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Not many years after building a supercharged allowance system for my kids to teach them the power of compound interest, I started looking for ways to expose them to additional ideas about personal finances, economics, and life in general. I decided to institute a family book group involving my three oldest, ages 13, 15 and 18.
Our book group works by someone (usually me, but not always) selecting a book that’s interesting. We then read a couple chapters each week and on Sunday afternoon we discuss what we read. Life happens, so sometimes we skip a week or two. We mostly put it on pause last fall while we took three months to travel through southern Spain.
Here are some brief thoughts about some of our recent reads.
The Dictator’s Handbook
How do dictators, with their penchant for violence and brutality stay in power? Why do modern democracies support dictators? What’s the correlation between nations awash in easily exploited natural resources and brutal regimes? How do dictators get into power, and how do they keep their position?
These questions and their answers, along with many others, are all found in The Dictator’s Handbook: Why Bad Behavior is Almost Always Good Politics by Bruce Bueno de Mesquita and Alastair Smith.
My 13 year-old is frequently pointing out real-life situations and examples that reflect the ideas from The Dictator’s Handbook. I can tell it’s made a huge impact on his world view.
As a bonus, here’s a video interview of one of the authors talking about using principles of game theory to negotiate car purchases: https://www.youtube.com/watch?v=coWgbmlvRTU
Amusing Ourselves to Death
Written over three decades ago, Amusing Ourselves to Death: Public Discourse in the Age of Show Business by Neil Postman has aged well in my estimation. Despite having to explain some of the dated examples like Sesame Street, Ronald Reagan, and Billy Graham, the ideas remain relevant. We seem to have devolved even more in our race towards a more and more shallow culture, exemplified by Twitter wars and viral media.
This book is less about personal finance than most, but does intersect nicely with ideas around consumerism.
Part way through Pound Foolish: Exposing the Dark Side of the Personal Finance Industry by Helaine Olen, my kids were sharpening their pitchforks and lighting their torches. Unfortunately, instead of anger at the financial industry and the myriad ways they screw the everyday man, they were instead annoyed at the author for her caustic criticism and lack of concrete suggestions on how to fix the problems she criticized. I very nearly got fired from making any additional book recommendations after this one.
While I agreed with my kids take on the book’s irritations, I also thought some great points were made: there’s BIG money to be made “selling” personal finance content (I’m looking at you, Suze and Dave), the outrageous fees found in 401(k) plans and target date funds, and the predatory practices behind selling annuities, universal insurance, and other financial instruments that are sold to ignorant everyday investors. Her vitriolic style did make it difficult to swallow.
The Index Card
Once upon a time there were nine bullet points on a 3×5 index card to summarize basic financial advice, including among others: “max out your 401(k) or equivalent employee contribution”, “pay your credit card balance in full every month”, “save 20% of your earnings”, and “avoid actively managed funds”. Now it’s expanded into a 250-page(!) book, The Index Card: Why Personal Finance Doesn’t Have to Be Complicated by Helaine Olen and Harold Pollack.
Ask my kids and they’ll tell you it should have been kept as an index card. This book fell short. We read this one before Pound Foolish and I refrained from reminding my kids that Ms. Olen had written both books until after we had finished reading Pound Foolish. They found both annoying. She wasn’t nearly as biting in The Index Card as she was in Pound Foolish. It felt super stretched out.
Ask nearly anyone either on the political left or right whether the world is going to hell in a hand basket and you’ll likely get an emphatic YES!
But is it?
That’s the central point behind Factfulness: Ten Reasons We’re Wrong About the World–and Why Things Are Better Than You Think by Hans Rosling, Anna Rosling Rönnlund, and Ola Rosling. Hans was a Swedish physician who studied how the world is changing and how we think and talk about the world needs to change. It’s not all sunshine and rainbows, but the world is actually getting better faster than you think.
My kids loved this book, maybe because they have a natural tendency to gravitate towards contrarianism. Lots of graphs, charts and examples that tell a captivating story of how the world looks. Hopefully this will help them navigate the future, as the world economic “center” shifts from the Atlantic Ocean to the Indian Ocean.
Before passing away in 2017, Hans gave some awesome TED talks that I highly recommend: https://www.ted.com/playlists/474/the_best_hans_rosling_talks_yo
This is a taste of what we’ve been reading in our family book group. My goal of exposing the kids to more finance and economic information seems to be working. I’ll share more titles and thoughts in the future.
What’s on your financial education reading list? Any books you’d highly recommend that we tackle next? I’d love to hear about them in the comments.