The inspiration behind Monevator.com is a family member close to my heart. He retired a few years ago at 64 years of age.
He’d managed to retire a year early. He’d wanted out for a decade beforehand, but he couldn’t afford to leave.
If money was tight, why did he cut and run at 64, instead of sticking it out until 65? I’d love to say that at 64 he suddenly discovered his inner hippy, or better yet a winning lottery ticket down the back of the sofa.
Alas, he had been diagnosed with cancer. He realised that he didn’t want to spend another day working in a job he was sick of, to contribute to a pension he might never see.
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Don’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.
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!
You’ve bought a share and – ye gads! – it’s gone up 30%. Should you sell it and take the profit? It sounds like a simple question, but the answer, my friends, is complicated and controversial enough to give us the stock market we know and love, with all its wild oscillations in share prices, swings of fear and greed, bubbles and bursts and even the odd lonely leap from a bridge.
Buying a house in Britain today costs a lot more than renting it. Fair enough, you might think: Home owners have seen prices triple in the past decade, so it’s understandable that it should cost more to buy your suburban castle and so potentially profit than to merely rent it. But wait a minute: If renting a house is cheaper than buying, how is the landlord going to make any money?
