Podcast Transcript

Hey, this is Daniel. Thanks for listening to DIY money. If you haven't already, be sure to give us a five-star review on iTunes, so your friends know that they can learn from the show. Now, enjoy the show! Welcome back! Ladies and gentlemen, you're listening to another edition of DIY money. What's shaking Logan? It is so cold outside. And I can't deflect, so I have to keep going on this. But it is freezing outside and I have to find inside hobbies whenever it's the winter time and I have to find stuff to do. I have been working out at my 5am club and doing that in the morning. But what do you do in the winter time when it's just absolutely miserable outside and you can't do all the outside fun stuff? I still go run. Well, yeah, you do. You're great at that. You run when it's like 20. But I have a hot tub and I, somewhere along a cold run, it pops into my brain. Soon you will be in the hot tub. And I love it. And I'm one of those people like, I mean, I know people have a hot tub, they get it, they use it for a while and they never use it again. That was a terrible thing. Does anyone in your family use it besides you? Not many. On occasion, a kid is in there and then I have to like disinfect it as they come in with like grime and grossness and stuff. I want the entire pool scrub sterilized in this disinfectant. But I pride myself on pristine water, super clear. It's just wonderful. 104 temp. And I mean, this morning I sat in there after my run, put a hat on because you know, my bald head is out. And I got to put a snow cap on. That's a nice little life hack. Put a hot cup of coffee. Oh, there's nothing better than that. It is amazing. So yeah. There's water from a glacier in Alaska. It was blessed by an Eskimo Mediterranean. Well, during the winter time, I, nice lead in, like to read books. Yeah. So it's a Friday episode and we want to go down the book avenue. Okay, we've been trying to do this for a while. Great opportunities. We're rolling into Christmas. And this will listen five days before Christmas. So maybe you need a last minute stocking stuffer and you're running out to the bookstore for that person in your life who's interested. I made an extensive list. We've been trying to do this episode for a while. We probably shouldn't have done it sooner. It's probably my fault. But I made an extensive list and I'm going to share what I think are some general investing slash money books and then some passive index sort of things, some fundamental investing, some trading, and then just a couple of fun books. So I'm going to go in no particular order. Well, I'm going to try to go into some particular order. But from a general money perspective, my two, hold on, pause. Tell me you're reading habits for every day. So you read every day, but what do you read at different, you read different things at different times? Yeah, I read nonfiction in the morning. I'm always reading some sort of nonfiction. So that would be most of these, most of these type books. Yeah, that's correct. Yeah, these would all be morning reads because I really get into these. And then I read total nonfiction at night. And then that puts me to sleep in like one chapter. So it takes me forever to read. I'm sorry, fiction, every fiction at night. And I love my books. You know, I have this, I have this funny thing on Facebook for my friends, where it's like the official non-official book club that never meets. And then I give recommendations and never knew that for years. But anyways. But I read every morning and then I read every night and I, whatever, that's what I do. So when I love nothing more when I'm on vacation to sit on a beach chair, a lounge chair, and just read. All right, general books, my two favorites, when it comes to just all around sort of finance and just how you handle yourself with money. Richest man in Babylon. Okay. I've probably read it 100 times. That's a small book. It's an easy read. Very simple. And it really keeps things in perspective to really not chase the shiny things. I would say that's the most important thing is to not chase the shiny things. That's the subject matter that I get out of Richest Man in Babylon. The second one is more of a psychological, money psychological to one of the best I've ever read. It has a hokey title, but it's called The Secrets of Millionaire Mind by T. Harveckerd. And what I like most about this book is it talks about what he calls your money blueprint, which comes typically from your upbringing, how you have been exposed to money, finances, debt, investing, et cetera. And I have inevitably had to do some real deep dives into this on myself personally. But I've also seen this when I counsel young people or even talk to clients and say, tell me about this aversion, this fear you have. Like what happened in your life to have this paralyzing fear of stocks or something like that? And it usually comes from some episode that they went through as a child. So those are just two general books that I just love. Now I'll look at this sort of the passive investing. So a lot of what we talk about, you know, passive investing, index investing, these are two of the best. One is called Random Walkdown Wall Street by Burton G. Malchiel. I think is what a Malchiel, I don't know, whatever. But Random Walkdown Wall Street is one of the best. It basically talks about how, you know, it's very unpredictable. Wall Street is all over the place, very erratic. And you really can't outperform it, right? You just have to kind of, you know, be passive and be along for the ride and understand. And this is probably the most important thing. Understand the emotional highs and lows. And again, this helps to equip you for what you're getting yourself into. The second one, same vein by John Bogle, the grandfather or father of Vanguard, largest institutional, I think index companies in the world, called a little book of common sense investing. Now, everybody should have this on your shelf. Fact you should have all these on your shelves, in my opinion. This is a fantastic book. Bogle is a legend. It's very simple. But again, more on the passive side. Now, I'm going to open some, some Pandora box here. But this is for the people who are genuinely interested more on the investing side. I would say, and we talked about this in one of our previous podcasts, I would say most people stop right there, right? Yep. You're more worried about your daily activities, your career, etc., you're not going to go down the world or the road of actual stock investing or specific company investing. But maybe you're interested. If you're interested on the fundamental side, and these are more easy reads because I would say the Bible of fundamental investing is what's called security and analysis. Security analysis written by Benjamin Graham. The professor taught at Columbia. He taught Warren Buffett in, in, it's a great book. But you have to learn how to like analyze railroad stocks and stuff. So it's, it's a very difficult read. But a very simple fundamental investing book, one of my favorites, one of the, I have actually on my, what is it called, syllabus for my kids at UK, is a book by Mary Buffett, the daughter of Warren, called Buffetology. Yeah. It introduces the way in which Warren Buffett analyzes individual company ownership. And it's a, it's a fundamental methodology, which I've kind of called the compounding book value methodology. I have completely taken it from Warren Buffett, not a bad guy to take it from. I teach this in a class at University of Kentucky. I have all the kids run these models in addition to the traditional Wall Street models, such as DCF, or just kind of cash flow, et cetera. It's a fantastic book. And if you ever decide to read the letters that are all available from Berkshire Hathaway, you can go back to the very beginning and read his letters. After you read Buffetology, the letters will make a lot more sense. So it's kind of like a key. The other one is Peter Lynch's book, One Up on Wall Street. I love this book. Every young person that is interested in stocks, I have them read this book. Another Lynch was Fidelity Magellan's famous fund manager. I'll perform the index for a very long time. His common theme was buy what you know. Buy what you know. Yeah. And he did an amazing job. He often got ideas from his kids. Some of his best ideas came from his kids. That's happened to me. But this is a fantastic, fantastic book. Again, One Up on Wall Street by Peter Lynch. Now entering into the trading world. So now you've done the fundamental. And you're like, what's this trading world all about? Here's a news flash. We talk about not being able to time the market. And that's very true. But I will tell you, I know a lot of successful traders. I mean, they've made careers of this. They have been very successful for a very long time. I would say it's less than 1% of people who go into trading. I'm just showing that out to anecdotal evidence. Most people absolutely utterly fail at trading. But if you're interested in that world, the first one I would recommend is how to make money in stocks by Bill O'Neill. Bill O'Neill started an organization called Investors Business Daily. It's a subscriptions product that's out today. I have no affiliation with them whatsoever. But his book is sort of the Bible of trading. Again, how to make money in stocks by Bill O'Neill. I'd be remiss not to push my own book called Trade the Trader. Most people don't even know I had a trading book. When I got off a hedge fund trading desk, I was approached by FT Press. That's a division of premise haul about writing a book. And I said, sure, why not? They gave me a big advance and it was wonderful. That's called Trade the Trader by Yours Truly. Virtually impossible to get a copy of the hard copy. It did a first edition. It's kind of, I mean, I'm very humbled by it. It's kind of a collector's edition. It's like going for $1,000 right now. So don't buy that. I get no money from that, by the way. I get nothing. It's like $5 bucks for a book or whatever it is. But you can get the Kindle version and it's pretty good. And I think that was written around 11 or 12, 2011, 2012. Very psychological trading, you know, which in my opinion is the most important aspect of trading. We still follow a lot of the same principles today in our own business. Similarly to how we plan our exits and entries for positions, both ETS, individual equities, etc. Come from that book. So Trade the Traders that book. And then I had to throw in two fun kind of historical stock books that I just think are if you're interested in investing and trading and just the world of this, you should check these two books out. The first is called Reminiscences of a stock operator by Edwin LeFave. It was written about a gentleman named Jesse Livermore. Jesse Livermore is famous for making $10 million during the crash of 1929. Either $10 million or $100 million. Something absurd. Absolutely absurd. It's a fantastic book. It's true. It's wonderful. Check it out. Okay. The first book you had me read whenever I started. Yeah, it's a great book. The next one is, and this is very obscure, but for traders and investors, they're very familiar with this book called, and it's Hoki Title, how I made $2 million in the stock market. By a guy named Nicholas Darvis, D-A-R-V-A-S. Now what's interesting about Nicholas Darvis and this book is they fact-checked it. I think it was written in the 50s or 60s. Maybe it was six, I don't know. He was a dancer, a professional dancer, and he made good money, and started getting brokerage tips from stock brokers, and they all stunk. And so he developed a system to trade his own account, and he ultimately made $2 million, and he then wrote a book about it. And they ultimately verified through his brokerage statements that it was accurate. He was a passive trader. It's a great book, and it's a book that is widely read today by investors and traders. So that's a rundown. That's a lot. But I think it hits all the areas and we'll have them in the show notes. I read a book about this short of thing once. Yeah, for sure. I mean, you basically took like half of the ones that I was going to say, which is perfectly fine. How dare you? A little book of common investing is one. Reminiscence is obviously one. Being the first book that you gave to me. I'll go down a different road a little bit to talk a little bit about kind of the emotional side of things. I think a fantastic book is the psychology of money. You have to read that. A lot of these books believe it or not now that Spotify has on premium. You can do and again, not affiliated. You can do like audio books on there. For some reason it's very difficult at libraries and things to find a lot of business books. So I think Spotify has a lot of these books. I just listened to the audio book of the psychology of money through the local library. But I think a lot of the ones that we've mentioned are on Spotify as well, or probably Apple and different things too. So go back and listen to those. But psychology of money is a great one to get foundations of like making sure you know that there's emotions in everything that you do as far as money goes. And you have to be aware of that whenever you're you're dealing with money along the way. You know, I was going to talk about buffodology and things too. I'll just give two insights of books that are really not financially related. But I do think it helps you from a perspective of financials because of the world we live in because things are negative a lot of the time. A one I just read recently was The Energy Bus by John Gordon. You got a, that's a great book, great like allegory type book of what you should do in your life and making sure that you're positive. So having positivity I think really makes a difference. I love that book. It's a fantastic book. It's great. Then I'm going to tell a story about one more. This is a book that when I was a senior in, or senior in high school actually, one of my teachers gave me this book, it was an English teacher. It's called Live a Thousand Years and Have the Time of Your Life. It's by Giovanni Levera. And this book was a book. I got a senior year. I read the book. It was fantastic. I think it changed my perspective on a lot of things. Again, kind of a motivational type book. Really got me excited for, you know, the next stage of life. And I went back to my teacher and I said, hey, read this book. Well, absolutely love it. It's fantastic. You know, we'll implement a lot of these things in my life. And try to give it back. They said, no, you can't give it back to me. You have to take that book and give it to someone else. And tell them to then give it to someone else. So since then, I think I bought this book three different times and given it to four different people. And they have come back to me and told me they gave it to someone else. And it's just continued to go down the line. So that's one of the things I love about reading books like this that you can then pass that knowledge on to someone else. Pretty much any of these on the list that people are interested in finance or interested in, you know, motivational things or whatever. It might be, pass that knowledge along and make sure those people can go out and read these good books because it's just fantastic. And a lot of these books that you have talked about Quinn, you've passed along to me that I've eventually read and just, it's fantastic. I love it. This has been a fun episode. There's so many great, you know, nooks and crannies of wisdom out there. I probably have 20 more. Yeah. I mean, literally I was, as I was looking at this episode and making notes and I was looking at my bookshelf. I don't keep a lot of hard copy books. Yeah. But when I find one that I really like, I'll get it. And then I'll put it on the shelf. It's interesting because I was missing a couple of them, which means I've lent them out and I didn't keep a record of it, which bothers me. So someone out there has a couple of the books that I mentioned today. If you're listening and you have that, I'll let you borrow it. Can you return it? It'd be great. It'd be fantastic. But there's so many others. And maybe we'll do a roundup of this or a bigger post or something like that. For sure, at some point, because there's so many others that are interesting. So hopefully you found some value in that. And yeah. I don't know. Anything else? I think that's it. All right, let's wrap it up. Remember, friends, the Secret 12 is pretty simple. Live on lesson to make. Invest the rest. And do so for a very long time. Make it a great one. Thanks for listening to this episode of the show. If you want your question paired on the show, be sure to send that to us and you'll get $25 and his own gift card. This show is for entertainment and educational purposes only. And it's not intended as personal financial advice. Before making any financial decision, please do your homework and consult a financial advisor is needed.