, extra pictures, all that jazz. Some of the magazines (Rolling Stone is one) are just the magazine’s page on the iPad, except with the ability to zoom in. It’s a little disappointing when you run into one of those, but most are optimized to look like at least a thousand bucks.

Is it valuable?

That’s pretty much why you’re reading this Texture by Next Issue review, aren’t you? You want to know whether it’s worth your time.

When I first got Texture by Next Issue, it was because I was looking for something to read that would give me ideas for my freelance writing. For the most part blogs are great, but they tend to recycle the same old boring ideas. Yes, I’m aware credit card hacking is a thing, and so are you. No, I can’t be bothered.

Kind of like this blog, actually, with jokes.

From that perspective, the investment has been a resounding success. I get at least 3-4 ideas a month from reading it, easily worth my $15. I’m also much more aware of what’s going on in the world. Additionally, I find I read more for enjoyment too, spending time reading the sports, tech, and music magazines.

Vanessa has also “borrowed” my subscription, using it to keep up with what the UK royals are doing. Spoiler alert: not much.

More bonuses

Depending on the magazine, up to a year’s worth of back issues are available. For the weekly mags, that’s a lot of reading. Kinda like when you first join Netflix, you’ll probably binge when you first sign up.

Texture by Next Issue also is capable of downloading stuff and holding it on your iPad’s memory, meaning you can download a bunch of magazines and read them without having an internet connection.

So is it worth it?

Next Issue is worth it from two different perspectives.

If you like to read, there’s enough material there to keep you busy for the entire month, easily. Sure, there are ways to download magazines to your tablet from your library, but I couldn’t get that to work consistently. If you have a long commute on the subway or just eat lunch by yourself a lot, you’ll get enough use to make Next Issue worth your time.

Or if you’re like me, you’re constantly looking for the next investment idea. This is where I think the product really shines. The 6-8 money related magazines will give you a constant source of ideas, and the news magazines will give you a decent overall picture of what’s going on in the world. I think $15 a month is worth it to get exposure to all these ideas.

Special offer

From time to time, Next Issue gives out a bonus to new readers, usually in the form of a 30-day free trial. Right now they’re offering a 60-day free trial. All you need to do is click the link below, and use BONUS30 as the promo code when you go to check out. It’s that simple.

Subscribe to Next Issue now!

Thanks for reading the Next Issue review. Have an experience with the service? Share it in the comments.

30 Life Lessons  Learned In My First 30 Years

30 Life Lessons Learned In My First 30 Years

I turned 31 a couple of weeks ago, meaning I’ve officially completed 30 trips around the sun. I’d like to say those 30 trips were glorious and filled with more life lessons than a decade of manning the patent office with Einstein, but they weren’t. Hell, I probably squandered a whole half dozen of those trips on stupid crap like video games, golf, and learning how to juggle. It took far more hours that I’d care to admit to learn how to throw 3 balls at the same time. Most of my prior experience came with two balls.

NOT WHAT I MEANT, PREVERTS.

Considering how I’m in the 30s now, apparently I have life experience. As my dad is fond of saying, I’ve been there, done that. I don’t have any grey hair yet (at least, I think, but I’m pretty blonde so it wouldn’t show up even if I did), and I’m pretty sure that under my unkept beard there’s still a baby face. I still feel young, but I’ve also done a few things. And, of course, I’ve learned a few life lessons along the way.

So let’s go ahead and condense my 30 years of life experience into little bite-sized quotes you can print out and put on your refrigerator. Because that’s what we do in the internet.

1. Take risks

Do you know what I regret? Although there really isn’t much, the things I do regret usually involve me being too much of a wuss to take advantage of something. If all it takes is asking, then ask. Having someone say no is much easier to deal with than wondering for the rest of your life what the answer would have been. It’s one of my most important life lessons.

2. Make mistakes

10 years ago, I didn’t know squat about investing in the stock market. I was 21, had taken the Canadian Securities Course and thought I knew everything. I made some terrible investments over those first few years, often with very little research. Luckily for my capital’s sake, I also made some good investments in those years. Which brings me to the third item on the list.

3. Get lucky

NO NOT LIKE THAT BUT MAYBE.

Two of the very first investments I made were buying shares in Nortel and General Motors, following my “blindly buy whatever stock is beaten up” rule. Both those companies ended up going bankrupt, as you probably already know. And yet, I made money on both of them. Hell, I doubled my money on General Motors, getting out within a dollar of its peak share price back in 2007. A lot of that was luck, admittedly, but it’s hard to get lucky like that when all your money is earning 1% sitting in ING’s Tangerine’s pockets.

4. Don’t get greedy

Every time I buy a stock, I set a sell price. Why? Because at the end of the day, a profit isn’t a profit unless you’ve got the money in your pocket. Mr. Market can turn against you very quickly. This isn’t to say you should immediately punt something if it hits the sell target, but at least entertain the thought of taking money off the table.

5. Wealth is awesome

If the stock market cooperated, my year abroad could be accomplished while actually increasing my net worth without having to work a day. I don’t believe I’m at the stage where I can give everyone the finger and not work again, but I can say without a doubt that I sure am glad I exchanged all those hours in the early stage of my life for financial stability now.

6. People… meh

The people I hang out with at 31 are completely different than who I hung with at 21, and I assume I’ll have a new group of friends at 41. At the end of the day, people will come in and out of your life, and it’ll be okay. Just have fun now and have fond memories in the future. You never know who’s gonna stay and who won’t. Besides, you’ll outgrow some of your friends anyway. Don’t be sad, it just happens.

7. Remember your biases

Psychology will hinder you, unless you have a basic understanding of it. Remember two things:

a) We seek information that confirms what we already know
b) We value things more highly because we own them/they happened to us

Remember those two things, and you’ll be better at manipulating yourself than 90% of the population.

8. Say it loud and proud

That sounds a lot like the slogan for some sort of gay pride event, but let’s go with it anyway.

Do you know how much value somebody who just agrees with the consensus contributes? It’s pretty close to zero. It doesn’t matter the platform, well thought out contrarian opinions are worth far more than someone who acts like the Borg, just waiting to be assimilated.  It’s not always easy to go against the crowd, but, again, the important things never are.

9. What I just said

The important things are never easy. Just about every overnight success has toiled for years in relative obscurity.

10. Learn patience

Remember how I said things weren’t easy? We’ve been conditioned to think they are. Which leads to a whole generation of university grads a year or two out of school wondering where their perfect life is. It’ll come, but not after a couple decades of really hard work. Or, from my experience, a decade of working hard and saving my ass off.

11. Balance comes at a price

How many times have you read advice about investing or paying off debt that says you’ve got to be balanced? Be balanced all you want, but remember — it comes at a price. For every beer you drink while out with your friends, that’s a few more dollars that have to be earned to be financially free. A lot of us spend too much on the comforts of today, get in debt, have an awakening, and then preach balance when paying it off. Not the ideal solution, in my view. Let balance be for the person who didn’t screw up in the first place.

12. Try things

10 years ago I was just a guy working at a store. A few years later, I was a terrible mortgage broker and equally bad real estate agent (one of the reasons why this blog was initially anonymous). Sometimes the new things you try will work out, and sometimes they won’t. But you never know unless you try it.

13. Invest early and often

Investing doesn’t have to be with money. You can work at mastering a skill, or go to school, providing the subject matter is marketable. You can even go work for free somewhere, although that rarely works out. We waste so much time that could be put to better use.

14. Alcohol is a waste

And topping the waste of time list? Partying. You’re living a delusional life if you think that any experience that needs alcohol as a lubricant is somehow more interesting or fun than time spent sober. Most people figure this one out on their own by the time they hit 30, but we all have that pathetic friend that still hasn’t grown up. Don’t be that friend.

15. Embrace your faults

For some reason, it’s a taboo to admit you’re anything less than a perfectly rounded person. It’s okay to have faults. If you’re the best musician in the world, do you really think anyone gives a crap that you aren’t very good at doing your taxes? (Well, besides the government?) If you make your strengths truly shine, the weaknesses will be forgiven.

16. Learn humility

In the 3+ years as a chip guy, I had countless conversations with front line retail employees about various work problems they were experiencing. Without exception, each problem was someone else’s fault. As we know, the truth isn’t quite so black and white. Once  in a while, your biggest problem will end up being you. Entertain the thought of that once in a while.

17. The comment section sucks

I constantly get sucked into this. Do you know how much time I’ve spent reading the dumbest crap on Reddit? Too much. 15 minutes is too much. For every gem in a comment section, there’s a whole lot of crap. There’s an argument that life is all about wading through crap to find a gem, but the internet isn’t the place to do it.

18. Internet activism

Which brings me to the other form of wasting time on the internet — activism. Your #yesallwomen or #freeourgirls tweets? They’re pretty much useless. So is filling up comment sections with your thoughts on guns, or pro-choice rights, or the cause du jour, LBGT rights. But we feel good when we support the latest social issue. That’s fine, but realize that comments on a website are literally the least you could do. Aim higher if you’re really passionate about something.

19. Learn from everyone

Even the crazy guy that nobody likes has wisdom about something. Sam Walton, the guy who founded Walmart and grew it into the behemoth that it is today, was famous for going into other stores and stealing their ideas. You don’t have a monopoly of good ideas, so steal away. Hell, I’m the 1,380,839th guy to do this exact same format of blog post.

20. Mentors

Having mentors is an important life lessons, but realizing that your mentors have faults is far more important. Success is like history — it doesn’t quite repeat itself, but it does rhyme. Don’t just blindly follow your mentor and make the same mistakes they did. Copy the good parts, and discard the bad. And realize that if you don’t outgrow your mentor, you’re not doing things right.

21. Experiences vs. stuff

The internet in general spends a lot of time favoring experiences over stuff, with very little emphasis on something really important. At the end of the day, if money is exchanged for trips or if it’s exchanged for things, it’s still gone. If you’re going to spend it, do it responsibly on what makes you happy.

22. School is a poor predictor of success

There were certain times as a 19 or 20-year old where I felt pretty inadequate. All my friends were off in university earning degrees, and I was stuck working night shift at a grocery store. These days? Some are doing well, others…not so much. I came to realize that simply going to university was a pretty poor predictor of success. It’s the other attributes that matter, not the amount of time you spend in a classroom. It is very possible to get a valuable education without stepping foot on a campus, and no, I’m not talking about taking courses online.

23. Be ambitious towards accomplishments, not things

Too often we gauge success on where someone lives, or the clothes they wear, or what they drive. After a while, I came to realize that these were pretty pointless things to be jealous about. Instead, focus on what someone has accomplished, and use it for motivation. When that other salesman in the office is so successful that he drives a luxury car, don’t be envious of the car. Motivate yourself to beat his sales record.

24. Don’t be afraid to quit

I was a poor mortgage broker for 3 years before I hung up my proverbial skates. I should have realized it after a year. I just didn’t have what it took, no matter how much I tried to will myself into it. I used to procrastinate doing simple tasks for hours because I hated asking people for their business. Either become effective at your profession or don’t do it.

25. Opportunities are everywhere

Once, while golfing, I was faced with a difficult chip shot. My friend came over and told me as much. I looked at it, and decided it wasn’t that tough. I swung, and put the ball within two feet of the cup. I’m fully convinced my confidence allowed me to make that shot.

You have the choice to look at the world in two ways — you can believe everything is stacked against you, or you can choose to believe that there are opportunities everywhere. If you choose the latter option, there will come a point where you’ll have to turn down opportunities because you don’t have the time to pursue them all.

26. You’ll bounce back

After finally quitting my real estate agent/mortgage broker career, I was the weekend chip guy for Frito-Lay. I was working with someone who I grew to hate. I was making less than $30k a year. I spent every weekend lugging chips when I would have been much happier hanging out with my friends.

18 months later, I was running one of the biggest routes in the province, making six figures a year, and impressing management to the point where promotions were discussed. A certain plagiarizing blogger once made fun of my profession, which made me laugh because I was 100% sure I made more money than he did and 1000% sure I had a higher net worth.

If you work hard and are patient, success will come. Sometimes though, you have to take a step back to take two steps forward.

27. On being busy

I’ve touched on this before, so I’ll be brief. Being busy is great, providing you’re doing something of value. Often, the things we think are important are anything but. Leave some leisure time for yourself.

28. Realize you’ll always have bosses

I think if you have the desire to do so, you should start a business. It teaches you all sorts of lessons about things that are important. But most importantly, it’ll teach you whether you’re any good at running a business. Because a lot of you won’t be.

The wrong reason for wanting to start a business is because you don’t want a boss anymore. You’ll always have a boss. If you’re a freelancer or even if you cut grass for a living, your customers will be your boss. And spoiler alert: sometimes they’ll be unreasonable too.

29. Realize the other party’s motivation

Whenever you enter into a transaction for anything, look at the other party’s motivation for doing it. If something seems too good to be true, then maybe it is. And once you figure out how to identify when the other party of a transaction is desperate to sell something, you’ll end up profiting. Don’t ever buy something when the seller is just testing out the market.

30. Don’t stress it

Before I dropped off Vanessa at the airport to go to Korea, we stopped in for dinner. I ordered a nice hamburger, which according to the menu, came with toppings I like. It showed up and there was mayo slapped on BOTH BUNS. It was a travesty.

I immediately got upset. I tend to internalize things when I get mad, so my mind started racing. I was at this nice meal with my girlfriend and I was expected to eat a burger with g.d. mayo on it? I’m gonna get charged $14 for this? Why doesn’t the menu list the stuff on the burger? You’d think people would be interested in that stuff.

And then I shrugged, and realized it wasn’t a big deal. I asked the waitress for a new bun, and transferred my burger over to it. It wasn’t the best burger I’ve ever had, but I actively made the decision to not be mad about it. Remember that when you get mad about something that doesn’t really matter in the scheme of things.

That was more words than I expected.

I’ll end with this. There are things I’m better at as a 31-year old than a 20-year old. I’m an infinitely better investor. I’m more patient, mature (really!), and tolerant. 20-year old Nelson had just read Atlas Shrugged and had a bit of a chip on his shoulder. He was a relatively smart guy, who worked hard and was well on his way to building a nice financial foundation.

And then he grew up, mellowed out a lot, and realized the world was a lot more complex than what Ayn Rand said. I made money on good investments and lost it on terrible ideas, like that time I thought I was going to rent out space at the farmer’s market to sell things you could only buy online to old people without the internet. Or that other time I thought I’d lend money to co-workers and charge slightly less than payday loan rates.

But the important thing is I continued to learn. I picked up a few life lessons along the way. Almost every day I crack open my laptop and dish out advice on all sorts of things, focusing on finance. The more I give out advice, the more I realize it’s important to continue learning and expanding my knowledge. The most important life lesson I know? That’s simple. I can sum it up in a math equation.

Hard work + intelligence + time = success

I know smart people who cruise through life, who do okay. I know people who are dumb who work hard who do okay too. But when you combine both? You’ll almost always end up being successful. If you’re not, either you aren’t as smart or hard working as you think, or you just need to learn patience. The more time you spend on something, the easier it gets. Once you embrace all three variables, success will inevitably happen. And when you’re missing all of them? Yikes. We all know those people.

But the best part? It’s not very crowded at the top. I’ll meet you guys there.

The Gender Pay Gap Is Largely A Myth

These days, it’s probably the best time in history to be born without a penis. Women are free to choose any path they’d like, a privilege really only granted over the last generation. Women can have all the casual relations they’d like, with minimal consequences. Women are buying houses and making all sorts of other large decisions without having a partner. A woman is more likely to have a university education. And so on. And yet, we still have a gender pay gap.

Only 5% of the 500 largest companies in America have women in charge. Women are still punished for taking time off to have children. And, as has been famously stated, they have to put up with an injustice that would piss off any of their male counterparts, making 77 cents on the dollar for doing the same job.

So naturally, the ladies are pissed. They’ve taken their fight to the Facebook and the Twitter and wherever else the gals hang out. Maybe Pinterest? I dunno. But is the statistic even true? Do women really make 77% of men for doing the same job?

Related: that time I gave the ladies career advice.

In my experience, the answer is a firm no. In fact, I’ve never encountered a boss say such a thing, even privately. (And I heard those same bosses say some offensive things) I’ve never met a woman who could legitimately say she was paid less than a man without a good reason. I’ve met many women who think they’re better qualified than more experienced male coworkers, but I’ve met many men who think the same thing.

So I took a little closer look into this infamous 77 cents on the dollar statistic. And the weakness leaps out immediately. It comes from 2010 U.S. census information which simply divided the total income earned by women divided by the number. The census did the same thing for men, compared the results, and declared a huge gender pay gap.

But anyone with functioning grey matter can see the problem with that. Many women self select jobs that are part time, or lower paying, or offer more flexibility because they want the choice to stay at home and raise children. Women also tend to self select into jobs that focus on humanities and other such skills, jobs which tend to be high on security and low on advancement opportunities. More than three quarters of teachers are women. More than 91% of nurses are women. More than 70% of human resources professionals are women, even though HR people are the worst. Sorry ladies.

Meanwhile, men dominate construction (91%), oil and gas (96% in the field, not counting office employees), transportation (77%), and manufacturing (72%). These jobs are tougher, physical jobs, and they tend to pay pretty well, at least in my neck of the woods. They’re also industries with higher highs and lower lows, which would explain why men’s unemployment tends to be higher.

So if that’s the case, what’s the actual wage gap, controlling for some of these factors? There are differing opinions, but let’s take a look at four.

Factcheck.org took a look at the numbers, and found that there were all sorts of professions that paid women largely the same as their male counterparts. They also found that men tend to work longer workweeks than women, which would also skew the results. They wouldn’t throw out an actual number, but were pretty clear the 23% gap is bunk.

Consad research did some work on this for the U.S. department of Labor. Consad’s findings that once you controlled for all the different variables, the pay gap was more like 5-8%.

The St. Louis Federal Reserve did a similar study, and concluded that the gross gender pay gap was just 16.5%, and once you accounted for all the factors, the real gap was just 3.6%.

And finally, one more. The American Association of University Women concluded the real gap between wages for male and female university grads was just 6%, not the 18% gross number.

Now that we’ve put the 77 cents on every dollar myth to rest, allow me to present a theory on why the remaining gap remains. It’s simple. Women are crummy at negotiating.

It’s partially a society thing, since we label men who push for more money as assertive and women who do the same as bitchy. That needs to end, but it’ll only end as women become more comfortable with it. Hiring managers who have the company’s bottom line in mind are going to lowball potential hires. That’s the way business works.

The statistic is popular because it’s an easy explanation as to why a woman’s career isn’t taking off in the way she’d like. She’s not struggling because work is hard, she’s struggling because men are plotting to keep the whole gender down. It’s an easy and important lesson for anyone reading, regardless of their genitals. Chances are, you’re just mediocre at your job. It takes hard work to be good. Most people don’t want to do it. Just find a way to exceed expectations, and you’ll get promoted. No matter what your gender.

 

Go Ahead, Take That Loan From Your Parents

Yes, you read that title right. Even though accepting said loan will turn you into one of these.

Get it? Huh? I'm so clever.

Get it? Huh? I’m so clever.

Imagine the following scenario. You’ve spent a little beyond your means over the past few years, and now you owe $15,000 in credit card debt. Because you’re an ambitious debt repayer, you’re looking to pay off this credit card debt in just two years. Here’s a quick look at what you’re up against.

Ignore the car loan part. It was just the first calculator I found.

Ignore the car loan part. It was just the first calculator I found.

Looks like our fictional borrower is in for a couple of years of Kraft Dinner, hot dogs, and refreshing tap water. $750 a month isn’t an insignificant amount of money, and neither is three grand of interest.

But wait. One night while eating dinner at their parents’ place, our borrower starts to talk about their love of food that isn’t pasta. Upon a little prodding, the entire story comes out. Assuming our fictional borrower is a woman, there will undoubtedly be some tears, because for some reason that what they do.

After the tears, an offer emerges. Daddy would like to lend his offspring enough money to pay off the credit cards. He can see the debt is a giant burden on his kid, and can save them almost $3,000 in interest just by cutting a cheque. He’s got his chequebook literally out of his desk, all he has to do is write a few words and it’s done.

But wait! Our fictional borrower puts their foot down. There’s NO WAY THEY’RE ACCEPTING THAT DIRTY MONEY.

Oh baby. That story had everything. Where’s my Pulitzer?

One of the greatest roadblocks on the path to wealth is our pride. We decide, for whatever reason, that certain things are above us, that we hold ourselves to a higher standard than to accept that. Many investors won’t invest in shares of tobacco, alcohol, or firearm companies, because those things are bad. (Even though the same investors will happily invest in Walmart or McDonald’s, companies that help create other problems.) I can probably list the personal finance bloggers who would be willing to invest in payday loans on one hand, even though they’re happy to pimp H&R Block all over the Twitter, a company that offers refund anticipation loans at payday loan like rates.

Although we already established the payday loan industry isn’t quite as profitable as everyone believes, it still represents impressive gross margins, assuming they can figure out how to get people to pay them back.

And of course, one of the main things keeping us down is borrowing from unoptimized sources. Going back to our example above, the fictional borrower is looking at saving close to three grand by just taking the money that their parents were happy to give them. This is letting pride get in the way of financial well being, which is generally a pretty bad decision.

I’ve said it before, and I’ll say it again. Emotion has no place with your money. Getting out of debt isn’t a psychology problem, it’s a math problem. As long as you’re actually serious about paying off your debt, why should it matter if your parents help you save interest? Most people got at least a small hand as they went off to college. What’s the difference?

You think that borrowing money from your folks keeps you in a suspended state of adolescence? Hogwash. There’s an argument to be made that your parents giving you money isn’t ideal, but we’re not talking about that. We’re talking about loans, and as a borrower, it’s your duty to your money to seek out the lowest cost financing possible. It’s also your duty to pay back that loan with the same zeal as if you owed it to Visa or Mastercard.

There are other ground rules before I let you borrow from your parents. The money has to be used for something that will benefit your financial situation. No borrowing to buy an overpriced condo in Vancouver or Toronto, and no borrowing for food so you can just allocate resources to buying weed. Also, your parents can’t go into debt to let you borrow from them. Ideally, they’ll also charge you a token amount of interest too, to further cement the realization that there’s a business element to the loan.

But wait, you’re saying. Nelson doesn’t know the emotional stress that comes with borrowing money from your parents. God, it’s so degrading! I want to be a strong independent woman, who won’t lever my current advantages by borrowing at lower rates, even though I’ll lever my ability to look good in a low cut shirt into free drinks at the bar. THOSE ARE COMPLETELY DIFFERENT, DAMMIT.

Well, I hate to break it to you, but I’ve borrowed an assload of money from my parents. I invested that money in income producing assets, and used that income to pay back every single dime that I ever borrowed, plus interest. I’m not going to say how much, but suffice to say I’ve paid back a considerable chunk more than anyone’s student loans or credit cards. It’s  easy, once you treat that loan just like a loan from anywhere else.

You might be tempted to take this newfound low interest loan and delay paying it off, using it as cheap money while you pour your money into more profitable endeavors. This is when things get a little tougher. If you have financially unsophisticated parents, it’s probably not best to try it. If you do try it, it’s best to explain beforehand what you’re looking to do. Explain the merits of this new investment, and why you think it’s better to pour your cash into that.

And for God’s sake, don’t take any exotic vacations. That’s pretty much a slap in the face to your lender.

As long as a borrower does it responsibly, there shouldn’t be any issue borrowing money from family. It’s also up to family to make sure they aren’t lending money for any old reason. As long as a borrower takes their loan seriously and actually repays it to the best of their ability, they owe it to themselves to seek out the lowest cost financing. We have no problem using our other advantages to our benefit, why not that?