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The Armchair Economist

21txs7qssml_aa_sl160_.jpgDon’t smirk: Settling down with a good book on investment can be oddly soothing. As the light dawns over your financial blackspots, panic is replaced by calm. Before long you’re scanning the Financial Times with aplomb, and even reading the small print. (Well, not all the time: I’m currently enjoying Harry Potter and the Deathly Hallows).

With that in mind, I’m going to recommend a few favourite books that I think will at the very least make (or save) you more money than they cost.

First up is The Armchair Economist by Stephen E. Landsburg.

In the mid-1990s I visited a friend who’d moved to New York to work on Wall Street. He was involved in arcane research far from the trading action, but despite this he seemed to have plugged into a new understanding of money, and how it made everything in the economy tick. He’d be grabbing cabs between the main and pudding courses at restaurants to take his clothes to the dry cleaners, and explaining over his shoulder that it saved him approximately 23% compared to his hourly wage rate to do this, or some such nonsense.

It was clearly ridiculous, but also a rather impressive way to think. He went further too. He would walk past shops and predict which special offers would work, and which wouldn’t, and explain why. And he knew why popcorn was sold for $5 at the cinema, despite costing $0.50 from the corner shop outside.

I put his money obsession down to the ‘big swinging dicks’ that he was hanging out with on Wall Street. Actually, it later transpired he hated his job and was launching a secret career during snack breaks, and reading The Armchair Economist while waiting for his research results to compile. I only found out the source of his newfound financial nous after he airmailed this paperbook book to me when he left New York.

I devoured The Armchair Economist over a weekend (it’s a very easy read) and proceeded to plague my friends with talk of it like it were a new girlfriend – just like my friend had with me – for a fortnight. Although I did keep to doing my own laundry…

After this dizzying spell, the book quietly drifted into the background, and ever since I’ve taken everything it taught me for granted (just like, alas, a not-so-new girlfriend…)

In short: To understand how economics can help explain every facet of society and many of our subconscious everyday decisions – in a fun way – I firmly recommend The Armchair Economist (which you can buy now from Amazon). You’ll be nutty for a week or two after reading it, but wiser for life!


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