Money Magic draws on years of research and rigorous computation to identify dozens of practices that result in more money for readers, whatever their age or circumstances. Wealthy readers will benefit from this book as much as readers of more modest means. The author, a professor of economics at Boston University, is all about getting down in the weeds. He knows the arcane rules and how the regulations fit together in a network of benefits. He is good at extracting the strategies that maximize return, minimize risk and avoid financial land mines. He maintains that even for rich people, handling Social Security is a major retirement decision. Why? Because even if recipients don’t care about the benefit, the benefit may well push them into a higher tax bracket, which will be something they do care about. Another practice recommended by the book is for retirees to tap their IRAs first, Social Security second.

Other examples illustrate chapters on selecting the right time to retire, borrowing for college, as well as the financial consequences of marriage and divorce. Chapters are thick with examples, money secrets and advice on everything from annuities to investing like an economist.

Key Chapter

Chapter 3: “Social Security: Ten Secrets to Maximizing Your Lifetime Benefits”

Key Quotes

“In recent years, amazing algorithmic and computational advances … have changed everything. Thanks to these advances, no practical money question remains beyond economists’ ken.”

“Social Security has thirteen benefits, most of which you’ve never heard of.”

“Social Security provides an enormous incentive to delay collecting your Social Security benefits.”

“To figure out the financial cost of divorce, you need to calculate your post-divorce living standard and compare it with your married living standard.”

“Graded annuities are said to provide inflation protection, but that’s hokum.”

An Illustrated Business History of the United States is a perfect coffee table book for every advisor’s waiting area. Better yet, advisors should dip into it from time to time, because while history may not repeat itself, it often rhymes.

As this book richly illustrates, financial professionals, investors and business executives seem unable to learn from the past. This sprawling, handsome book condenses U.S. business history into 14 eras that, however far in the past they may appear to be, all continue to influence the financial dynamics of today. Each chapter features fascinating lists (the wealthiest individuals, top exports, notable inventions) as well as diverting sidebars. The main themes across the 14 eras are innovation and failure, increasing financialization and the supreme, enduring importance of real estate to all investors. The book illustrates both the genius and folly, innovation and failure of American business. It demonstrates that in many ways, the business of America is business. Author Richard Vague’s bona fides as an expert in finance are clear. He was managing partner of Gabriel Investments and the co-founder of two banks. Richard Vague currently serves as banking and securities secretary for the Commonwealth of Pennsylvania. 

Key Chapter

Chapter 9: “Excess and Depression (1921-1930)”

Key Quotes

“In the beginning there was land. This was the United States’ first business, just as it had been the source of so many old world fortunes.”

“The year 1981 stands as the greatest economic dividing line in the post-World War Two era.”

“Throughout these pages, the U.S. government will often appear in a key role since the lines between government and business had always been permeable and blurred, and to have always been an enmeshed for better and for worse.”

“As late as the mid-1960s, neither a woman nor a person of color had ever owned any of the 1,366 seats on the New York Stock Exchange. This changed when Muriel Siebert became the first woman to purchase a seat in 1967.”

“One of the most influential investment bankers of the 20th century, Charles E. Merrill, radically changed the way the general public viewed the stock market.”

Books about change abound. For this list, publishers sent me no fewer than five books on change management. None of them deliver the goods like Flux. The difference is that this book treats constant change not as an assault to be subjugated into submission but as a feature, maybe sometimes even a benefit. April Rinne is a speaker, futurist and adventurer. The last attribute may be the most important. Her exploration of the world at ground level has trained her to see change in new ways. Those insights she has encapsulated in eight “superpowers,” each one of which has helped me navigate my own relationship with change.

Advisors can learn from superpower eight: “Let go of the future.” This doesn’t mean abandoning a preference for certain outcomes. It means letting go of the illusion that you can control external circumstances. Letting go of the future enables a better future to emerge. Other superpowers are “run slower” (slowing down actually helps you navigate change if only because you can see it better); “see what’s invisible”; “get lost” (getting lost is frequently how you find your way); and “start with trust” (when trust seems broken, assume good intent).

Superpower five—“know your ‘enough’”—is particularly relevant to advisors. Knowing your “enough” brings clarity about what really matters. Knowing your enough sees through the futility of comparison and empowers you to develop your own metrics of “enoughness” rooted in internal satisfaction, relationships, resilience, discovery and helping others. The hardest job of every advisor is to have a satisfactory conversation with clients and prospects that brings clarity to the issue of what is enough. An advisor who masters this conversation can be said to have a real superpower.

Key Chapter

Chapter 5—“Know Your ‘Enough’”

Key Quotes

“If you’re not having a conversation about enough, then you’re leaving value (including money!) on the table.”

“Today’s society has dangerous proxies for enough.”

“There is a big difference between ‘too much’ and ‘not enough.’”

“Know your happiness from your contentment.”

“At the end of the day, knowing your enough means also fundamentally knowing that you are enough, just as you are, right here and right now.”

For advisors, time remains the key constraint. Working smarter is good, but since everyone, smart or not, gets exactly 24 hours per day, managing time can accomplish only so much. But managing attention—that’s a different story. A key insight of this smart and arresting book—the title refers to the number of weeks of life allotted to the average human—is that managing attention has much more upside. In other words, managing distraction is really the key.

The proper response is not to render advisors indistractable in the face of interruptions. If outside forces couldn’t commandeer at least some of our attention against our will, we’d be unable to react to Black Swan events. Not to mention that we’d be divorced from the pleasure of attending to a rainbow or a beautiful sunset. How to walk the tightrope between an attention completely indistractable and one disciplined enough to keep you on task is the central point of the book. The appendix offers 10 valuable tools to time management. The five that seem most pertinent to advisors are: Adopt a fixed volume approach to productivity; serialize, serialize, serialize; decide in advance what to fail at; focus on what you’ve already completed, not just on what’s left to complete; and practice doing nothing.

Key Chapter

Chapter 5—"The Watermelon Problem”

Key Quotes

“Attention is not a resource like food, water, money, or electricity, resources that we can manage. Attention is the stuff of life. The experience of our lives is nothing less than the sum of everything to which we pay attention.”

“It would be highly undesirable to be able to do exactly as you wished with your attention.”“Every time you open a social media app, there are a thousand people on the other side of the screen paid to keep you there.”

“Our efforts to influence the future aren’t the problem. The problem is the need that we feel, from our vantage point here in the present moment, to be able to know that those efforts will prove successful.”

As a rule, financial advisors don’t directly solve mathematical equations. Yet underpinning every spreadsheet, every click of the mouse, every trade, devilishly complicated software goes to work. Most of the time, the software is solving equations. It’s not strictly necessary for you to understand these equations. But to the extent you do, you can sharpen your decision-making, manage risk better and better identify meaningful trends. Mathematician David Sumpter holds that 10 equations make the world go round. The equations focus on judgment, betting, confidence, skill, influencers, markets, advertising, reward and learning.

Ten Equations That Rule the World can be understood on many levels. Don’t be put off by the math. While it’s great if you can follow the explanation of how the equations are constructed and applied, most of the book is accessible to readers familiar with basic high school math. Most of the book, in fact, takes the form of stories and examples about how these 10 equations allow readers to view everyday problems from a different angle. Simply stated, these equations help you think more rigorously.

Key Chapter

Chapter 6—“The Market Equation”

Key Quotes

“Equations simplify the world by condensing lots of knowledge into a few symbols.”

“The first lesson to draw from the judgment equation is that we should be slow to draw definitive conclusions.”

“Betting isn’t about predicting the future with certainty. It is about identifying small differences in the way you see the world and how others see it. If your vision is slightly sharper, if your parameters better explain the data, then you have an edge.”

“Even mathematicians don’t know how to find the true signal in the financial market’s noise.”

“The mathematics used to build our social networks were created long before that application became possible.”

Investing is noisy. Distinguishing between signal and noise is arguably job one of investment managers. The signal—the meaningful information that you’re actually trying to detect—is the goal. The noise—the random, unwanted variation or fluctuation that interferes with the signal—is what results in poor decisions.

The book is about how noise degrades professional judgment. The all-star team behind Noise: A Flaw in Human Judgment—psychologist and Nobel Prize winner Daniel Kahneman, former McKinsey partner and management professor Olivier Sibony, and behavioral economist Cass Sunstein—take advisors deep into the varieties of noise that surround them and how to recognize and manage the pitfalls that noise presents.

Advisors will be both relieved and terrified to appreciate that the amount of noise they confront in performing even the most trivial aspect of their jobs is scandalously high. That’s because noise (random scatter) as compounded by bias (systematic deviations) serves to complicate every judgment an advisor makes. The book, replete with examples that reveal the costs of poor judgment, starts with elementary principles.

One of the first lessons is the distinction between bias and noise. To detect bias, an advisor has to know what the right answer is, and how rarely can advisors argue they know what the right answer is in advance? The bulk of the book addresses methods advisors can use for reducing noise. Noise audits are not easy. Techniques include getting multiple people to make independent judgments and then bringing them together to find consensus. Appointing a “decision observer”—a leader or specialist charged with tracking and guiding interactions—often generates better judgments. Structured processes are better than unstructured processes. Models and algorithms generally generate less noise in making decisions than individuals, but as we see in today’s headlines, algorithms are not perfect.

Key Chapter

Chapter 17—“The Sources of Noise”

Key Quotes

“In professional judgments, whenever accuracy is the goal, bias and noise play the same role in the calculation of overall error.”

“A decision requires both predictive and evaluative judgments.”

“Noise in individual judgment is bad enough. But group decision-making adds another layer to the problem.”

“The second opinion is not independent if the person giving it knows what the first opinion was.”

This very personal book about finance ends with a description of the author’s Sonoma County, Calif., residence being burned to the ground in 2020 by the fearsome Glass Fire. Peter Neuwirth had 15 minutes to evacuate. What to take? In every room, there were objects of different value, utility and sentiment. Into a suitcase went his passport, will, some family photos, laptops, notebooks. Also, some baseball cards and Grateful Dead concert ticket stubs. Even actuaries can’t account for sentiment. Finally, he grabbed two books. The titles are a clue to the author’s intellectual heritage.

In Money Mountaineering, Neuwirth, trained as an actuary, reveals his investing philosophy. He shares in considerable detail how he has organized his finances. Rarely has a business author been so self-disclosing. Readers get a tightly argued discourse on investing, debt, uncertainty and the future of money. Most fun is his takedown of popular financial gurus such as Suze Orman and Dave Ramsey, whose collective advice Neuwirth demolishes as mistaken and dismisses with relish.

Key Chapter

Chapter 5—“Charlatans, Fools, and Snake Oil Salesmen”

Key Quotes

“Every person’s values, objectives, and financial situation is unique and multi-dimensional.”

“Debt is neither good nor bad but is always important—as important as your money or any other asset that you may own.”

“It is important to take full ownership of your own financial situation. Know what you can’t do yourself, and make sure those you hire are 100 percent on your side.”

“Learn to live with uncertainty and have a financial strategy that has flexibility and optionality built into it.”

“Organizing your financial life to survive a severe economic or life event is essential for long-term financial health.”

“Financial health comes from fearless self-awareness and acknowledgment of our cognitive and emotional limitations as human beings.”

Before the COVID-19 pandemic, commuting to work was considered so normalized, few people questioned it could actually be untethered from their lives. Then the pandemic hit, and millions of workers have seen the sublime benefits of subtracting daily commutes from their workdays. It’s an example of subtraction bias. Addition, we are all too familiar with; subtraction, not so much. The central theme of this meditation on subtraction is that addition bias is the default mindset. We systematically tend to add to what already exists, to opt for more over less.

Subtraction is the act of getting to less. It is not the same thing as doing less. It is not the same thing as saying no. In fact, getting to less often means doing, or at least thinking, more. To the extent advisors and organizations systematically neglect subtraction as a means of managing change, they ignore powerful strategies for solving important problems. Advisors overlook the addition bias at their peril. Recommendation: Advisors, instead of starting your day with a to-do list, prepare a lesslist.

Key Chapter

Chapter 5—“Noticeable Less (Finding and Sharing Subtraction)”

Key Quotes

“Getting to less often means doing, or at least thinking, more.”

“Da Vinci defined perfection as when there is nothing left to take away.”

“Profound advances in ideas require subtracting knowledge.”

“Weather in our bookshelves, in-boxes, or brains, intentional and regular subtraction of information is far better than the alternative.”

“Invert: try less before more. Subtract detail even before you act, as with triage.”

I’ve never been impressed with books that purport to dissect the investing secrets of billionaires by authors that have observed their subjects only from afar. This book is different. William Green, a renowned financial journalist for Fortune, Forbes and many other publications, ushers us into the lives of more than 40 superinvestors, visiting them in their offices, homes and surroundings—all to share what they have to teach us. And what an exclusive group! Richer, Wiser, Happier brings together the investing prowess of the world’s greatest giants of finance, including Charlie Munger, Jack Bogle, Sir John Templeton, Ed Thorp, Will Danoff, Bill Miller, Howard Marks, Laura Geritz and Joel Greenblatt.

Green reveals the superinvestors not just as successful mavericks and iconoclasts, but also as often flawed humans. Green has a wonderful way of drawing out these impatient and cranky individuals. His account of meeting Sir John Templeton in the Bahamas is especially telling. One limitation of this book is that Green includes only investors that he personally likes. I wonder if there would be anything new if he had included the successful investors he did not personally admire.

There are two through lines in this book: the influence of Benjamin Graham and the person of Warren Buffett. Virtually every subject in Green’s book was profoundly shaped by reading Graham’s The Intelligent Investor (1949). All the investors admire and follow Buffett, showing up at the Berkshire Hathaway annual meetings and bidding big bucks for the chance to have lunch with the Oracle of Omaha. A number of investing traits are echoed. They all invest for the long term. They read incessantly, drawing insights from different fields. They discipline their emotions. They have a high tolerance for pain. Most of all, perhaps, all superinvestors display a willingness to be lonely.

Key Chapter

Chapter 2—“The Willingness to Be Lonely”

Key Quotes

“When I asked Ed Thorp how to tell if I had an edge, he offered this discomforting thought: ‘Unless you have a rational reason to believe you have an edge, then you probably don’t.’”

“Joke about the efficient market hypothesis: A professor of finance and a student are strolling across the university campus. The student stops and exclaims, ‘Look! There’s a five-dollar bill on the ground!’ The professor replies, ‘It can’t be a $5 bill or someone else would have picked it up already.’”

“Howard Marks has a keen sense of his own impermanence. His father lived to 101, so he may have inherited a genetic edge. Even so, he knows that the odds are against his being immortal.”

Effective communication requires advisors to understand what learning style drives clients, prospects and colleagues. Most books about personality types have complicated models. This sometimes hilarious book couldn’t make it any simpler: Devora Zack, a consultant, trainer and author, quickly sets up the distinctions. There are two major types of people. The Cactus (thinker) and the Snowflake (feeler).

Advisors learn how to better communicate with clients, prospects and colleagues of different personality types. Favored Cactus words: practical, rationale, feasible, validity, logic, pragmatic. Favored Snowflake words: wisdom, compassion, empathy, intensity, harmony. Phrases, too, can be adjusted. For a Cactus: “What do you think?” For a Snowflake: “How do you feel about that?” For a Cactus: “I thought the asset performed well.” For the Snowflake: “I felt good about how the asset performed.”

Tools include practical prescriptions for vocabulary, phrasing and scripts to avoid the misunderstandings, ambiguities and conflicts that jeopardize important relationships right out of the gate. Advisors will benefit from the powerful concept of the Nonevent. For example, it’s a gusty day. For a Snowflake, every gust is significant. From the Snowflake’s perspective, the entire arc of the day becomes chaotic. For the Cactus, equally strong winds don’t even register. For the Snowflake, it is a major event; for the Cactus it is a Nonevent. The problem ensues when the Cactus judges the Snowflake’s experience as an overreaction. Both have a legitimate experience. It becomes a failure of communication if a Nonevent is allowed to derail a relationship. It’s the judgment that will create difficulties in the relationship. The labels are meant to strengthen relationships.

Key Chapter

Chapter 5—“Thoughts, Words, and Action”

Key Quotes

“I beseech you to resist judging others’ reactions. One personality variance is not intrinsically better than the other.”

“Conflict is not inherently rooted in difference of opinions. Frequently it stems from underlying gaps of perception.”

“Resist comparing my insides with others’ outsides.”

“When you wish to sway others, resist the urge to change their values.”

“Jackpot” means a large cash prize in a game/lottery or achieving great or unexpected success, especially in making a lot of money quickly. The term was originally used in a form of poker, where the pool or pot accumulated until a player could open the bidding with two jacks or better.

Everybody wants to score a jackpot, to reach escape velocity from the cares of the world. But as Michael Mechanic, a senior editor at Mother Jones, reveals, being super-rich isn’t the life of carefree ease that we fantasize it is. The ultra-wealthy people that Mechanic writes about in Jackpot make mere millionaires look like paupers. This is a tour of the lived experience of the 1% of the 1%. According to the ultra-rich individuals Mechanic interviewed, they live really well. Still, the good-times vibe is always overshadowed by suspicion, vague (and sometimes not-so-vague) threats and social isolation. Advisors to lottery winners know that almost every existing relationship the winners have will be challenged or terminated.

Mechanic’s thesis is that the relentless reaching for unearned jackpots is an activity that harms us all. Yet he admits he dutifully bought lottery tickets in his early career. (There’s a very good chapter on the safeguards that lottery winners can put in place to optimize their windfalls and hide their identities.) A major preoccupation of the ultra-wealthy is legacy: the project of making the existing wealth stretch to the next generation and beyond, shedding as little of it to taxes as possible. The third part of the book addresses how the tax code and the structural issues around racism skew the ultra-wealthy overwhelmingly male and white.

Key Chapter

Chapter 15—“Dynasty”

Key Quotes

“Money is complicated.”

“When we fantasize about being rich, we often neglect to think about how we would get there, but the journey is critical.”

“A jackpot will buy you some damn fine real estate, but you may miss the sense of community neighbors provide.”

“Extreme wealth is like parenting a demanding child. It can bring you pleasure and comfort and cry, also worry and anxiety. You will spend the rest of your life eating and nurturing it, fretting over it, and cleaning up its messes.”

“America’s tax codes are full of provisions that are absurdly beneficial for the dynasties, good for the average one percenter, decent for 10 percenters, and problematic for just about everyone else.”

One virtue of this acid satire is to confirm that Ayn Rand was the author of the very influential 1957 novel Atlas Shrugged. If Rand, who died in 1982, is found to be turned around in her grave, it’s because of Atlas Hugged, a considered takedown and rebuttal to the philosophy that individual greed and self-interest will make the world a better place. Ayn Rand (here fictionalized as Ayn Rant) spent her life trying to create a truly superior moral justification for selfishness. This lively, engrossing novel is really a set piece that allows the reader to engage with and refute the objectivism, the philosophy that influenced economists from Milton Friedman to Alan Greenspan and continues to exert a diminished influence today.

The author, a distinguished evolutionary biologist whose guiding light is the power of cooperation, believes Ayn Rand’s worldview belongs in the dustbin of history. Atlas Hugged narrates the journey of John Galt III, the grandson of the hero of the earlier novel. The novel appealingly combines philosophy, adventure, romance, science fiction, mystery and epistolary (story told in letters). It’s not a great novel; the characters display the range of emotions from A to B. No matter. The point is to replace Rand’s confining vision with a worldview that is more humane, positive, cooperative and sensitive to the environment. Yes, the book can be moralistic, but the author’s undeniable passion for a holistic view of humanity somehow justifies it.

Key Quotes

“Call me anything but John Galt. That is my name, but it is also the name of my father and grandfather. I am not like them and the world they created is not the one I desire.”

“It takes a village to be a truth seeker.”

“When I judged my father’s empire by its actions, I could see grounds for agreeing with my mother that it was evil. Its particular blend of fact and fiction deluded people into thinking that the single-minded pursuit of their own welfare was also best for society as a whole.”

“The core idea of each individual as his own God was equally comfortable wearing atheistic, religious, or populist clothes.”

“Its biggest falsehood, like the energy source pulsating at the center of the Death Star in Star Wars, was to adopt the name of objectivism, as if everything about it could be justified by rationality and science.”