Author(s): Daniel Crosby
Report Published: 16th August 2016
QUAKE Books Bonus: Exclusive Author Interview
Quake Magnitude: 8.0
According to Crosby, in order to really get a handle on your finances you must first get a grip on your actions, prejudices and tendencies. His book won’t mean you win the game but it will help you step-up your game, should you want to stand head and shoulders above the Wall Street crowd.
Upon browsing this book at a library or local bookstore, most casual readers would hope and expect to read The Laws of Wealth as a sure fire way of making money via better accountants, stockbrokers and banking options. Few would anticipate, and fewer still would like, to acknowledge their human fragility and biases, as a means of optimising their bank balance. Consequently, this book is nowhere near a get rich quick scheme. Actually, the author spends half the book telling you why suckers fall for the “get rich quick” mantra every time and how if you lack discipline and don’t pay good attention to your own personal weaknesses you will also suck pretty quickly.
Whilst this book has various merits, the main one being how hard it shook my financial behaviour and goals, I do have two gripes with it. The first is its dogged focus on the stock market, as a means to make money and grow wealth, when The Laws of Wealth could be equally applied to other forms of capital accumulation such as real estate, which has enjoyed good returns even in an economic downturn, and speaks to a whole bunch of other potential readers who would benefit from Crosby’s advice. My second issue is the overuse of quotes from Nassim Nicholas Taleb and Nate Silver which makes Crosby look too much like one of their disciples and not a thought leader in his own right.
So why read this book? I would say it is for every QUAKE Books Agent who wants to learn about how to invest wisely through careful behavioural calibration and weighted dice rolling in a game fraught with a great many snakes and not enough ladders. The theory is simple but not easy, practical but not pleasant, and grounded in both academic research and advice from some of the world’s most renowned investors, including Warren Buffet – what’s not to like?
“If a consistent, detailed look at potential pitfalls is not currently a part of your investment discipline you are overlooking the surest path to winning – namely, not losing.”
“The fact that people are fallible is your biggest enduring advantage in the accumulation of greater wealth. The fact that you are just as fallible is the biggest impediment to the same goal.”
“The best investors ignore the broader market and focus on getting the returns that they need to live the life they want.”
The ground shook violently with just the first few pages, which was all the time Crosby needed to show me that my way of saving for my retirement, simply by not spending, was not a sound strategy at all. I know – violins please 🙁 .
That bookquake was so strong it moved me off the comfort of my sofa in my rented apartment and threw me into the bank, estate agents and onto apartments in Lisbon, in an attempt to stop squandering euros on the black hole, which is long term renting when you are sitting on cash reserves. Now it is a case of constantly checking and playing myself well enough to increase the likelihood of winning at my own game.
Well if everything goes well, this book will save me 7000 euros a year and earn me a piece of property to call my own. Apart from that The Laws of a Wealth is an excellent illustration to all as to why we at QUAKE Books HQ are different. We don’t just read and register bookquakes… we live them!