CEO Salaries

There's been a lot in the news lately about CEO pay packages and how they relate to company performance. The numbers are always mind-blowing, almost inconceivably large. How have we gotten to a point where these salaries are so stratospheric? Anyone who rises to that level in a company must have something going for them in terms of brains, personality, management skills-- at least I'd hope so-- but are they really THAT much more valuable than other workers? Sometimes, obviously, they aren't: the CEOs of companies that have crashed and burned can't possibly be doing their jobs right, yet even when they are fired for it, they walk away with severance packages worth more than most of us could ever earn in many lifetimes.
Why aren't more shareholders up in arms about this issue? How are some of these CEOs themselves not embarrassed by their pay?
I guess the world of corporate boards and compensation consultants is a pretty small circle-- they all think they deserve it themselves, so they vote for it for each other. I came across this chart while looking up a book I'm interested in reading, called Superclass. This chart of connections might strike some people as conspiracy paranoia, but to me, it's just not all that surprising that very rich and powerful people all have connections to each other, and that they would all do whatever they think makes their friends happy, whether that is donating to a favorite charity, or weighing in on how much someone deserves a huge pay package.

Today Only: Free E-Book of Go Green, Live Rich

Here's an email I got 5 minutes ago. It's not as nice as the free Suze Orman book offer, because you can't just download a PDF-- you have to have a Kindle or Sony e-book reader. But if you do and you're interested, enjoy:

Get Your FREE Download of my
Brand New Bestseller Go Green, Live Rich
Today Only!

Dear Friends and FinishRich Community Members,

I'm absolutely thrilled to announce that my newest book, Go Green, Live Rich is an instant bestseller, debuting on both the New York Times and Wall Street Journal Bestseller lists! This is huge news because as far as we know, this is the first time a book on the environment ever opened on the NY Times bestseller list. So thank you so much for helping to make this happen!

I also want to invite you to help us celebrate Earth Day with a very special offer. We've teamed up with our friends at Amazon.com and Sony, to offer a FREE download of Go Green, Live Rich: 50 Simple Ways to Save the Earth (and Get Rich Trying). That's right! For today only you can download the book absolutely free.

Here's all you need to do to get your free download. If you're an Amazon Kindle user, head over to Amazon.com or search Go Green, Live Rich directly from your Kindle and start your download from there.

To download the book to your Sony e-book reader, visit Sony's e-Book Store. You can also download directly to your computer by using Sony's free download client. Click here for further details.

Remember, this offer is good for today only! And please feel free to share it with family and friends!

Six-Word Financial Biographies

Have you heard about the book Not Quite What I Was Planning? It's a collection of six-word memoirs, such as "After Harvard, had baby with crackhead," "Nobody cared, then they did. Why?" and "Found true love, married someone else." Not surprisingly, the book has been getting a lot of attention. (I loved the piece in the New Yorker about the book party, which was written entirely in 6-word sentences/phrases.) It reminded me of the personal finance haiku contest, and got me thinking about 6-word financial stories:

Earning money was never my forte.

Bought high, sold low, smacked forehead.

We budgeted, saved, and retired early!

Expensive toys were my only weakness.

Haven't slept since I discovered Quicken.

I couldn't stop thinking about money.

What would yours be?

Free Download of Suze Orman's Women & Money

Via a publishing industry newsletter, I just heard that Oprah is offering a free download of Suze Orman's book Women & Money, but only until 8pm EST tomorrow. You can find the download link on this page (scroll about halfway down and you'll see links for English and Spanish versions).
This is the first time Oprah has ever offered a free book via a PDF download. It's noted that the book is copyrighted, and that you can download it only for your own use and may not forward or copy the file.
Will this end up making more people buy the book? I guess that is the big debate in publishing these days-- how much do you give away for free, and does it help or hurt sales? In any case, if you have been curious about this book but havent wanted to pony up the bucks, nows your big chance to read it!

[On an unrelated note, what is suddenly wrong with my computer! I cant type, or even cut and paste apostrophes! If I try to type one it brings up a "quick find" box at the bottom of my screen! Make it go away!]

A Pricing Analysis of Amazon's Kindle E-Book Reader

The latest publishing buzz is Amazon's introduction of the Kindle, a new e-book reader. At $399, it's a bit pricey: Sony's e-book reader is $100 less. And there are many e-books that can be read on PDAs-- even if you're dealing with text-only on a much smaller screen, you don't necessarily need a separate device. But the Kindle offers some pretty cool features, and the books and newspapers that are available to be read on it are discounted quite a bit compared to their print versions. Can the Kindle end up paying for itself?

I actually had a chance to play with one of these a few months ago. I thought the size and weight were ok, and the experience of using it was pretty impressive-- not perfect, but better than any other portable electronic reading device. I liked the fact that it was a stand-alone wireless product: if you're traveling or at the beach and you decide you want to read something, you can go online and download it without having to go back to your computer, and without having to subscribe to any sort of wireless plan or be at a hotspot since it's on a cell phone network. All in all, I was intrigued by what the device could do, but as a dedicated PDA user, I didn't see myself buying another electronic device to tote around. (Also, a large percentage of my reading is done in manuscript form before the book is actually published, and though I could probably do some of that electronically, I'm not necessarily the ideal user for this product.)

But when I tried the Kindle, I didn't even think about the costs that might be involved. A lot of early comments have focused on the fairly high price of the device-- is it worth the money?

Books: NY Times Bestsellers and New Releases are $9.99 on the Kindle. For hardcovers that are $25 and up (the new Ken Follett hardcover is actually $35, which seems like a shocking price for fiction, even if it is over 1000 pages!), you're saving at least $15 per book. If you buy 26 hardcover books, the savings offset the price of the Kindle.

Newspapers: the NY Times is $13.99 a month. I pay $40.80 a month for delivery of the print edition. 15 months of subscribing saves you enough to pay for the Kindle.

Magazines: The Atlantic is $1.99 a month on the Kindle. Amazon offers subscriptions to the print edition at $24.95 a year, or $2.08 a month. The cover price on a newsstand is $4.95. No big savings for subscribers, but if you'd been buying individual copies, your savings would pay for your Kindle in, oh, about 11 years.

Blogs: $0.99-$1.99 a month each. Well that's not much of a deal, is it? Blogs are usually free, so here's one area where the Kindle doesn't exactly win. But compared to the cost of having a wireless Internet plan that allows you to go online and read blogs anywhere on a laptop or handheld, it might be a good deal, at least if you only read a few blogs. Their current selection is not all that great. None of the personal finance blogs that I read are included. From a quick search, the only blog I read that's on there is Apartment Therapy, which is one of the $1.99 ones. Until My Open Wallet is available in Kindle format, obviously this feature of the device is useless.

Bottom line: if you are someone who reads a lot and likes to read current bestselling hardcovers when they first come out, the Kindle could save you quite a bit of money. It's also probably lighter and smaller than that doorstop by Ken Follett, so you might avoid some chiropractor bills too. And aside from anything else, it's a nifty new electronic toy that I'm sure will end up under the Christmas trees of many people whose loved ones wonder what you get for the person that has everything... What do you think? Would you buy one?

Ok, I have to mention Harry Potter.

From a publishing industry newsletter called Shelf Awareness:

Scholastic estimated that 8.3 million copies of the 12 million first printing of Harry Potter and the Deathly Hallows sold in the U.S. on Saturday. By contrast, in 2005, some 6.9 million copies of Harry Potter and the Half-Blood Prince sold on the first day.

The New York Times estimated that if the average price per book was $20, "Americans spent nearly $170 million for the book in one day." The AP (via the Seattle Times) calculated that sales of the book averaged more than 300,000 copies per hour or more than 5,000 a minute.

$170 million spent in one day on one book. Wow. I would love to know if anyone will try to estimate other financial effects that Harry Potter might have had on our world. While out and about in NYC this weekend, I kept seeing people reading the book, and wondered if retail sales were down on Sunday because people were holed up trying to finish the 700-page tome. And how much did sales increase on Saturday from the hordes of people there to buy the book? Most booksellers are not making much of a profit on Deathly Hallows itself, as they have to discount it so heavily. Stores were hoping that the extra foot traffic would lead to higher sales on other books-- I only have anecdotal information, but I've heard that certain titles that my company had in promotional displays over the weekend were "wiped out."

Also, how much overtime did the UPS and FedEx workers get? How many people called in sick to work today because they wanted to stay home and read the book, and how much productivity is lost because of that? How much higher were the electricity bills of people who stayed up all night reading? And then there are the endless speculations one could make about J.K. Rowling's net worth, investments, spending, etc.

By any estimate, that's a lot of muggle money.

Lessons Learned from Diet Books: How to Think Like a Rich Person

For a long time now, I've been wanting to write about the similarities between managing one's money and managing one's waistline. The kind of self-discipline involved in saving money and reducing debt is very much paralleled by what it takes to lose weight and eat healthily. I'm certainly not the first blogger to notice this (see Sitting Pretty, Frugal for Life, Kate Spills the Beans, and this great chart showing how American house sizes correlate to obesity rates!)

With that in mind, I started to wonder about how weight loss and finance compare in the book publishing world. At any given time, there always seem to be at least a couple of diet and personal finance books on the bestseller list. So do they offer similar advice? Or can the lessons in one type of book be applied to the other?

A couple of weeks ago, I attended the BookExpo convention in New York. I didn't have a chance to take photos of all the upcoming finance books as I did last year, but one day I noticed that signed copies were being given away of a recent diet book that has gotten a lot of attention, so I snagged one.
The Beck Diet Solution claims to "train your brain to think like a thin person," using techniques based on cognitive therapy. Might there be some analogy to training one's brain to think like a rich person, or at least a debt-free person? Of course there is no universal way that rich or debt-free people think, and many debt-free people wouldn't be considered rich by the usual definition. For the purposes of this post, I'm defining rich people as people who are financially secure, i.e. free of credit card debt, living within their means, on track to be able to retire comfortably-- these aren't insignificant things, and should at least make you feel rich if you've accomplished them!

In The Beck Diet Solution, Chapter 3 is titled "How Thin People Think." The author lists 8 characteristics that make it difficult for many people to diet, and claims that thin people don't have these characteristics. They make a lot of sense, I think, and can easily be translated into traits that might be common among people who find it hard to save money:

#1: You Confuse Hunger with the Desire to Eat
Translates to: You confuse need with want.
You need to learn to differentiate between what is really a necessity, and what is not, and practice depriving yourself a bit so you can experience what true need is really like.

#2: You Have a Low Tolerance for Hunger and Cravings
Translates to: You have a hard time not acting on your desire to buy things.
You need to learn that desires don't have to be acted on right away, and that if you don't buy something you want at that moment, you won't necessarily be haunted by it for the rest of your life.

#3: You Like the Feeling of Being Full
Translates to: You like being surrounded by possessions that make you feel prosperous, or spending money makes you feel prosperous.
Just as there is a difference between eating until you are full, and over-eating to the point where you feel stuffed, you need to recognize the difference between enjoying some of the rewards your money can buy, and over-doing it. You have to train yourself to appreciate what you can reasonably spend, and not feel deprived because you can't spend more.

#4: You Fool Yourself About How Much You Eat
Translates to: You fool yourself about how much you spend.
If you know how much you spend, it's easier to control. You might overspend a little one day, and then know you should compensate by cutting back on another day.

#5: You Comfort Yourself With Food
Translates to: You comfort yourself by spending money.
If emotional distress makes you want to run out and go shopping, you need to learn other ways of comforting and distracting yourself, and try to solve the problems that are upsetting you.

#6: You Feel Helpless and Hopeless When You Gain Weight
Translates to: You feel helpless and hopeless when you get into debt.
You need to learn to have faith in your own decisions and ability to act on them. If you overspend and get into debt, make a plan about how to solve your problem, and stick to it, rather than feeling like you're a failure and demoralizing yourself.

#7: You Focus on Issues of Unfairness
Translation: none needed.
Yes, some people are genetically thin, and some people are born rich. That said, just as many people look effortlessly thin but actually work quite hard to stay that way, many rich people did not have their wealth handed to them on a silver platter, and worked very hard to get it. In any case, how other people got their money isn't really something you should be worrying about when you're trying to get your own financial house in order.
Of course, unlike your weight, your finances may be affected by government policies you feel are unfair-- if you want to change them, get involved and take action to do so, but in the meantime, you're stuck in the world you live in and ultimately, you and only you are responsible for how you spend your money. You have to accept the fact that getting rich isn't going to be easy for you.

#8: You Stop Dieting Once You Lose Weight
Translation: You stop watching your spending once you get out of debt, or reach a certain savings goal.
If you've really buckled down and reached a financial goal, that's great, but you should look at your financial habits in terms of long term goals, not just immediate ones. You have to change your attitude towards money for life, or you'll find yourself in trouble again in the future.

So, a thin person knows why they are eating, knows how much they are eating, is willing to feel hungry, doesn't use food as a distraction, doesn't think gaining a few pounds is an irreversible catastrophe, accepts that staying thin takes some work, and sticks with this attitude for life. A rich person knows how much they are spending, whether it's truly important, knows they will sometimes have to say "I can't afford it," feels satisfied with moderate possessions, doesn't shop as a distraction, doesn't stress out if they go a little over budget now and then, doesn't resent other people's money, and sticks with this attitude for life. That all sounds pretty good to me! Maybe author Dr. Judith Beck should write "The Beck Budget Solution!"

I'm looking forward to trying this with some other diet books, though I'm not sure all of them will prove as useful: French Women Don't Get Poor? The South Beach Savings Plan? YOU: On a Budget? We shall see!

How Much is Good Content Worth?

How do you feel about paying for content, i.e. music, video, and especially the written word? There are a lot of people out there who want to know your answer to this question. I work in publishing, and I write this blog, so I see two sides of this issue.
My whole livelihood depends on the fact that in book publishing, there has traditionally been an expectation that the available content has to be chosen, edited, printed, marketed, and distributed. When you buy a book, you expect that what you read inside it will meet at least some minimum level of grammar, spelling, readability (in the sense that words are used well and you can understand what the author is talking about), legibility (in the design and quality of the printing), and for want of a better term, interestingness, meaning it's a good story, or gives good information about a topic. Most people probably don't think about it explicitly, but you probably assume that books that look a certain way and come from a publishing house will meet these minimum standards, whereas if you know that some person just wrote a book and had it printed up themselves, you might wonder if it's any good.
At least that is how it used to be. With books, it's been somewhat difficult, or at least expensive for just any old person to create, market and distribute a book without the support of a publisher. That is changing due to new technology that makes it much easier and cheaper to do small print runs of books that look halfway decent, and there are always a few success stories about someone who self-published a really successful book and sold thousands of copies out of the trunk of their car. But when you hear those stories, it tends to be because a major publisher heard about it, bought the rights, and is now publishing a new version of the book and marketing it in the traditional ways. I don't know any stats about the number of readers who have ever bought a self-published book but I'll bet it is incredibly small.

The more content goes digital, the more this changes. An enormous number of people want to, and do create content. Now that we have blogs and websites, we can easily share our creative work with the world at large. There are no publishers acting as gatekeepers to tell the end user which content is worth reading. There are no marketers or publicists raising the profile of certain authors. There is no art department designing how the pages look. So there are millions of pages of writing out there that may or may not be worth reading, and they probably look awful, and hardly anyone has heard about them. And no one is making any money off them, probably, which isn't a big surprise.

But then you have many other thousands or millions of pages of writing that are halfway decent, they get a little attention, and maybe are making a little money from advertising. For most, it's probably just pocket change, but some bloggers are actually able to make a living at it. So do people even need publishers any more? Can people make more money by writing and promoting their own blogs?
Barbara Ehrenreich recently wrote a blog post called "Before You Write That Book," in which she tries to discourage people who might want to write a book, saying that it's difficult to get published and you probably won't make much money anyway. And that is true. But especially for people who have been blogging already, it can become very tempting.

Take this blog, for example. I've featured a few ads here and there for most of the time I've been writing it, but I've never wanted them to visually overwhelm the site. The result is that I have made a few dollars but the lifetime amount is only in the low 3 figures (which I have been keeping track of and periodically donating to charities). But what if this blog was a book? My site has been mentioned in several national publications (Business Week, New York Times, Marie Claire, The Week magazine, Bitch magazine) and on msn.com, as well as in a couple of local and international newspapers or magazines, which is more than can be said for a lot of first time book authors. And I've had a couple hundred thousand unique visitors as a result, which I still find pretty mind-boggling! What if instead of reading my blog, those people had bought "My Open Wallet: The Book," as a $10 paperback? Assuming a 10% author royalty, I'd have made $200,000 instead of $200! Of course not every unique visitor to a blog would necessarily be a book buyer, but they don't necessarily click ads either, and you can see that the scale of revenue is just totally different.

Maybe some readers would be willing to pay me $1 to read this blog. That is the exchange people have traditionally made when it comes to the written word: someone entertains or informs you in exchange for payment. And some authors probably see blogging as a dangerous precedent of writers giving away their labor for free. But now that written words are becoming more like broadcast media, it's hard to get people to pony up! So book and magazine publishers are going a little nuts trying to figure out how they're going to make money in the future-- ad revenue online is only a tiny fraction of what it is for print. And actual consumer payment for content online is almost non-existent. And a lot of people in publishing are having a hard time adjusting to this. I was just in a meeting where a sales rep referred to a bookseller who had only just now gotten access to the internet for the first time and asked "Ok, I'm on the World Wide Web, now where do I go?" And someone else, when told about publishers offering widgets for searching book content, asked "Is that a cookie?" Meanwhile, I'm hoping to get involved with a committee on digital initiatives, as I have some experience with the blogging world now, and some ideas on how book publishing can evolve. I also have a very vested interest in its doing so, as I'd like to have a job for the next 30 years. But at least if I did get laid off, I'd have more time to work on this blog... and maybe I'd figure out how to turn it into a money-making machine!

Not Your Usual Personal Finance Books

I have been working like crazy lately trying to finish some big projects, and I rarely seem to leave the office before 7 or 8 pm. And last night I was particularly annoyed about it as I had to miss a reading by William T. Vollman, from his new book Poor People.
I have never read anything by Vollman-- frankly, from what I'd heard about his novels, they sounded a bit heavy for me. But this new book is non-fiction: Vollman traveled around America and the world, asking people the question "why are you poor?" The starred review in Booklist calls it

...a bracing mix of risky oral history, passionate social observation, and bold interpretation that illuminates not only the obvious deprivations suffered by poor people but also the impoverishment of their inner lives.

I'm interested to read this, just because of the way he posed the question so directly. That in itself seems like an unusual approach-- people study poverty and wealth and do surveys which lead them to conclusions about how people get to where they are, but it seems very rare to ask people "why are you poor," or for that matter "why are you rich?" I wish I'd been able to go to the reading and hear what he had to say about the book, and what kind of questions people asked him.

Another book I've been meaning to write about is Memorial, by Bruce Wagner. I read this a couple of months ago-- it's a great book, and money issues are very much woven into the plot. I like Wagner's novels-- he's very name-droppy and harsh, but the satire is dead-on. From a review by Kurt Anderson in Publisher's Weekly:

The main characters are the members of an ordinary middle-class family—Joan, her feckless older brother, their sweet mother and sweet runaway father. Three of the four are spectacularly victimized, but every one is also the recipient of a financial windfall, and achieves redemption—which amounts either to slightly overdetermined coincidence, or karma.

So if you are tired of reading the typical personal finance how-to books and want something that makes you think about money matters a bit differently, these might be two books worth trying.

What I Did on my Vacation (from blogging)

My four days without posting were not a vacation in any other way, I can assure you. For publishing people such as myself, there is an annual ritual that takes place on a weekend towards the end of May. You have lots of meetings, punish your back and feet by standing all day, get your photo taken with Dora the Explorer or the Topaz Man, smile til your face hurts, say "wow, Dr. Ruth is here again," and go all kissy-poo with everyone you've ever worked with in the industry: this is the extravaganza known as BookExpo America.


If the aisles look a little empty in the photo above, it's because I didn't have time to take pictures until the very end when most people had already bailed!
I think trade shows are quite weird, really. They seem to have insinuated themselves into every industry as a necessary way of doing business, even though 90% of the business that is done is probably between people who already know each other and don't really need a blue-and-white-curtained, concrete-floored venue in which to duplicate conversations they've probably already had on the phone or in each other's offices. And it's expensive: The tiniest publisher who takes a basic 10' x 10' booth with a table, a chair and a piece of carpet pays almost $4000 for that space and furniture alone. Bigger publishers who have custom booths have costs for the space, shipping, carpentry and services that easily come to $30,000 or more per year, and that doesn't even count all the t-shirts, tote-bags, buttons, candy, pens, hats, giant foam fingers, and oh yeah, sample books that they give away. And then there are the expenses of all the people who attend-- I haven't added all mine up yet, but I think it will be around $1200 even though other people paid for most of my cab rides and meals.
Anyway, the reason publishers spend all this money is to introduce new books that are being published, so of course I put my Madame X hat on for a while and went hunting for things that might interest my readers! Here's a few that you might want to look for in the coming months:

How about Flipping Houses for Dummies? I like how it's right between "Sex" and "Personal Finance."


This "1000 Best" series offers some bargain-hunting topics, as well as careers and real estate. Though it's hard to tell from the photo, once again the money-related books were right above a whole shelf of sex books.


The Home Buyer's Checklist book could have been handy for me these last few months...


The Little Book of Value Investing probably won't do as well as The Little Book that Beats the Market, but something tells me we'll see a lot more "Little Book" spinoffs in the pipeline. And Seven Years to Seven Figures... catchy title, could work.


Speaking of catchy titles, how about 202 Ways to Make Big Bucks and Stop Mooching off Your Parents! The perfect graduation gift!


Here's one that I think the world could live without:


Chicken Soup for the Shopper's Soul?!? What will it be next, Chicken Soup for the Real Estate Speculator's Soul? Chicken Soup for the Adjustable Rate Mortgage-holder's Soul? Chicken Soup for the Check-Bouncer's Soul?
Nothing would really surprise me any more. Every time I go to this trade show, I am convinced that for every stupid, weird or arcane topic, there are already at least a dozen books about it, plus a dozen more that someone is really excited about publishing this fall. And all this is in addition to the thousands of new books being published about topics that are actually popular-- the photos above barely scratch the surface of all the personal finance-related books I saw. Every year, I find this show more and more exhausting-- not just because I'm getting too old to drink and party and still be able to say "this is a great book" all day, but because there's just too much to see and absorb and it's hard to find the books that are actually worth getting excited about.

But there are a few things that are new and different each year. This year's BookExpo was held in Washington, DC, after many years of rotating mostly between Chicago, New York and Los Angeles. It was actually a nice place to have it, as the convention center is located quite close to downtown restaurants, the train station and Reagan Airport, as well as several hotels. And the convention center also came with a special bonus that only my female readers will truly appreciate:


Yes, the bathrooms offered "complimentary feminine products," as one of my colleagues very delicately put it, rather than the machines that make you pay 25 cents each. The bowls were always well stocked, so I guess everyone was so impressed by this generosity that they returned the goodwill by not stealing whole handfuls.

Well, that's it for my report from the book world... I'm glad to be back home!

An Unusual Book about Investing

Most personal finance books tend to be published in the first quarter, to tie in with all the New Year's Resolution and Tax Prep displays in stores. But there are still a few stragglers hitting the market at other times of year, such as this one:
More Than You Know: Finding Financial Wisdom in Unconventional Places by Michael Mauboussin was recently previewed in Publishers Weekly-- it kind of sounds like a Freakonomics about the stock market. The author is a Wall Street equity analyst, and the book is a collection of reports applying scientific findings from various fields to investing. Some topics include animal behavior ("Guppy Love: The Role of Imitation in Markets"), psychology ("Why Zebras Don't Get Ulcers"), and philosophy of science ("The Janitor's Dream: Why Listening to Individuals Can be Hazardous to Your Wealth"). PW says:

Each essay describes a fascinating scientific finding, then develops and applies it to personal investing. "Survival of the Fittest," for example, begins by discussing how Tiger Woods improved his golf swing, introduces the concept of fitness landscapes from evolutionary biology, then explains why investors in commodity-producing companies should like strong centralized management, while technology-stock buyers should prefer flexible organizations with lots of disruptive new ideas.

PW's bottom line was that the book is well-written and entertaining enough for a general readership as opposed to just serious investors, but that some of the material is out of date. I may have to check this out when it's published in June.

Book Review: Bait & Switch

Here I am again with another timely review of a hot new book... that came out months ago, was read months ago, and isn't on the bestseller list any more. But as we like to say in the publishing industry, every book is new to someone who hasn't read it yet.

Barbara Ehrenreich's Nickel and Dimed was a huge bestseller, with good reason. I personally had a few problems with the author's "poor for a month" roleplaying, but the resulting book did paint a pretty devastating picture of what it's like to try to survive on low-wage work. (For a perspective that is less focused on an upper-middle class author trying to do this, and more on the people who really live this life, I recommend The Working Poor by David Shipler, as did NYCMoney a few months ago).
In Bait & Switch, Ehrenreich again goes undercover, this time with the aim of penetrating the corporate world. Since she never actually gets a job in the corporate world, the book is actually a portrait of "the shadowy world of the white-collar unemployed." Before I read the book, I had some doubts about it. From the description and some advance reviews, I thought, "OK, just because Barbara Ehrenreich can't fake her way into a corporate job, it doesn't automatically mean that the middle class is being used and abused by evil corporations." That isn't quite her point. She does show that even people who technically do everything right-- market themselves, network, undergo image makeovers and life coaching, etc.-- still sometimes can't get jobs, and that the upward mobility and job security the middle class see as their birthright are under assault. But here as in Nickel & Dimed, though the author's willingness to use herself as a guinea pig makes the story more dramatic and intimate than it might otherwise be, it can also be a liability.
Ehrenreich decides that she will try to get a white collar job that pays at least $50,000 a year. She puts together a resume and references which support her claim to have experience in freelance event planning and public relations. She doesn't say exactly what was on the resume and is a little vague about the level of flat-out lying she did. But she tells the reader that she has no experience in the corporate world, her entire working life having been spent in journalism, academia, and activism. She admits that she has disadvantages as a prospective employee, given that she is a middle-aged woman who will be claiming to be returning to the workforce after a long absence to raise children. But she seems quite confident that her background, experience, and being "a quick study" will make her a credible candidate for a job as a PR director at a corporation.
I personally have done some hiring and firing in my time, and you know what? If someone like Barbara Ehrenreich (or rather, "Barbara Alexander") applied for a job with me, I'm not sure she'd get it. Maybe there would be something about the resume that didn't ring true, maybe I wouldn't be sure that she could really do the job, but even if I thought she could, there might just be others who could do it better, and for whom I wouldn't have to make a leap of faith to hire them. When you're hiring for a $50,000 a year kind of job, chances are you can find someone who has some direct experience that will lead them into that position, if not even someone whose last job was the exact rung below it on the ladder. At one point, Ehrenreich even goes out on limb saying she wants a salary of $100,000 to get into a seminar for "executives in transition" (though it turns out the seminar is for people at least at the $200,000 level). This to me was a sign of her being a bit naive in her expectations, and I'm sure she came across that way to others as well.
But if you can get past all that, the book does brilliantly skewer the whole industry that has grown up around middle-class job seekers. She hires a couple of coaches who are ridiculously unqualified to be telling anyone how to do much of anything. One of them, a man named Patrick, is practically speechless and shattered by the time Ehrenreich is through with him, having turned the tables by suggesting he hire her to do his PR after she sees how pathetic his motivational videos are. Ehrenreich's sharp wit is apparent throughout, exposing the absurdity of resume experts, job fairs and networking sessions at Fuddrucker's. I especially enjoyed the conclusion of one scene at a corporate networking event that turns out to be more about religious recruitment:
"I entered the Norcross Fellowship Lunch as an atheist, but now... I discover I am a believer, and what I believe is this: if the Lord exists, if... some great spinner of galaxies, hurler of meteors, creator and extinguisher of species... should manifest itself, you do not "network" with it any more than you would light a cigarette on the burning bush."
As the jacket claims, Bait & Switch is "alternately hilarious and tragic." It's an enjoyable read and certainly a cautionary tale for anyone who's looking for a job.

The Personal Finance Bestseller list

Yesterday I referred to the fact that the finance books you see on bestseller lists (such as the New York Times') might not actually be the ones that are selling the most copies. Here is a list I compiled of the personal finance books that actually sold the best in retail outlets last week (ending 1/15/06), according to Bookscan. (Even Bookscan isn't 100% accurate, but it gives you a pretty good idea.)
I took their overall Business bestseller list and edited out the titles on leadership, CEO biographies, and general economic books such as Freakonomics (which would have been #1 by a long shot.) I also removed one book called "Investing Money Market Funds" because it's no longer available according to Amazon, and was probably only on the list because of some kind of special remainder sale. I haven't sorted by hardcover vs. paperback, and I certainly can't be bothered to tell you where it ranked last week, how many weeks it's been on the bestseller list, etc., not on a Friday night.

So here it is:
#1: Jim Cramer's Real Money
#2: The Number
#3: The Little Book That Beats the Market
#4: Rich Dad, Poor Dad
#5: JK Lasser's Your Income Tax 2006
#6: The Total Money Makeover
#7: The Automatic Millionaire
#8: Secrets of the Millionaire Mind
#9: The Ernst & Young Tax Guide 2006
#10: The Five Lessons a Millionaire Taught Me
#11: Smart & Simple Financial Strategies for Busy People
#12: The Money Book for the Young, Fabulous & Broke
#13: The Total Money Makeover Workbook
#14: The Richest Man in Babylon
#15: Rich Dad's Cashflow Quadrant

P.S. Loral Langemeier is nipping at their heels, with The Millionaire Maker only a couple hundred copies a week below Cashflow Quadrant!

No big surprises there, I guess! But I thought it would be a fun thing to look at. Also, I can't seem to blog about my own life much this week-- I've been so busy at work all I can think about is books!
Have a good weekend everyone.

A new bestseller!

To all of you who have been blogging about The Number, by Lee Eisenberg, your efforts have helped create a new bestseller. Saying exactly what bestseller list it's going to hit and when could get me in trouble, so I won't spill the beans in any more detail. But I do want to follow up on this with another post soon. I noticed that some finance books appear on the bestseller list you may see in a well-known newspaper, while others that may actually be selling more copies don't appear on the printed list, only in an online version. This kind of thing drives publishers crazy!

This may be the first bestseller personal finance book for which blogging has been a big part of the marketing campaign. I could be wrong about that, but it seems like the other books that have been on the lists lately are either things that have been around since way before blogging became so popular, or else they haven't been marketed by targeting personal finance blogs as reviewers. Am I wrong here? I haven't been blogging for all that long, so I may have missed something.

Personal Finance Books: What's the Next Big Thing?

Since I work in publishing, part of my interest in personal finance books is from the other side of the fence. I wonder what makes a particular book stand out from the crowd, what the next big bestseller will be, and how it was marketed. People like Suze Orman and Robert Kiyosaki have been around for a while now-- will someone else come along and capture the interest of the book-reading public in the way they have? And how will the publisher make it happen?

Publisher's Weekly recently did a feature on finance books, with an article titled "Who's the Next Biz Guru?" The article talks about how in the past, publishers have looked for authors who already have a platform-- they're affiliated with a newspaper, magazine or TV show, or are active on the lecture circuit. But as one editor says, that doesn't necessarily guarantee a book will succeed. Too many books have said all the same things, about cutting expenses, paying yourself first, maximizing 401k savings, etc. What made some of the current bestsellers stand out is that they actually "promoted ideas that were out of the ordinary, even contrarian," such as the Rich Dad, Poor Dad series.

Another interesting point made by the PW article is about the promotional venues for finance books: "...television coverage of the topic is limited. There's no equivalent of the Food Network for personal finance authors, and Oprah... isn't likely to showcase one of Suze Orman's competitors as long as Orman pens a regular column for O magazine."
How do personal finance authors get the word out about their books? Radio, print, and increasingly, the Internet. Quite a few PF bloggers seem to have been sent advance copies of Lee Eisenberg's The Number and have written reviews of the book. (I personally was not asked to review or promote the book, but became interested in it after reading about it on other blogs, and decided to add an Amazon link on this site, which is exactly the kind of viral marketing effect the publisher was probably hoping for!)

So who might be the next big thing? PW profiles some candidates.

Loral Langemeier certainly has the out of the ordinary and contrarian ideas that should get her a lot of attention. Her book, The Millionaire Maker (available now), takes a tactical, not psychological approach to building wealth. She thinks entrepreneurship is the way to go and wants people to quit their jobs, start small businesses and buy income-producing rental properties with their savings. She does not focus on cutting expenses or getting out of debt. "Millionaires don't worry about a latte a day, you know," she says. She counters the suggestion that her approach might be risky by saying "it's only risky because most people don't know." Her platform: she has a coaching-consulting company called Live Out Loud and claims that she has made over 200 people millionaires and that none of her 10,000 clients have ever filed for bankruptcy. She herself was a multi-millionaire by age 35. She has done TV segments on a San Francisco station about her financial makeovers, and regularly does appearances with T. Harv Eker (Secrets of the Millionaire Mind), Marc Victor Hansen (Chicken Soup for the Soul) and Robert Kiyosaki. From what I read about this book, it sounds like it could be a big hit, so keep an eye on this one.


Phil Town's book Rule #1 (available late March '06) offers a practical plan for getting rich via value investing. Town says "it's really simple... you just buy a wonderful company and you buy it at an attractive price." He has no formal business training, so his book is said to have a populist twist, and focuses on how the average investor can gather data on the internet. Town also shares a lot of his personal story about how he was transformed from an ex-Green Beret hippie rafting tour guide to the clean-cut motivational speaker and millionaire he is today. He regularly speaks at day-long "Get Motivated" conferences and estimates that he has told his story to "a couple million" people over the past four or five years. His publisher compares the launch of Rule #1 to when they were launching Suze Orman's The 9 Steps to Financial Freedom. They had Town set up a blog a year before publication. They introduced him to key bookstore buyers at BookExpo America (the national convention for the publishing industry), gave their sales reps DVDs of his lectures, and flew a national chain store buyer to see Town speak at a stadium in Philadelphia. And watch your AdSense, bloggers-- the book will be advertised via Google. This book also seems to have a good chance at success, but I wonder if it really says anything new and exciting enough to really make people want to buy it. But the publisher might be thinking that value investing advice, even if it's all been heard before from the likes of Warren Buffett, is going to seem more appealing to more people than the kind of radical plan Loral offers. If I had to bet, I think Loral might just hit a nerve and have Phil beat. But Phil's publisher (Crown) has announced a first printing of 250,000, vs. the 100,000 McGraw Hill says they'll print for Loral. These announced first prints are always complete lies anyway, so that might mean nothing. Who knows. I'll have to report back on these in a month or two with data from Nielsen BookScan, which tracks retail sales, to see if my hunch was correct!

Some other new books mentioned in the PW feature:
The Number, by Lee Eisenberg
Money, A Memoir, by Liz Perle
Not Buying It: My Year Without Shopping, by Judith Levine

Disclosure (sort of): Because I work in the publishing industry, I may occasionally be writing about books published by companies I work for or have worked for in the past. I won't tell you which ones, because I don't want to reveal who I am or where I work. If a book publicist contacts me via this site and asks me to review a book, I won't accept a galley because I won't give out my mailing address. Any book I discuss is one I have either bought, borrowed from the library, read while sitting in a bookstore, or obtained through my job or contacts at other publishing houses who were not told why I wanted a copy. I do have Amazon ads on my site, but otherwise, any financial gain I might get from promoting these books is very indirect and very small. If I praise a book, it is because I think it deserves praise, and if I think a book sucks, I'll say so even if my company publishes it! Either way, I don't think I'm moving the needle. If my blog suddenly started getting a million hits a year, I might reconsider this policy, but for the moment, that's the way it goes, folks. Caveat lector.

Luxembourg et Veritas: More on The Millionaire Next Door

Ok, I felt like I may have been a little harsh the other day. Another thing I DO like about The Millionaire Next Door: his formula for determining whether you're a PAW (Punk-Ass Whitedude? No, Prodigious Accumulator of Wealth.) All Things Financial has a good summary of it here. This formula helps clarify the very good point that it's not all about having a million dollars, it is about when in your life you have it, in relation to your yearly income. If you have $1 million in net worth a year before you retire at 65, and your yearly income is over $160k, you're not really considered "wealthy," or at least not a good accumulator of wealth. Basically, he's saying that if you make that much money a year, you have no excuse for not having saved more. But according to the formula, if you're 64 and you only make $70,000 a year, you are to be congratulated for what you have achieved by even getting to half a million. (But though you are good at accumulating wealth, you're not wealthy. If you're trying to retire on half a million, you'd better keep pinching your pennies, or hope you don't live too long! I'm not sure the formula makes as much sense when applied to older ages.)

But back to the stastistical silliness. In that list of smaller ethnic groups represented among millionaires, I noticed the curious presence of "Luxembourger." This really has to win the prize for great crashing irrelevance. Based on his sample size of about a thousand millionaires, I'm guessing maybe one of them came from Luxembourg. But does the lucrativity of this lucky Luxembourger support the author's theory that these small, recently arrived ethnic groups haven't yet "become fully socialized to our high-consumption lifestyle" and that's why they are well represented among high accumulators of wealth? Not likely: Luxembourg is one of the tiniest, wealthiest countries in the world.

Some information about Luxembourg from the CIA World Factbook:
Population: 468,571 (no, I didn't leave out any zeros. It's about as many people as live in New Orleans, or .007% of the world's population.)
Size: approximately 998 square miles. Smaller than Rhode Island.
GDP per capita: $58,900, which is about 47% higher than in the United States.
Quote: "The country enjoys an extraordinarily high standard of living."

Isn't it heartwarming to think of all those tired, poor, huddled masses of Luxembourgers coming to America to breathe free and become millionaires...

What Color is Your Millionaire?

Considering that I think a lot about personal finance, and bother to write a blog about it, you would think I had more interest in reading books about the topic. I like reading books about larger economic issues, such as The Lexus and the Olive Tree and The World is Flat, both by Thomas Friedman. And books with demographic information, such as Who We Are Now, or about the lifestyles of different social classes, such as