Marc Levinson, an economist and former correspondent for The Economist, has written a historical look at the shipping container and its impact on the global economy. Backed by extensive research, ‘The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger’ tells the story of how the ‘father of containerization’ Malcom McLean’s innovation of containerized shipping was revolutionary to the shipping business. The container technology allowed massive savings in freight costs, inventory costs, and allowed supply chains to expand beyond their original limits. As these supply chains grew more and more reliable, the global economy was able to expand at a steady and swift pace. The two most distinct effects of containerization: Asia’s rise as a manufacturing power and influx of low costs goods to America. There would be no Wal-Mart without the shipping container.

“In telling the remarkable story of containerization, this book represents an attempt to fill a historical void. It treats containerization not as shipping news, but as a development that has sweeping consequences for workers and consumers all around the globe. Without it, the world would be a very different place.” The Box

Chapters have been broken down into subjects (such as “The Trucker,” and “The Battle for New York’s Port”) for quick reference. The one complaint with “The Box” are the sections where Marc goes into ‘industry detail’. It may seem a bit monotonous and maybe over the top for the average reader. You won’t lose the big picture though by skipping through these sections and reading ahead. Fans of The Economist will feel at home with Marc’s writing.

More Goodies:

• Video interview with Marc Levinson
• The Box Is King - MSNBC article on how the shipping container has revolutionized commerce
• Getting into the box - ChainLink Research, a supply chain research company interviews Marc

The basic premise of tax deferred retirement accounts such as traditional IRAs or 401Ks is that you are only required to pay taxes after you withdraw funds (typically at retirement). The longer you wait to start drawing on your retirement funds, the longer your money can grow due to the power of compounding.

In Retire Secure! the author outlines several strategies for deferring taxes on retirement accounts for as long as possible so that the retirement funds can grow tax deferred for as long as possible before being taxed by Uncle Sam – significantly reducing your tax bill.



Retire Secure! provides a wide range of details that will help you create an optimal retirement planning strategy. Topics covered include:

• New tax changes for 2006
• An overview of the major retirement account choices – 401Ks, IRAs, etc. as well as trade-off options such as Traditional IRAs vs. Roth IRAs
• Which retirement assets to spend first for maximum tax savings
• Relevant distribution rules and distribution options
• Estate Planning, including tips for stretching your IRA distributions across multiple generations in order to maximize tax savings
• Strategies for maximizing charitable donations

Pros:

• Provides a valuable source of tax saving strategies
• Provides good overview of retirement account options and trade-offs
• Mini case studies in each chapter provide excellent real-life examples

Cons: Relatively brief treatment of how to accumulate retirement savings. This book is intended for audiences that are close to retirement and can benefit from effective tax planning when starting to take retirement distributions.

Recommendation: A must-read for maximizing your retirement nest egg. Provides a valuable source of information for those nearing retirement age to effectively defer taxes on their retirement savings for as long as possible and benefit from significant tax savings.

Check out the Retire Secure! website for more information on the book.

Fortune named this book “One of the smartest books of all time..”. It also has received praise from Financial Times as previously being named one of the Best Business Books of the Year. Praise is one thing this book isn’t lacking and I don’t think any review would do this book justice. Flatly put, this book is a must read.



When you think of terms such as randomness, probability, and induction you may get shivers up your spine. Don’t worry, it’s not back pain. These shivers are caused by memories of dry, monotonous writing that usually fill the text books on these subjects. Nassim Taleb has managed to do the impossible and it’s in the form of a book called “Fooled by Randomness: The Hidden Role of Chance in Life and the Markets”. Nassim has written a thought provoking book on randomness and has accomplished this through text which reads like a novel. As he explains in the preface, his aim when writing this book was to ‘avoid discussing…anything that I have not distilled well enough to be able to write on the subject with only the slightest effort’. Nassim is a fascinating individual who has a vast amount of knowledge on the numerous subjects which intersect with randomness such as: finance (Does the successful track record of a trader or money manager predict future success?), communication theory (Noise vs. Signal - Reading the Wall Street Journal is futile), and social aspects (gambling, superstitions). Nassim is also the originator of the ‘black swan’ theory - our inability to take into account of ‘unforseeable events’. I can attest that after reading this you’ll have a different outlook on life’s outcomes.

Check out the following links for more on Nassim:

• “Blowing Up” an article by Malcolm Gladwell
• “What Do We Know - The Scandel of Prediction” (direct MP3 download link) - Podcast featuring Nassim

Two for the Money provides readers with a basic introduction to personal finance and investing. Two For The Money covers a wide range of personal finance topics, including: organizing your finances, budgeting, retirement accounts, investing basics, teaching your kids about personal finance, and caring for aging parents.



Pros:
Covers a wide range of topics in an easy to read, conversational writing style.
Includes some useful tips for reducing expenses.

Cons:
The large number of topics affects the level of detail that is provided for each topic.

Recommendation:
Recommended for readers looking for an introductory book about personal finance and investing.

“Rule #1″, by Phil Town is a great introduction to value investing for the beginning to intermediate investor who is interested in a do-it-yourself approach. Rule #1 is aimed at investors who would have the time (and interest) to research their own stocks. The author describes an approach that combines Peter Lynch’s “buy what you know” principle with Warren Buffett’s and Ben Graham’s value investing approach.



Rule #1 explains how to identify quality companies in industries/areas you are most familiar with to identify target companies to research in more detail. Once you have identified a target list of companies, the author provides a step-by-step approach for evaluating the company’s growth potential and calculating the fair value estimate for the stock. Once you have calculated a stock’s fair price, simply wait for the opportunity to buy it for 50-cents on the dollar, to provide a sufficient safety cushion.

The steps help readers identify the fair value estimate for a stock, and then you can determine if the current asking price (i.e. stock quote) is a good deal or a bad deal.

Pros: Good intro to value investing. Provides more detailed step-by-step explanation than some of the other value investing books out there.

Cons: The author discusses buying and selling stock when the institutional investors do so in order to minimize risk. However, this approach causes investors to incur brokerage commission fees, which can add up over time.

Recommendation: Overall, Rule #1 is a great read for the do-it-yourself investor and a good introduction to value investing.

If there is one activity Americans are notorious for, it is their consumption. By consumption, I’m referring to the activity of spending money that is earned in wages. The United States had a savings rate of negative 0.7% in January of this year. Negative! That means we as a country spent more than we made in earnings. It doesn’t look like the credit card industry is in trouble any time soon. While it can be argued how the savings rate figure is calculated (some say it doesn’t compensate for other areas of income – e.g. capital gains), it still is a fact that America has one of the lowest savings rates in the world, and it has continually been declining for the past 40 years.

America’s Savings Rate



(click to see full view)

Advertisements are constantly bombarding us with the message that we have voids in our lives. There is no need to worry because we have companies that are constantly producing products that fill these voids. How has our society fallen victim to this ploy? Why do we always have to keep up our spending? When is enough, enough?

What if you didn’t spend anything for one year?

What!?!? A whole year??




Yes, a whole year. That is exactly what Judith Levine did in 2004. With the exception of food and necessities, Judith and her Husband ceased all spending. She chronicled the roller coaster ride of ‘non-consuming’ in her book “Not Buying It: My Year Without Shopping”. We get an inside view of the trade-offs that are involved when deciding not to spend. This inside view enlightens us with some valuable lessons to ponder. One piece of advice that resonates with me is thinking twice about handing over your cash; be more mindful of your purchases. It seems like a simple and rather obvious principle, but very few of us observe this practice. By being mindful (although she was forced to not spend) Judith saved $8,000 in her year of non-spending. For Judith and her husband Paul, they experienced the first whole year without arguing about money, which is a cause for many failed marriages nowadays.

Although this book brings to light bigger issues (the growing gap between the poor and wealthy, exploitation of individuals in labor markets, real wages not growing for lower & middle class) which need their own discussion, “Not Buying It” shows that you can survive without the mass consumption our society promotes, and still be a patriotic citizen!

“So, what’s your number?”




Ask that at your next dinner party where no guest is younger than 40 and you’re liable to get a cold, skin piercing glare sent back your way. The ‘number’ I’m alluding to is the monetary figure that will allow you to happily retire and it has become a hush-hush topic to discuss. In today’s debt ridden society, many are fighting and clawing their way from the depths of red ink to achieve their ‘number’, while others achieve it easily as a Sunday stroll. But is the goal of retirement to achieve a specific ‘pie in the sky’ number? Ostensibly it appears that way, but the path to reaching retirement shouldn’t be solely focused on the finances. In “The Number: A Completely Different Way to Think About the Rest of Your Life” by Lee Eisenberg, he explores all aspects of the financial path to retirement. While future retirees heavily weigh their financial planning on a target figure, Lee Eisenberg dives into the seemingly less concerned areas of retirement life. How will you live your retirement years? Will you spend it making a difference in your community, or playing 18 holes of golf everyday? Take it from Mr. Eisenberg:

“What if the life we want, really want, requires less, not more, money? Ever think of that? Why not, then, figure out what we want, what’s truly meaningful to use, and then do a financial plan to light the way?”

While “The Number” won’t help you figure out your “number”, it will open your eyes to aspects of retirement you never think of. Too much stress is placed on achieving figures and numbers and not enough of achieving life meaning. This book would be helpful to any 18 year old starting the rest of their life all the way up to those reaching the end of their working life.

Check out Lee Eisenberg’s blog at the book website.

Balance Sheet, revenue growth, accounts payable, depreciation….

The mere site of these words can send some into hiding. The truth is that financial intelligence is a vital skill in the business world. Even if you aren’t a ‘number cruncher’, understanding the concepts behind the balance sheet, income statement, and the cash flow will aide you in your career.



In Financial Intelligence: A Managers Guide to Knowing What the Numbers Really Mean by Karen Berman and Joe Knight, you are presented an easy to read ‘guide’ to get you feeling comfortable with financial concepts. The authors take the explanations a step further and break down the concepts, providing examples where the numbers come from and some key areas where accounting assumptions and bias may reside.

Karen and Joe own the Business Literacy Institute, a company which coaches and educates employees “to think and act in the best financial interest of your organization”.

After reading this book you will be able to pick up a balance sheet and understand the various subcategories of assets and liabilities, and why they always equal owner’s equity. That esoteric equation: Assets – Liabilities = Owners Equity will finally make sense!

Although this books audience leans towards managers, I found that this book would also be useful to the everyday stock investor who wants to understand the fundamentals of financial concepts. When researching companies to invest in, it’s imperative that you can read and understand all the financial statements to determine whether the company is a worthy investment. This book can be your learning guide if you want to improve those skills; a skill which the average investor lacks.

Check out an excerpt at Harvard Business School Working Knowledge.

Welcome back! Hope everyone had a nice holiday. Today’s book feature is Naked Economics: Undressing the Dismal Science by Charles Wheelan. Many of us in the business world may think we understand economics and how they affect us on macro and micro levels, but may not have the solid grasp. Don’t go back to your old economics textbook!

Mr. Wheelan has produced a excellent little book that touches on every subject from incentives and why they are important, to goverments and their importance in free market economies.

Charles is a former writer for The Economist, a feature writer for Yahoo! Finance and a frequent guest on the Motley Fool Radio Show. This book is a must read to brush up on your basic economics knowledge.

Discuss Naked Economics in our forum under Economics: General