The Richest Engineer - Book Review

'The Richest Engineer' is a self-help book on personal finance written by Abhishek Kumar. Although the book is an amalgamation of various aspects covered in other books such as 'Rich Dad Poor Dad' and other articles in the net, it is presented very well in the form of a story. 

The story revolves around 2 young lads - Ajay, who is struggling financially due to poor investment decisions and Vinay, his friend, who leverages the financial advice his dad has shared with him. The young lads learn the art of personal financing from each other's experiences, letters from Vinay's dad and through interactions with their classmate Manisha, their football coach and other acquaintances. The term 'rich person' is loosely used to refer to financially successful people and the author has generalized the traits of rich people, to land the key message. The book should be a good refresher on personal finance for everyone and more useful for someone who is starting their career. The book discusses the  key concepts, mindset change and ethics required to be financially successful. Also be aware that the book was written 3 years ago and there were a few changes to facts mentioned in the book (post recent budgets) such as tax on dividend income, gains in stocks, etc., 

Below is a summary of my 'Kindle notes' on the book, which are key takeaways for me.

• In Indian movies directors depict poor and middle-class person as good guy and rich people as bad and evil in order to win the sentiment of the majority (who are poor). Hence people consider as a taboo if someone says I want to be rich, but in reality, money is essential for a happy life. In fact the notion that rich people become rich by getting money from poor people is incorrect. For instance, GDP of almost every country increases year on year. The value of entire set of properties in an area increase, when a new IT park comes-up in that area. So net worth is not something that is transferred from X to Y.
• Rich people have a few traits and those are key to be financially independent. 
• Poor people have victim mindset  & use it as excuse to blame it on others, fate, etc., which might temporarily make them feel good. However, what is needed is to own the problem and be self critical with growth mindset (rich).
• Rich people look at opportunities when presented with a problem space. Poor people focus on what can go wrong, which is a huge deterrent to start/ make progress. Although rich people don't have solutions to all problems, they start and find ways to overcome the problems they encounter. 
• Poor people stop learning and do same thing again and again. It is important to innovate and learn continuously. The author shares a story on how a wood-cutter who sharpens his axe before cutting every tree, reaps more rewards than others.
• Poor people talk about income or salary and loose track on how much is their net-worth. It is important to consider oneself as a 'company' tracking their financial portfolio and net-worth (asset - liability).
• Track net-worth every 3 months. 
• Take financial decisions and re-plan based on the assessment.
• Invest first, before you spend (and not the other-way around) => Keep aside at least x% of your gross income no matter how little you earn. Similar strategy for bonus and other increments you get => Consider your savings as % of your income and expenditure in absolute value, so you have control on expenditure.
• Every investment can be grouped into three classes - good, bad and ugly. An asset is good asset if it grows your income and it's intrinsic value also grows over a period of time, such as real-estate, rented house, gold, stock market, etc.,
• Assets such as own house (with long EMIs) are not good assets as it is not increasing your income & one has to spend towards recurring monthly EMIs, which is a liability. However, own house bought with a small % of your savings (say, 20-30% of ones portfolio) is not bad, given it's other non-tangible benefits such as 'feel good' factor, stability, etc., and that it's value grows over a period of time.
• Similar to a football game, one can win financially, if they can have a strong offense (increase income) and defense (lessen expenses). 
• For professionals, the strong offense  (income) has to be their primary job, which contributes significant part of ones income.To maximize the potential of ones income from their primary day job, below are key aspects.
• Work in the area/ job that you love the most => This translates into more energy and effort and helps you to deliver maximum impact.
• Be the best in your field to reap high rewards. For instance, 'jawed habib', hair dresser, earns more than many other business men, professionals or actors, because he is best in what he does.
• Maximize the opportunity space and diversify (within the context of your primary skill) => For instance, can you earn more by part-time teaching or technical blogging or writing books, in your primary area of expertise.
• Continuous learning and innovation => you can't expect growth doing the same thing again and again.
• Learn to play big => Higher risks reap higher rewards. There is no point in playing safe, if you are not using your full potential. 
• If you want to be rich, don't succumb to Diderot effect - buy only what is needed. It is an interesting story on a man who had to refurbish his entire house and wardrobe to match the bar of an expensive gifted dress. 
• 100 rupees saved is worth more by 30% than 100 rupees earned - thanks to taxes.
• Build strong passive income and portfolio that generates revenue and build assets. For instance, royalty, rental income, franchise, etc., that doesn't require your physical presence or time are good examples. This should form significant part of your income over a period of time to gain financial independence. 
• If you need to save on taxes, consider starting a company and invest through the company instead of as an individual. It makes a lot of difference as for corporate tax is computed on profit and not on absolute income. 
• Network with like minded people and avoid people with negative energy.
• Last but not least, once you become rich, pledge to give back to the society, in the likes of Bill Gates and Warren Buffet.

Overall, a very good book that can be read in real quick time. I really like the way the book is concluded - 'Only way to buy happiness is to give happiness'. 

Europe for a Bargain - Book Review

'Europe for a Bargain' is a travel book written by Aditi Mukherjee. It talks about the author's first-hand travel experience to Western Europe - UK (London), France (Paris). Belgium, Germany and Switzerland. It is a short book of ~60 pages and it can be easily read from start to finish, in a flight journey from Hyderabad to Delhi.The icing on the cake is that it is part of 'Kindle Unlimited' and 'Amazon Prime Reading' (free read with Prime Membership), which makes it even more interesting to read the book.

The book starts with Aditi's decision to sign-up with a travel agent for a group tour to Western Europe for 10-11 days and captures her experience starting from the visa appointment. The author has a very good sense of humor and uses satire very well in sharing her views on serious topics such as racism/ rape in India. The book has a lot of interesting facts and trivia such as - 'when the sun shines the Eiffel tower grows taller by 6 inches'. It also has useful tips such as 'carry sunscreen and dark shades (sun glasses) while climbing Mt. Titlis even when it is freezing cold, as UV exposure increases by 10% for every 3280 ft above sea level'.

However, it is not clear if it is a story book or a travelogue. If one treats the book as a travelogue/ travel guide, it misses a lot of critical information on how to save money (only mention is in the title of the book), where to book tickets, etc., The fact that the author has spent only a max of 1-3 days in each of those countries shows-up in the breath and depth of travel related information on those places. If you read this as a story book, there are clearly no twists or turns and there is hardly any events. The book is an amalgamation of facts and trivia, and the author's good sense of humor makes it an interesting read. 

Even with all its shortcomings, I still think it could be really useful for Indian readers who are aspiring to travel to Europe for first time, to understand what to expect in Western Europe, especially during group travel, from the perspective of an upper middle-class Indian traveler. 

The No. 1 Ladies' Detective Agency - Book Review

'The No.1 Ladies Detective Agency' is a book written by Alexander Smith. It is a short read - around 220 pages that could be read in a few hours. 

Like my last book, the main character of the book is a women - Mme Ramotswe, which is a pure coincidence. As the title goes, it is about a detective and how she uses her instincts and her unique skills to solve several cases. It is a very light read and the cases themselves are very shallow - unlike other detective stories (oh no- comparing with Sherlock Holmes is injustice), there are no major twists or turns, and Mme Ramotswe solves majority of the cases within 1-2 trips to the spot. There are no fight scenes or heated arguments and Mme Ramotswe solves all of the cases, all by herself including the trips to meet the convicts across the country and in one case all the way to South Africa. 

The story is set-up in Botswana, Africa and one would learn a few things about history, geography and culture of Botswana, Rhodesia and South Africa. It is ironical that the African story was written by a white British author.There are also brief references about how Botswana was fortunate to be led by good men, who helped it shape as one of the wealthiest nations of Africa, when it was relatively poor at the time of independence in 1966. It also touches upon the culture and life-style of African men.

Overall, it is a short read and a feel-good story. I would rate it 3 (out of 5).

'A Thousand Splendid Suns' - Book Review

'A Thousand Splendid Suns'  is a novel written by Khaled Hosseini. The story is that of two Afghani women Marriam and Laila, and how they survived the tough conditions for women, in Afghanistan, during the war period.

While the story is a fiction, the narration of events and happenings in Afghanistan depicted in the story are facts. Hosseini has used this novel to show the world, the struggle of Afghanistan during the 30 year old period involving Soviet invasion, internal conflicts and the regime of Talibans. Through the two lead characters, the author depicts the level of freedom women had during the Taliban period. It is hard to imagine the hardships women had to go through in Kabul and rest of Afghanistan during that period, where women were not allowed to study/ work, walk alone in streets or laugh in public. There were separate hospitals for women and men, and the facilities in women hospitals were far worse and the doctors had to operate in burqa with only their eyes and fingers unclothed.

In spite of hardships and struggle that both Marriam and Laila had to undergo, they never gave-up. While Laila had a good early-life, Marriam's life is a struggle all along. Looking at their lives, we are extremely fortunate to be living in a safe place and we need to draw happiness from small joys in life such as having tea with loved ones or a movie/ holiday trip with family.

Kudos to the author for making a serious story, into an interesting read. He puts the readers in the town, streets and houses of the characters, through vivid description. It is one of those novels that makes you go back to the web, to search about facts/ events mentioned in the novel. The author himself has called-out the fictional parts of the narration at the end of the book.

In short, I thoroughly enjoyed reading the novel. 

Made in Japan - Book review

Kart's rating - 4/5

'Made in Japan' by Akio Morito is arguably one of the best books I have read so far. Yes - It's a book written by the co-founder of SONY, one of the most successful electronics companies in the modern world. It was not only a good book on management but also provided me deep insights on the world affairs and Japanese culture; As and when I read the book, I stood on the shoes of Morito and analyzed how I would have reacted to those situations - it really was an interesting exercise (though you could call it as childish exercise), which helped me to understand how good a manager he is/was.

At a quick glance, one might feel that he was flattering the Japanese - their culture, their management skills, their technology, their work quality, their working style, and what not.... Initially, I got an impression that he was biased and was trying to sell Japan to the rest of the world. But, in retrospect, I am tempted to second his view. Japan, like a Phoenix bird, rose from the shambles after the world war II. The kind of economic growth they had after world war II was really remarkable, given that they are /were neither blessed with rich mineral wealth like Russia or USA, nor oil/natural gas like the Arabian countries. They are just a small island, cursed with active volcanoes and deadly earth-quakes; It was terrible to know that many Japanese were unfortunate enough to see Tokyo rebuilt thrice after destruction - once after world war II and twice after earth quakes, which shook Japan in the last century.

I always believed that attitude determines everything - when Sony was founded by Akio Morito and Ibuka, two creative young and creative engineers, they had no positive atmosphere for starting a company. They found it very difficult even to get a decent work place and the basic raw materials to build their electronics product. But within few months after the world war, Sony and other Japanese were not worrying about the havoc caused during the world war but rather they were looking ahead.

In his book, Akio Morito has expressed a very strong view on almost everything. He openly criticized his fellow company mates, his competitors and infact some of his own decisions. His views on the world economy, the economic development across the world, the management strategies employed by the west vs Japan were all very informative. His decisions in tight situations were spot-on most of the times, though some of them were learning experiences.

In short, 'Made in Japan' was an interesting and informative read.

PS: I wrote a part of the review long back (4-5 months back) when I read the book. But, I didn't find time to continue it until now, so the blog might lack coherence.

The Monty Hall Problem!!

Kart's rating - 4/5

There used to be a column called Ask Marilyn in a magazine called Parade in America. She had the highest IQ in the world and in the column she answered maths questions sent in by readers. And in September 1990 this question was sent in by Craig F. Whitaker of Columbia, Maryland.

"You are on a game show on television. On this game show the idea is to win a car as a prize. The game show host shows you three doors. He says that there is a car behind one of the doors and there are goats behind the other two doors. He asks you to pick a door. You pick a door but the door is not opened. Then the game show host opens one of the doors you didn't pick to show a goat (because he knows what is behind the doors). Then he says that you have one final chance to change your mind before the doors are opened and you get a car or a goat. So he asks you if you want to change your mind and pick the other unopened door instead. What should you do? "

Marilyn vos Savant said that you should always change and pick the final door because the chances are 2 in 3 that there will be a car behind that door.

But if you use your intuition you think that chance is 50-50 because you think there is an equal chance that the car is behind any door.

Lots of people wrote to the magazine to say that Marilyn vos Savant was wrong, even when she explained very carefully why she was right. Of the letters she got about the problem, 92% said that she was wrong and lots of these were from mathematicians and scientists. Here are some of the things that they said

I'm very concerned with the general public's lack of mathematical skills. Please help by confessing your error. -- Robert Sachs, Ph.D., George Mason University

There is enough mathematical illiteracy in this country, and we don't need the world's highest IQ propagating more. Shame! -- Scott Smith, Ph.D., University of Florida

But Marilyn vos Savant was right. And here are 2 ways you can show this.

Firstly you can do it by maths like this

Let the doors be called X, Y and Z.

Let Cx be the event that the car is behind door X and so on.

Let Hx be the event that the host opens door X and so on.

Supposing that you choose door X, the possibility that you win a car if you then switch your choice is given by the following formula

P(Hz ^ Cy) + P(Hy ^ Cz)

= P(Cy)·P (Hz ¦ Cy) + P(Cz)·P(Hy ¦ Cz)

= (1/3 · 1) + (1/3 · 1) = 2/3

The second way you can work it out is by making a picture of all the possible outcomes like this

So if you change, 2 times out of 3 you get a car. And if you stick, you only get a car 1 time out of 3.

And this shows that intuition can sometimes get things wrong. And intuition is what people use in life to make decisions. But logic can help you work out the right answer.

It also shows that numbers are sometimes very complicated and not very straightforward at all. And that is why I like The Monty Hall Problem.

Source: Curious incident of the dog in the night time, a novel by Mark Haddin.

PS: I really enjoyed reading the book. The author is a chap called Mark Haddon who wrote children’s books and decided to get into the mind of one, but this time an Autistic child. It must have been a daunting & painstaking idea because from the efforts, one can easily make out that he eventually learnt precisely how to go about it. It must have been a really huge effort, because not only did he get into Christopher’s (15 year old autistic child) mind, he also created an engrossing whodunit. It's really funny to find the chapter numbers as 2, 3, 5, 7, 11.... yup, they were prime mumbers.

Bonus: Here are few interesting lines from the book...

1) "It was nice in the police cell. It was almost a perfect cube, 2 meters long by 2 meters wide by 2 meters high. It contained approximately 8 cubic meters of air.

I wondered how I would escape if I was in a story."

2) "I find people confusing. This is for two main reasons.

The first main reason is that people do a lot of talking without using any words. Siobhan says that if you raise one eyebrow it can mean lots of different things. It can mean "I want to do sex with you" and it can also mean "I think that what you just said was very stupid."

The second main reason is that people often talk using metaphors. For instance,

They had a skeleton in the cupboard.
We had a real pig of a day.

The word metaphor means carrying something from one place to another, and it comes from the Greek words µετα (which means from one place to another) and φερειυ (which means to carry), and it is when you describe something by using a word for something that it isn't. This means that the word metaphor is a metaphor.

I think it should be called a lie because a pig is not like a day and people do not have skeletons in their cupboards. "

3) This will not be a funny book. I cannot tell jokes because I do not understand them. Here is a joke, as an example. It is one of Father's.

"His face was drawn but the curtains were real. "

I know why this is meant to be funny. I asked. It is because drawn has three meanings, and they are (1) drawn with a pencil, (2) exhausted, and (3) pulled across a window, and meaning 1 refers to both the face and the curtains, meaning 2 refers only to the face, and meaning 3 refers only to the curtains.
If I try to say the joke to myself, making the word mean the three different things at the same time, it is like hearing three different pieces of music at the same time, which is uncomfortable and confusing and not nice like white noise. It is like three people trying to talk to you at the same time about different things.
And that is why there are no jokes in this book.

Hope, it is enough to make u read the 110 page novel.