There is a widely held view out there that greening your lifestyle is an expensive and painful process. Bach deftly explodes this myth in 192 (recycled) pages. Early on in the book he revisits the Latte Factor concept, but tweaks it a bit and suggests we find our "Litter Factor."

I have long encouraged my readers to identify their Latte Factor and eliminate it to start saving money. But small changes such as not buying coffee in a disposable cup or water in a plastic bottle not only are good for your wallet, but they actually better the planet. In the same way that "little things" add up to drain your wealth, "small changes" add up to make a big difference for the Earth.

Consider this: Every year, Americans drink more than 100 billion cups of coffee. Of those, 14.4 billion are served in disposable paper cups, enough to wrap the Earth 55 times if placed end to end! Plus, those paper cups contain a plastic lining made from a petro-chemical that would produce enough energy to heat 8,300 homes a year.

He goes on to briefly discuss bottled water, referencing what I think was the best article published last year--Charles Fishman's Message in a Bottle. This is just a snippet of the first chapter, but it contains advice that, if taken, can lead to serious change... and save you money to boot. The rest of the book has equally clear and concise thinking and advice that ranges from how to save money by becoming energy smart, to shopping green, to going green at work. The steps to going green and energy-efficiency aren't necessarily going to be completely new to people, but Bach revealing how taking them is ultimately cost-efficient probably will be.

You'll be hearing much more from Bach on this issue. His first stop will be on the Today Show next Monday discussing seven green steps that can save you 3,000 dollars a year. The book itself will be hitting the shelves on Tuesday of next week, and I think you could consider it's $14.95 list price as an investment in the future of your finances, and maybe, even the future of planet as well.

Copyright (c) 2008 Jordan E. Goodman

10 Strategies: An Overview

Fast Profits in Hard Times will teach you everything you need to know and give you specific resources (websites, toll-free numbers, etc) to implement the following 10 strategies:

1. Invest in Tax Liens
   Buy liens placed on properties by municipalities because owners have fallen behind in paying their property taxes. Then, when the property owners pay what they owe to the municipalities, receive not only a return of your principal but also a penalty interest rate set by the municipality, typically in the range of 8% to 25%. If the property owner defaults altogether, take possession of the property for a fraction of its real value: the sum of the back taxes you've already advanced. You can then sell the property, even a bit below its market value, for a huge profit.
2. Buy Real Estate Below Market Value
   
   Identify real estate sellers who are willing to accept less than their property's full market value for a variety of reasons. Then resell the property immediately at a profit, rehab it, rent it out, or even live in it yourself, all with the built-in financial cushion of having purchased the property for far less than it is truly worth.
3. Invest in Income Trusts and Master Limited Partnerships
   
   Earn high yields of 8% to 13% by investing in trusts that extract or transport natural resources such as oil, gas, coal, or timber. Such trusts pass a large amount of their earnings directly to investors through monthly dividends. Depending on the trust or MLP, some of the distributions may be considered a tax-free return of capital, boosting your after-tax return even more.
4. Invest in High-Yield Stocks
   
   Invest in stocks with stable businesses that pay dividend yields of 5% to 15% or more. Some industries offering such high yields include electric utilities, oil tankers, and real estate investment trusts, and several broad-based closed-end mutual funds. This is a way to make your capital compound with very little risk when you reinvest the dividends or to boost the income you live on if you take the dividends in cash.
5. Enroll in Dividend Reinvestment Plans
   
   Invest in companies that offer Dividend Reinvestment Plans, known as DRIPS, which allow you to use dividends to purchase shares directly and thus bypass brokerage fees. Automatically reinvest dividends back into further stock purchases, thereby compounding your portfolio's assets over time. Several companies offer discount DRIPS, meaning that you get an additional 2% to 5% bonus every time you reinvest dividends, compounding your return even more at no additional cost to you. So if you get $100 in dividends, you receive $105 worth of stock when you enroll in a 5% discount DRIP.
6. Buy High-Yielding Bonds
   
   Buy bonds of companies, municipalities, or foreign governments, either individually or through open and closed-end funds, which pay yields of 5% to 12%. In addition to the high rate of interest, you will receive the return of your principal when the bond matures. There are many types of hybrid bonds available in today’s market with catchy names like STRIDES, ELKS, MITTS and HITS which offer guaranteed return of principal, high yields and potential bonuses based on how the underlying instruments perform.
7. Use Put and Call Options
   
   Rather than buying and selling actual stocks or stock indexes, you can, for a fraction of the cost, trade rights to buy and sell those stocks or stock indexes at specific prices within a specified period of time up to two years into the future. This form of leveraged trading allows for far greater gains but also runs the risk of far greater losses than normal stock investing. It is therefore imperative to follow careful strategies that limit risk while optimizing profits.
8. Profit from Foreign Exchange Trading
   
   Trade one currency against another currency, on the expectation that the currency you've bought will gain in value relative to the one you sold. This provides a convenient way to profit from the decline of the US dollar against most major foreign currencies.
9. Invest in and Broker Cash Flow Opportunities
   
   Identify people and/or businesses willing to sell future receivables at a significant discount in exchange for ready cash. Then either buy the payments yourself or serve as a broker for a third party, typically a large financial company, which provides the funds. For example, you can broker or buy cash flows from lottery winners, lawsuit winners, mortgage notes or reimbursements due to a doctor’s office from insurance companies or Medicare.
10. Set Up Passive Income Strategies
    
    Set up some kind of system that needs minimal ongoing management but continues to produce significant cash flow far into the future. A few examples include:
    
    • placing vending machines in high-traffic locations to collect passive income whenever customers make purchases
    
    
    • placing ATMs or point-of-sale (credit/debit/card swipe) machines in high sales volume locations to earn small fees paid by merchants whenever customers use the machines
    
    
    • Buy high-quality timeshares in desirable locations and seasons and rent them out over the internet to earn substantial rental income

Copyright (c) 2008 Jordan E. Goodman

Author
Jordan E. Goodman is a former Money magazine journalist and the author of several bestselling books, including Everyone's Money Book, The Dictionary of Finance and Investment Terms, and Master Your Money Type. He provides financial advice to millions of people each month through regular appearances on radio call-in and TV shows and through his seminars to corporate, association, and university audiences. He has been a regular contributor to NBC News at Sunrise, The Marketplace Morning Report on Public Radio, and many other shows. He hosts a popular financial resources Web site, www.moneyanswers.com, and is the host of The Money Answers Show on the VoiceAmerica Radio Network at www.voiceamerica.com. You can find out more about this book at www.fastprofitsinhardtimes.com.

Fast Profits in Hard Times

The charm of the book rests in Bogle’s sharp wit and spicy writing. Here’s a passage I particularly enjoyed:

As investors, all of us as a group earn the stock market’s return. As a group—I hope you’re sitting down for this astonishing revelation—we are average. Each extra return that one of us earns means that another of our fellow investors suffers a return shortfall of precisely the same dimension. Before the deduction of the costs of investing, beating the stock market is a zero-sum game.

But the costs of playing the investment game both reduce the gains of the winners and increases the losses of the losers. So who wins? You know who wins. The man in the middle (actually, the men and women in the middle, the brokers, the investment bankers, the money managers, the marketers, the lawyers, the accountants, the operations departments of our financial system) is the only sure winner in the game of investing. Our financial croupiers always win. In the casino, the house always wins. In horse racing, the track always wins. Investing is no different. After the deduction of the costs of investing, beating the stock market is a loser’s game.

The Wall Street Journal attempted to talk about the category on their Weekend Edition. This is the most important part of the article:

[J.D. Roth's Getting Rich Slowly], rated highly by Technorati, a search engine for blogs, includes advice about choosing books like this: "Many books -- especially the good ones -- give similar advice: pay yourself first, establish an emergency fund, don't spend more than you earn, diversify, etc. Sound personal finance is basic stuff."

It is an opinion seconded by academics even more grounded in the field. "Any book that suggests it has a new way to riches should probably be a little suspect," says Prof. Kenneth Froewiss, a finance professor at New York University Stern School of Business. A good book about personal finance, he says, always elaborates on three simple themes: Save early, know your risk tolerance and diversify.

I think I proved my point.

Delightful examples follow from a variety of disciplines. The short period over which the average company can sustain a competitive advantage is likened to the lifespan of a fruit fly. The fatal risks of imitation by money managers are illustrated by ants who tend to follow one another in an endless circle, marching on and on until death. Mr. Mauboussin explains how Tupperware parties, where people buy lots more stuff than they need, provide important lessons for stock-market investors; how Tiger Woods's decision to change his golf swing even when he was winning reflects the "fitness landscapes" concept in evolutionary biology; and why gambling legend Puggy Pearson can help you be a better investor ("Ain't only three things to gambling: Knowin' the 60-40 end of a proposition, money management, and knowin' yourself").

What is also great about the review is the author--Burton Malkiel. He is the author of a different book you should be familiar with--A Random Walk Down Wall Street.

Jack and I both highly recommend this book.

1. How do I get out of debt
2. What do I do with all my extra money now that I am out of debt.

The books of William Bernstein are for those who have extra money and are trying to figure out a way of investing it for the long-term. He believe in index funds and asset-based investing as the best path to success.

[a short pause while short-seller, derivative traders, and commodity brokers file out of the room]

For all of you still reading, I throughly recommend both of his books. Bernstein recommends The Four Pillars of Investing to "the liberal arts audience" and The Intelligent Asset Allocator "for the sophisticated investor".

In the first book, Bernstein explains the Four Pillars as history, theory, psychology, and business. He takes time to explain how "The Market Is Smarter Than You", how "Your Broker Is Not Your Friend", and "Neither Is Your Mutual Fund". He ends the book explain how to create a portfolio of the right asset types to minimize risk while maximizing returns.

In The Intelligent Asset Allocator, you need to already be on the bandwagon. He spends a little time talking about historical returns and the wide variation of the last 80 years. Shortly thereafter, the reader will find themselves in the world of standard deviation, correlation, and mean-variance optimizers. This is for the investors who has already drunk the Kool-aid and now wants to mix some for themselves.

• Money Masters of Our Time by John Train (HarperCollins, 2000)
• Capital Ideas by Peter Bernstein (Free Press, 1991)
• Winning the Loser's Game by Charles Ellis (McGraw-Hill, 2002)
• The Four Pillars Of Investing by William Bernstein (McGraw-Hill, 2002)
• Fooled by Randomness by Nassim Nicholas Taleb (Thomson Texere, 2004)

Read Clements' commentary on each of the books at the WSJ site.

Stanley Bing provided his Five Best on Saturday. He recommended Art of War, The Prince, The Godfather, Emily Post's The Etiquette Advantage in Business, and The Cat In The Hat. In this case, it is all about the commentary. Bing looks at the Dr. Suess tale as "a clever evocation of what happens to a corporation when a management consultant is hired by absent, clueless senior management to evaluate its organizational structure and to effect change." As I said, I suggest the commentary.]]> Personal Finance and Investing 2006-05-08T14:44:51-06:00 http://800ceoread.com/blog/archives/006190.html Here is a dump of some of those links that have been building up in my bookmarks: Charles Fishman walks around Wal-Mart with Washington Post reporter Bob Thompson and talks about The Wal-Mart Effect. Andy Kessler reads alot of... 6190@http://800ceoread.com/blog/ Here is a dump of some of those links that have been building up in my bookmarks:

• Charles Fishman walks around Wal-Mart with Washington Post reporter Bob Thompson and talks about The Wal-Mart Effect.
• Andy Kessler reads alot of business books, but doesn't know why because they mostly suck. He does see our view of the new business book as one that shows you a different way of viewing the world. He says Mr. China, Wisdom of Crowds, The Hypomanic Edge, and Everything Bad Is Good For You are examples of books that help you see into the future.
• Biz Book Talk reviews Lee Eisenberg's The Number.
• Business Evolutionist gives his take on A Whole New Mind.

• In Search of Excellence by Tom Peters and Robert Waterman (1982)
• Built to Last by Jim Collins and Jerry Porras (1994)
• Reengineering the Corporation by Michael Hammer and Jim Champy (1993)
• Barbarians at the Gate by Bryan Burrough and John Helyar (1993)
• Competitive Advantage by Michael Porter (1998)
• The Tipping Point by Malcolm Galdwell (2000)
• Crossing the Chasm by Geoffrey Moore (1999)
• The House of Morgan by Ron Chernow (1990)
• The Six Sigma Way by Peter Pande et al (2000)
• Seven Habits of Highly Effective People by Stephen Covey(1990)
• Liar's Poker by Michael Lewis (1989)
• The Innovator's Dilemma by Clayton Christensen (1997)
• Japan Inc. by Shotaro Ishinomori (1988)
• Den of Thieves by James Stewart (1991)
• The Essential Drucker by Peter Drucker (2001)
• Competing for the Future by Gary Hamel and C.K. Prahalad (1994)
• The Warren Buffet Way by Robert Hagestrom (1991)
• Jack: Straight from the Gut by Jack Welch with John Bryne (2001)
• Good to Great by Jim Collins (2001)
• The New New Thing by Michael Lewis (2000)

They also organized the books and you will find some good commentary under the topics of management, narrative, biography and investing.

Wiley has published a book by three moderators from a Morningstar message board. The Diehards forum was started in 1998 and deals with the teachings of John Bogle, founder of Vanguard mutual funds. Their site brings in 25,000 people a day and can have hundreds of posts with people asking questions.

In The Bogleheads' Guide to Investing, Taylor Larimore, Mel Lindauer, and Michael LeBeoeuf are about making it simple for beginners. You will find sections on making sure your savings enough, asset allocation, and taxes. John Bogle has even written the foreword to the book and we have posted it over on the excerpt blog.

So, here are the books we think you should be watching for in the first part of 2006.

• The Number by Lee Eisenberg (1/06, Free Press) - If you have walked into any Barnes & Noble since New Year's it would have been impossible to miss this book. We think it is a great book. Eisenberg takes Gladwell-like look at the complexities of retirement. As I said in my prior post, this one had me on an emotional rollercoaster. It is a great book and one everyone should read.
• The Wal-Mart Effect by Charles Fishman - The long-time Fast Company editor writes an amazing book on what drives Wal-Mart and how that drives our economy. He has firsthand accounts from employees who started some of the company's biggest businesses. He also talks with suppliers about what it is like to work with the retail giant. What Fishman does best is shed some light a company that the public really doesn't know much about.
• Silos, Politics, and Turf Wars by Pat Lencioni (2/06, Jossey-Bass) - We have just started reading this one, but it is hard to bet against this author after the classics of Death by Meeting and Five Dysfunctions of A Team.
• The Ultimate Question by Fred Reichheld (3/06, Harvard Business School Press) - Reichheld has been writing books on customer loyalty for a number of years. He has done the research to show that you can ditch all the 47 question satisfaction surveys and ask your customers one simple question - "Would you recommend us to someone else?"
• The Radical Edge by Steve Farber (4/06, Kaplan) - Jack just got done reading the manuscript and he says he may like it more than Radical Leap. Many of the familiar characters are back. This time, it is about taking personal responsibility and living life on your terms.
• Questions of Character by Joseph Badaracco (4/06, Harvard Business School Press) - The subtitle says it all -- "Illuminating the Heart of Leadership Through Literature". The book is based on a class taught by the author at Harvard Business School. He says that fiction offers a unique way to teach leadership. It is possible to truly know what the characters are thinking, versus learning tools such as interviews and case studies. I think it is brilliant.

• Smart and Simple Financial Strategies for Busy People by Jane Bryant Quinn.
• The Wall Street Journal Complete Money and Investing Guide by Dave Kansas
• The TurboTax 2006 Income Tax Handbook edited by Anna Isgro

• The IRS Problem Solver by Daniel Pilla
• Confessions of a Tax Collector by Richard Yancey
• What The IRS Doesn't Want You To Know by Martin Kaplan
• Tax This! An Insider's Guide to Standing Up To the IRS by Scott Estill
• J.K. Lasser's Your Income Tax 2006 by the J.K. Lasser Institute

Blaustein also has a book called How to Do Business With the IRS: The Complete Guide for Tax Professionals (out of print).

We have seen this book coming ever since this summer. Free Press has gone to extreme lengths to make this a big book. We got the manuscript in July. Jack and I both read it. We thought it was brilliant.

The publisher printed 3,500 hardcover preview copies. That is unheard of. Publishers never want to spend this kind of money to promote a book. We used 100 copies of the special edition to spread to our movers and shakers.

This Saturday, I was in Barnes and Noble and the book was everywhere. It was on the front table. It was in personal finance section. There was even a special table sitting next to the checkout line with a sign asking "What is Your Number?"

Jeffrey Trachtenberg wrote a piece last month for the Wall Street Journal talking about all that Free Press has done to roll this book out. What is missing from the article is one thing -- the book is really good and that is why it will do well. In three months, people will be talking about this book like they talk about Freakonomics.

Let's get past the hype. This weekend, the book was reviewed in the Wall Street Journal by Glenn Ruffenach, editor for their retirement sections. Ruffenach's biggest problem with the book is that Lee Eisenberg suggests tried and true methods for reaching retirement with the money you need. I have two responses:

1. Doctors tell people to eat right and exercise if they want better health. Yet, most people don't want to follow the advice that has been confirmed in study after study. Savings of 10% to 15% of your paycheck and spreading your investments are also great ideas that people can't seem to follow. People don't need new ideas; they need to follow the ones that are already proven.
2. The reason that this book is going to strike a chord is because it is written in a wonderful narrative. Eisenberg has pulled together a wonderful set of stories that allow people to internalize the complexity of the topic. The stories stick with you. I don't remember the last time I read a book that sent me on a emotional rollercoaster like The Number did. I was clinically depressed halfway through the book, but like any good writer Eisenberg brings you back and gives you hope.

I think the storytelling is going to help people appreciate the simple but tough things that they need to do to prepare for retirement.

One more time...just so I am clear- go read The Number.

Battle tackles the systematic rot gnawing at the effectiveness of large corporations, the power of small investors to beat the system, and the integrity of enterprise as many of us see it. Bogle cites isolates trends that other writers have noted, such as out-of-control CEO compensation, the dereliction of duty by boards, the systemic siphoning of profits away from investors by conglomerate-owned managed funds, and weaves them all together into a compelling overall argument. Not only that, but he writes wonderfully, to boot. It’s hard to argue with a book so smart and persuasive. The first chapter is available online as an excerpt. Here’s a nugget that I particularly enjoyed:

Over the past century, a gradual move from owner’s capitalism—providing the lion’s share of the rewards of the investment to those who put up the money and risk their own capital—has culminated in an extreme version of managers’ capitalism—providing vastly disproportionate rewards to those whom we have trusted to manage our enterprises in the interest of their owners. Managers’ capitalism is a betrayal of owners’ capitalism, a system that worked, albeit imperfectly, with remarkable effectiveness for the better part of the past two centuries, beginning with the Industrial Revolution as the eighteenth century turned to the nineteenth.

Earlier this fall I had the chance to do a question and answer with the man called Jack. Here’s what he said.

Q: Jack, you are one of the most influential investment figures of the past 50 years. Why have you written this book?