I

NDEX
1 The Li
ttl
e BookofMar
ketMyt
hs 2

2 The Mi
ll
ionai
re NextDoor 4
3 Secr
etsOfThe Mi
ll
ionai
re Mi
nd 9

4 The Ri
ches
tManI
nBabyl
on 12
5 The Mcki
nseyWay 14
6 The Bus
inessSchool 19
7 The Happi
nes
sAdvant
age 21
8 I
nfl
uence Wi
thoutAut
hor
ity 24
9 Ri
chDad PoorDad 27

10 The Bl
ackSwan 33
11 Freakonomi cs 35
12 Big Short 39
13 Swi
m Wi
thThe SharksWit
houtBei
ng Eat
enAl
ive 41
14 WorkRules 46
15 Who Moved MyChees
e? 49
16 Shoe Dog 52
17 WhyAr
en'
tTheyShout
ing 57

18 The 7 Habi
tsOfHi
ghl
yEf
fect
i e1 60
ve Peopl
THEL
ITTL
EBOOKOFMARKETMYTHS
-KenF
isher
War
renBuf
fet
tisknownt
ohavequi
pped t
hathe
i
s85%i
nfl
uenced by Benj
ami
nGr
aham and 15%
by Phi
li
p Fi
sher
.Phi
li
p Fi
sher
sson t
urned outt
o
bea f
ant
ast
icmoneymanager
,wi
tha networ
th
r
unni
ng i
nto bi
ll
ionsand a mar
ketbeat
ing t
rack
r
ecor
d.Ken Fi
sherwr
ites a mont
hly col
umn i
n
For
bes magazi
ne, and i
s t
he publ
icat
ion'
s
l
onges
tcont
inuous
lyr
unni
ng col
umni
st.I
nthi
s
book
,he chal
lenges s
ome bas
ici
nves
ting heur
ist
ics and backs up hi
s
ar
gument
swi
thr
elevantdat
a.

1.MYTH #1 BONDS ARE SAFER THAN STOCKS:Ken Fi

sherchal
lengest
his
bas
icnot
ionbys
howi
ng t
hreehi
stogr
ams
,eachwi
tha l
ongert
imehor
izon.
He par
all
els equi
ty and bond aver
age r
etur
ns wi
th t
hei
r aver
age
vol
ati
li
tyf
oreacht
ime per
iod.Whatwe s
ee i
sthats
tockr
etur
nsout
pace
bond r
etur
nsi
nal
lthr
eet
imeper
iods
,har
dlyanyt
hing s
urpr
isi
ng,butwhat
i
sint
eres
ting i
sthats
tock vol
ati
li
ty decr
eas
ess
ubs
tant
ial
ly overa 30
yearper
iod.The S&P500 vol
ati
li
tyi
slowert
hanbond vol
ati
li
ty(
1.4% vs
.
2.
8%)
.Lowervol
ati
li
ty wi
tht
he ups
ide s
til
lint
act
.Add i
nInf
lat
ion,and
bondshel
dto mat
uri
tys
pel
la per
fectdi
sas
ter
.

2.MYTH #2 THE SUPERI

ORI
TY OF SMALL CAP VALUE STOCKS:A s
mal
l
companyt
radi
ng atanat
tract
ive val
uat
ionmi
ghtbe a gr
eati
nves
tment
,
butone bel
ievest
hats
mal
lcap val
ue wi
llal
waysbe t
he bes
tinves
tment
,
t
hey ar
e wr
ong.Ther
eisno one s
trat
egy whi
ch wor
ksf
orever
.The aut
hor
s
hows us a t
abl
efr
om 1992 t
o 2011 ofr
etur
ns ofdi
ffer
ents
trat
egi
es
(
val
ue,gr
owt
h,mi
d-capset
c.)
.Whatwe s
ee i
sthatt
her
eisno pat
ter
n
what
soevert
hatone s
tyl
eisal
waysbet
tert
hant
he ot
her
.

2
3.MYTH #3
IHEARD I
TIN THE NEWS,SO I
TMUSTBE TRUE
:Accor
ding t
o
t
heaut
hor
,I
fyour
ead orhearabouts
omei
nves
tmenti
dea ors
igni
fi
cant
eventmor
ethan once i
nthe medi
a,i
twon
twor
k."
Even new newsi
stoo
ol
d.The s
ervi
ce ofnewsi
sa val
uabl
eser
vice per
for
med f
orusf
orf
ree.
I
tgi
vesusanunder
standi
ng ofi
nves
tors
ent
iment
.Aneas
ywayt
ost
arti
s
t
o know what ever
yone knows
AND LOOK AWAY. The s
tock mar
ket
di
scount
s al
lwi
del
y hel
d vi
ews
.Real
ity can mat
ter l
esst
han what i
s
expect
ed t
o happen.We mus
tremembert
hat news compani
es ar
efor
pr
ofi
t and hence have t
o publ
ish news t
hat wi
ll
grab eyebal
ls
.The
aut
horadvi
sesust
o us
enewswi
thcar
eand t
ryt
olookf
ors
omet
hing t
hat
f
olksar
en
tfocus
ing on.

Thes
e ar
ejus
t3 oft
he 17 myt
hst
hisbookt
riest
o debunk
.Kenf
ishercal
ls
hi
msel
fa cont
rar
iani
nves
tor
,butnoti
nthegener
icway.Accor
ding t
o hi
m
bei
ng a cont
rar
ian i
nthe gener
ics
ens
e won
thel
p you any mor
ethan
f
oll
owi
ng t
he cr
owd.I
ndependentt
hinki
ng,a cont
rolofouremot
ionsand
pat
ience ar
ethe k
eyf
act
orsf
ors
ucces
s.Ques
tionever
ythi
ng!

-
Vas
avNar
ayanSahgal

3
THEMI
LLI
ONAI
RENEXTDOOR
-
ThomasJ
.St
anl
ey&Wi
l
li
amD.Dank
o
The gener
al pr
emi
se of The Mi
ll
ionai
re Next
Door i
sthat t
he pop cul
tur
e concept of a
mi
ll
ionai
rei
sfal
laci
ous and t
hat mos
t act
ual
mi
ll
ionai
res l
ive a ver
ysi
mpl
eli
fes
tyl
e.Many
peopl
e who hasa hi
ghers
tandar
d ofl
ivi
ng do
notact
ual
ly have much weal
th.Weal
thi
smor
e
of
ten t
he r
esul
t of a l
if
est
yle of har
d wor
k,
per
sever
ance, f
oret
hought and mos
t of al
l,
s
elf
-di
sci
pli
ne.

Mos
t peopl
e who become mi
ll
ionai
res have conf
idence i
nthei
r own
abi
li
ties
.They do nots
pend t
ime wor
ryi
ng aboutwhet
herornott
hei
r
par
ent
swer
e weal
thyorbel
ievi
ng t
hatone mus
tbe bor
nweal
thy.
I
fyourgoali
sto become f
inanci
all
ysecur
e,you'
lll
ikel
y at
tai
nit
.Buti
f
yourmot
ive i
sto mak
e money t
ospend money on t
he good l
if
e,you'
re
nevergoi
ng mak
eit
.Iti
sunf
ort
unat
ethats
ome peopl
ejudge ot
her
sby
t
hei
rchoi
ce i
nfoods
,bever
ages
,sui
ts,wat
ches
,mot
orvehi
cles
,and s
uch.
To t
hem,s
uper
iorpeopl
e have excel
lentt
ast
esi
ncons
umergoods
.Buti
t
i
s eas
ier t
o pur
chas
e pr
oduct
sthat denot
e s
uper
ior
ityt
han t
o be
act
ual
lys
uper
iori
neconomi
c achi
evement
.Al
locat
ing t
ime and moneyi
n
t
he pur
sui
tofl
ooki
ng s
uper
iorof
ten hasa pr
edi
ctabl
e out
come:i
nfer
ior
economi
c achi
evement
.Ifyou'
re notyetweal
thybutwantt
o be s
omeday,
neverpur
chas
e a home t
hatr
equi
resa mor
tgage t
hati
smor
ethant
wice
yourhous
ehol
d'st
otalannualr
eal
ized i
ncome.
Or
dinar
y peopl
e can become weal
thy.Fewert
han 10 per
centbel
ieve
t
hey wi
lleverr
ecei
ve an i
nher
itance i
nthe f
utur
e.Ei
ght
y per
cent of
Amer
ica'
smi
ll
ionai
resar
efi
rst
-gener
ati
on r
ich.Af
fl
uentpeopl
etypi
cal
ly
f
oll
ow a l
if
est
yle conduci
ve t
o accumul
ati
ng money.I
nthe cour
se of

4
i
nves
tigat
ions
,it
sdi
scover
ed s
even common denomi
nat
orsamong t
hos
e
who s
ucces
sful
lybui
ld weal
th.

1.Theyl
ive wel
lbel
ow t
hei
rmeans
.Ingener
al,mi
ll
ionai
resar
efr
ugal
.Not
onl
y do t
hey s
elf
-ident
ify as f
rugal
,they act
ual
lyl
ive t
he l
if
e.They
re
wi
ll
ing t
o payf
orqual
ity,butnotf
ori
mage.
2. They al
locat
e t
hei
rti
me, ener
gy, and money ef
fici
ent
ly, i
n ways
conduci
vet
obui
ldi
ng weal
th.Theyal
sopl
ant
hei
rinves
tment
s.Theybegi
n
ear
ning and i
nves
ting ear
lyi
nli
fe.The aut
hor
s not
ethat
ther
eis an
i
nver
ser
elat
ions
hip bet
ween t
he t
ime s
pentpur
chas
ing l
uxur
yit
emss
uch
ascar
sand cl
othesand t
he t
ime s
pentpl
anni
ng one
sfi
nanci
alf
utur
e.
3.They bel
ieve t
hat f
inanci
ali
ndependence i
s mor
eimpor
tant t
han
di
spl
ayi
ng hi
gh s
oci
als
tat
us.The aut
hor
sspend f
art
oo much t
ime t
o
expl
aint
hispoi
nt:us
ual
lymi
ll
ionai
resdon
thave f
ancycar
sascar
stend
t
o depr
eci
ater
api
dly,f
inanci
alas
set
stend t
o appr
eci
ate.They dr
ive
mundane domes
tic model
s,and t
heyk
eep t
hem f
oryear
s.I
tsmonot
onous
.
4.Thei
rpar
ent
sdi
d notpr
ovi
deeconomi
cout
pat
ientcar
ei.
e.mos
toft
he
mi
ll
ionai
reswer
e notf
inanci
all
ysuppor
ted byt
hei
rpar
ent
s.
5.Thei
radul
tchi
ldr
enar
eeconomi
cal
lys
elf
-suf
fici
ent
.Int
hischapt
er,t
he
aut
hor
scl
ear
lybel
ievet
hatgi
ving moneyt
oadul
tchi
ldr
endamagest
hei
r
abi
li
tyt
osucceed.The aut
horpoi
nts out t
hat t
he mor
e money adul
t
chi
ldr
en r
ecei
ve,t
he f
ewert
hey accumul
ate,whi
let
hos
e who ar
e gi
ven
f
ewerbui
ltup mor
e.
6.Theyar
e pr
ofi
cienti
ntar
get
ing mar
ketoppor
tuni
ties
.Of
ten,t
hos
e who
s
uppl
ythe af
fl
uentbecome weal
thy t
hems
elves
.One oft
he bes
twayst
o
mak
e money i
stos
ellpr
oduct
sors
ervi
cest
othos
e who al
ready have
money.They l
ist a number of occupat
ions t
hey f
eel have l
ong-
ter
m
pot
ent
iali
nthi
sar
ea.
7.Theychos
ethe r
ightoccupat
ion.
Sel
f-empl
oyed peopl
e ar
efourt
imes
mor
eli
kel
yto be mi
ll
ionai
rest
han t
hos
e who wor
kforot
her
s.Ther
eisno
magi
cli
stofbus
ines
sesf
rom whi
ch weal
thi
sder
ived peopl
e can be
5
s
ucces
sfulwi
th any t
ype ofbus
ines
s.I
nfact
,mos
t mi
ll
ionai
re bus
ines
s
owner
s mak
ethei
r money i
ndul
l-nor
mal
indus
tri
es.Ther
es no magi
c
bul
let
.
The aut
horadvi
ce t
o be goal
-or
ient
ed.To s
et dai
ly,weekl
y,mont
hly,
annualand l
if
eti
me goal
s.
Mi
ll
ionai
resknow t
hatt
he mor
etheys
pend t
he mor
ethe need t
oreal
ize.
The mor
ethey r
eal
ize,t
he mor
ethey mus
tal
locat
efori
ncome t
axes
.So,
al
lthos
e who l
ikel
yto become af
fl
uenti
nfut
ure adher
eto an i
mpor
tant
r
ule: To bui
ld weal
th, mi
nimi
ze your r
eal
ized (
taxabl
e) i
ncome and
maxi
mize yourunr
eal
ized i
ncome (
weal
th/
capi
talappr
eci
ati
onwi
thouta
cas
hfl
ow)
.
-
Shi
vangiDeor
a

I
nthi
sbookaut
hor
sTom St
anl
eyand Wi
ll
iam Dank
o wentt
oinves
tigat
eon
how peopl
e getweal
thy,t
hey f
ound s
omet
hing odd.Many oft
he peopl
e
who l
ive i
nups
cal
e nei
ghbor
hoodsand dr
ive l
uxur
iouscar
sdo nothave
ext
reme weal
th.Manypeopl
e who have gr
eatweal
thdo notevenl
ive i
n
ups
cal
e nei
ghbor
hoods
.They al
so compar
ed t
he behavi
oroft
hos
ethey
cal
lUAWs (
Under Accumul
ator
s of Weal
th) and t
hos
e who ar
e PAWs
(
Prodi
giousAccumul
atorofWeal
th)
..PAWsneed t
o achi
eve,t
o cr
eat
e
weal
th, t
o become f
inanci
all
yindependent
,to bui
ld s
omet
hing f
rom
s
crat
ch.UAWsmor
eof
tenneed t
o di
spl
aya hi
ghs
tat
usl
if
est
yle.Thebook
gi
vesi
nsi
ght
sonwhatyou cando t
o become weal
thyand how weal
thi
s
notwhatyou s
pend butwhatyou accumul
ate.I
tiss
een t
hatus
ual
ly al
l
Amer
icansar
efi
rstgener
ati
onaf
fl
uenti
.e.
,theyar
esel
f-mademi
ll
ionai
res
wher
eas maj
ori
ty oft
he Engl
ish have i
nher
ited weal
th.Mor
ethan 90
Per
centofmi
ll
ionai
resi
nAmer
ica havea networ
thbet
ween$1-
10 mi
ll
ion.
We gett
o not
ice s
ome common t
rai
tsbet
ween al
lsucces
sfulmi
ll
ionai
res
,
t
hatar
e:They l
ive wel
lbel
ow t
hei
rmeans
,they al
locat
ethei
rti
me and
moneyef
fici
ent
ly,i
nwaysconduci
vet
o bui
ldi
ng weal
th,t
heybel
ievet
hat

6
f
inanci
ali
ndependence i
s mor
eimpor
tant t
han di
spl
ayi
ng hi
gh s
oci
al
s
tat
us,t
hei
r par
ent
s di
d not pr
ovi
de economi
c out
pat
ient car
e,t
hei
r
adul
t chi
ldr
en s
houl
d be economi
cal
ly s
elf
-suf
fici
ent
, pr
ofi
cient i
n
t
arget
ing mar
ket oppor
tuni
ties and choos
ing r
ight occupat
ions
.The
aver
age l
if
est
yle of t
he Amer
ican mi
ll
ionai
re i
s not what t
he publ
ic
per
cei
ves i
t t
o be, t
hey do not s
pend was
tef
ull
y on expens
ive
aut
omobi
les
,sui
ts,wat
ches r
ather have t
hei
r hands s
et accor
ding t
o
budgett
hatt
hey s
etwher
eas we can s
ee t
he non-
mil
li
onai
res i
.e.
,the
hi
gh-
income onest
end t
ospend l
avi
shl
yonal
lsor
tsofl
uxur
iesand s
ince
t
hey do notbel
ieve i
n accumul
ati
ng weal
th.And s
ince t
hey pl
an t
hei
r
budgetand s
pendi
ng t
hey ar
e whatt
hey ar
etoday,t
hey know t
he r
eal
val
ue ofmoney.About 81 per
cent ofmi
ll
ionai
res pur
chas
ethei
r own
vehi
cles
.Onl
y23.
5 per
centownnew orr
ecentmodel
s.I
nfact
,25 per
cent
ofmi
ll
ionai
reshave notpur
chas
ed a vehi
clei
n4 year
s.

Webs
ter
s def
ines f
rugalas
behavi
or char
act
eri
zed by or r
efl
ect
ing
economy i
nthe us
e ofr
esour
ces
.The oppos
ite off
rugali
swas
tef
ul.We
def
ine was
tef
ulas a l
if
est
yle mar
ked by l
avi
shs
pendi
ng and hyper
-
cons
umpt
ion.Mor
e of
ten t
han not
,the s
pous
esofmi
ll
ionai
resar
e mor
e
f
rugalt
hant
hei
rcount
erpar
t.Behi
nd t
hei
rfr
ugalbehavi
ori
sa s
trong s
et
of bel
ief
s. Fi
rst
,they bel
ieve i
n t
he benef
its of bei
ng f
inanci
all
y
i
ndependent
. Second, t
hey bel
ieve t
hat bei
ng f
rugal i
sthe k
ey t
o
achi
evi
ng i
ndependence.Theyi
nocul
atet
hems
elvesf
rom heavys
pendi
ng
by cons
tant
lyr
emi
ndi
ng t
hems
elvest
hat-YOU AREN
TWHATYOU DRI
VE
manypeopl
e who have hi
gh-
stat
usar
tif
act
s,s
uchasexpens
ive cl
othi
ng,
j
ewel
ry, car
s, and pool
s, have l
itt
le weal
th. I
n gener
al,t
he mor
e
ECONOMI
C OUTPATI
ENT CARE dol
lar
sadul
tchi
ldr
en r
ecei
ve,t
he f
ewer
t
hey accumul
ate,whi
let
hos
e who ar
e gi
ven f
ewerdol
lar
s accumul
ate
mor
e.They t
each t
hei
r chi
ldr
en a Fundament
alr
uler
egar
ding weal
th
bui
ldi
ng -what
everyouri
ncome,al
waysl
ive bel
ow yourmeans
.Af
fl
uent

7
bus
ines
sowner
shave over
come mos
toft
hei
rfear
s.Theyhave i
nocul
ated
t
hems
elvesf
rom manyf
ear
sbybecomi
ng compl
etel
ysel
f-s
uff
ici
ent
.And i
t
wast
he ver
yst
ruggl
eto become economi
cal
lys
elf
-suf
fici
entt
hathel
ped
t
hes
e bus
ines
sowner
sover
come t
hem.Taki
ng f
inanci
alr
iski
sevi
dence of
cour
age.The char
act
er of t
he bus
ines
s owner i
s mor
e i
mpor
tant i
n
pr
edi
cti
ng hi
slevelofweal
tht
hant
hecl
ass
ifi
cat
ionofhi
sbus
ines
s.So we
s
ee t
hatwhatwe have everi
magi
ned abouta mi
ll
ionai
re nextdoorwas
s
pecul
ati
ve.

-
Tani
sha Agar
wal

8
SECRETSOFTHEMI
LLI
ONAI REMIND
-
T.HarvEker
Thi
s book pr
ovi
des t
he mi
ssi
ng l
ink bet
ween
yourdes
iref
ors
ucces
sand yourachi
evement
ofs
ucces
s.I
tsal
labouthow we t
hinkand act
wheni
tcomest
o money.The aut
horT
.Har
vEk
er
s
peaks f
rom hi
s own exper
ience.
Thei
deasi
nthi
sbookar
emeantt
o beappl
ied.
Ek
eri
nvi
tesyou t
oreal
lys
tudy t
he book
,keep
what wor
ks and t
hrow away what does
nt
.He
s
tres
sest
hatI
fyouwantt
o move t
o a hi
gherl
evelofl
if
e,youhave t
o be
dynami
c(l
etgo ol
d waysoft
hinki
ng and adoptnew ones
).

Havi
ng t
op-
of-
the-
line t
ool
sisi
mper
ati
ve,but bei
ng t
he t
op-
not
ch
car
pent
erwho mas
ter
ful
lyus
est
hos
etool
sisevenmor
e cr
iti
cal
.

Yourl
evelofs
ucces
sisl
argel
y dependenton yourchar
act
er,t
hinki
ng
and bel
ief
s.The r
esul
ts you ar
e get
ting i
n yourout
erwor
ld(
incl
udi
ng
money,weal
th,heal
th et
c.)ar
ea r
efl
ect
ion ofyouri
nnerwor
ld.The onl
y
wayt
oper
manent
lychangeyourl
eveloff
inanci
als
ucces
sist
ores
etyour
f
inanci
alt
her
mos
tat
,i.
e.change yourmoneybl
uepr
int
.

Ever
ythi
ng we t
hink
,feeland do aboutmoney wer
etaughtt
o us and
condi
tioned s
inceyoung.Al
lthes
tat
ement
syouhear
d aboutmoneywhen
youwer
eyoung r
emai
ninyours
ubcons
ciousmi
nd aspar
toft
hebl
uepr
int
t
hati
srunni
ng yourf
inanci
all
if
e.Thi
spr
ogr
ammi
ng af
fect
show we t
hink
,
f
eel
,actand event
ual
lywhatr
esul
tswe get
.

Al
ackofmoneyi
snever
,ever
,evera pr
obl
em.A l
ackofmoneyi
smer
ely
as
ympt
om ofwhati
sgoi
ng on under
neat
h.The bi
gges
treas
on behi
nd

9
t
he f
ight
s peopl
e have about money i
s not t
he money i
tsel
f,but t
he
mi
smat
choft
hei
rbl
uepr
int
s.I
tdoes
ntmat
terhow muchmoneyyouhave
ordon
thave.I
fyourbl
uepr
intdoes
ntmat
ch t
hatoft
he per
son you
re
deal
ing wi
th,you
llhavea maj
orchal
lenge.Dealwi
tht
her
oot
sins
tead of
t
he f
rui
tsand have a good s
hotofmaki
ng i
twor
k.

Ek
erexpl
ainst
he 3 k
ey s
our
cesofpr
ogr
ammi
ng ver
bal(
whatwe wer
e
t
olds
inceyoung)
,model
li
ng (
thepeopl
ewemodelorr
ebelagai
nst
),and
s
peci
fi
cinci
dent
s(exper
iencest
hats
hape ourbel
ief
s).He al
so expl
ains
i
n det
ail how t
his pr
ogr
am can be changed, t
hrough 4 el
ement
s:
Awar
enes
s,Under
standi
ng,Di
sas
soci
ati
onand Recondi
tioni
ng.

WEALTH PRI
NCI
PLESARE:

1.
Youri
ncome cangr
ow onl
ytot
he ext
entyoudo!

2.I
fyouwantt
o change t
he f
rui
ts,youwi
llf
irs
thave t
o change t
he r
oot
s

i
.e.i
fyouwantt
o change t
he vi
sibl
e,youmus
tfi
rstchange t
he i
nvi
sibl
e.

3.Yourpr
ogr
ammi
ng l
eadst
o yourt
hought
s;yourt
hought
slead t
o your

f
eel
ings
;yourf
eel
ingsl
ead t
o youract
ions
;youract
ionsl
ead t
o your

r
esul
ts.

4.Whent
he s
ubcons
ciousmi
nd choos
esbet
weendeepl
yroot
ed emot
ions

and l
ogi
c,emot
ionswi
llal
mos
tal
wayswi
n.

5.I
f your mot
ivat
ion f
or acqui
ring money or s
ucces
s comes f
rom a

non-
suppor
tive r
oots
uch asf
ear
,anger
,ort
he need t
opr
oveyour
sel
f,

yourmoneywi
llneverbr
ing youhappi
nes
s.

6.Cons
cious
nes
sisobs
ervi
ng yourt
hought
sand act
ionss
othatyoucan

l
ive f
rom t
rue choi
ce i
nthe pr
esentmomentr
athert
han bei
ng r
un by

10
Youhave t
o bel
ieve t
hatyouar
ethe one who cr
eat
esyours
ucces
sthat
you ar
ethe one who cr
eat
esyourmedi
ocr
ity,and t
hatyou ar
ethe one
cr
eat
ing yours
truggl
ear
ound moneyand s
ucces
s.I
fyouwantt
o getr
ich,
f
ocuson maki
ng,k
eepi
ng,and i
nves
ting yourmoney.I
fyou wantt
o be
poor
,focusons
pendi
ng yourmoney.

The Booki
nThr
ee Sent
ences
:
1.
Ifyou ar
e notf
ull
y,t
otal
ly,and t
rul
y commi
tted t
o cr
eat
ing weal
th,
chancesar
e youwon
t.
2.
Ifyourgoali
stobecomf
ort
abl
e,chancesar
eyou
llnevergetr
ich.But
i
fyourgoali
sto be r
ich,chancesar
e you
llend up mi
ght
ycomf
ort
abl
e.
3.
The Law ofI
ncome:You wi
llbe pai
dindi
rectpr
opor
tiont
othe val
ue
youdel
iveraccor
ding t
othe mar
ket
place
.

A wi
se per
sons
houl
d have moneyi
nthei
rhead,butnoti
nthei
rhear
t.

Have a Mi
ll
ionai
re Mi
nd.
-
Shi
vangiDeor
a

11
THERI
CHESTMAN I
N BABYL
ON
-
GeorgeS.Cl
ason
I
nol
d Babyl
ont
her
eoncel
ived a ver
yri
chman
named Ar
kad who was f
amous f
or hi
s gr
eat
weal
th and l
iber
ali
ty. Hi
s chi
ldhood f
riends
once came t
o hi
m,as
king hi
m why f
ate has
f
avour
ed hi
mso much t
hathe has gr
own r
ich
whi
let
hey r
emai
n poor
,even t
hough t
hey'
ve
wor
ked har
der t
han Ar
kad has
.Ar
kad r
epl
ies
t
hathe was once a har
d wor
king s
cri
be who
made a dealwi
th a ver
yri
ch man,Al
gami
sh,f
ort
he s
ecr
ett
o weal
thi
n
exchange f
ora copy oft
he Ni
nthl
aw i
mmedi
atel
yscr
ibed i
nto cl
ay.The
r
ichmanagr
eed and t
henextday,whenAr
kad del
iver
ed t
hecar
ving,t
he
r
ich man del
iver
ed i
nret
urnt
he s
ecr
etofweal
th."
Ifound t
he r
oad t
o
weal
th,
"he s
aid,"
WhenIdeci
ded t
hata par
tofal
lIear
ned wasmi
ne t
o
k
eep.And s
o wi
llyou.
"Ar
kad t
henr
elat
est
hatheas
ked t
hes
ameques
tion
t
hati
sundoubt
edl
y on hi
sfr
iends
mi
nd,"
Isn'
tal
lthatImak
eismi
ne t
o
k
eep?"Al
gami
sht
hen s
aid no.A man had t
o pay f
orhi
scl
othes
,forhi
s
f
ood,et
c.,butt
hati
fhe r
egul
arl
ysaved atl
eas
ta t
ent
h ofhi
sincome
and asmuchmor
eashecoul
d af
for
dtos
aveand putt
hatmoneyt
o wor
k,
ear
ning i
nter
est
,he woul
d become weal
thy.
Ar
kad r
elat
est
hathe di
d asadvi
sed,s
avi
ng a t
ent
hofhi
sincome f
ora
year
,theni
nves
ting t
hatmoneywi
tha br
ickmak
erwho wentona j
our
ney
t
o buyj
ewel
stot
rade.He r
elat
ed t
hist
o Al
gami
sh,who cas
tigat
ed Ar
kad
f
ort
hisf
ool
ishnes
s."
Ever
yfoolmus
tlear
n,"he s
aid,"
Butwhy t
rus
tthe
knowl
edge ofa br
ick mak
eraboutj
ewel
s? Woul
d you go t
othe br
ead
mak
ert
oinqui
re about t
he s
tar
s?"Al
gami
sht
hen s
aid,"
He who t
akes
advi
ce abouthi
ssavi
ngsf
rom one who i
sinexper
ienced i
nsuchmat
ter
s,
wi
llpay wi
th hi
ssavi
ngsf
orpr
ovi
ng t
he f
als
ity oft
hei
ropi
nions
."Ar
kad
t
hens
aved hi
smoneyf
oranot
heryear
,and he i
nves
ted i
twi
thAgger
,the

12
s
hiel
d mak
erwho us
ed i
tto buy br
onze and ever
yfour
th mont
h Agger
pai
d Ar
kad r
entf
ort
he us
e oft
hes
efunds
.Ar
kad s
pentt
hes
e di
vidends
on f
ine cl
othi
ng and r
egul
arl
yschedul
ed f
eas
ts.Al
gami
sh comment
sthat
Ar
kad i
s"eat
ing t
he chi
ldr
enofhi
ssavi
ngs
"bynoti
nves
ting t
hem.
Ar
kad cont
inued t
osave a t
ent
h ofhi
sear
ningsf
ors
ubs
equentyear
s,
unt
ilhe metAl
gami
sh agai
n af
tert
wo year
s.Ar
kad i
nfor
mshi
mthathi
s
ear
ningsear
n mor
e and now he doesnott
ake advi
ce f
rom br
ickmak
er
exceptaboutbr
ickmaki
ng.Al
gami
sht
hen s
aid,
You have l
ear
ned your
l
ess
onswel
l.Fi
rstyoul
ear
ned t
oli
veuponl
esst
hanyoucoul
d ear
n.Next
youl
ear
ned t
oseekadvi
ce f
rom t
hos
e who wer
e compet
entt
hrought
hei
r
ownexper
iencet
ogi
vei
t.And,l
ast
ly,youhavel
ear
ned t
omak
egol
d wor
k
f
oryou.
Al
gami
sh becomes s
o pl
eas
ed wi
th how Ar
kad has t
aken hi
sles
sons t
o
hear
t,he hi
resAr
kad asa managerofhi
ses
tat
einNi
ppur
.Bycont
inui
ng
t
osave and i
nves
twi
sel
y,Ar
kad r
elat
est
hathe became t
he weal
thyman
t
hathe i
snow.

-
Khus
hboo Agar
wal

13
THEMCKI
NSEYWAY
-
Ethan
.M.
Ras
iel
The Mcki
nsey way wr
itt
en by Et
han.
M.Ras
iel
empahs
izes t
he r
igor
ous t
rai
ning of t
he
Mcki
nsey-
itest
o be s
truct
ured i
n ever
y as
pect
of t
hei
r appr
oach t
o f
indi
ng s
olut
ions t
o
bus
ines
spr
obl
ems
-be i
tthi
nki
ng orwor
king or
s
ell
ing t
he s
olut
ions
.
Al
sot
her
eis a magi
c number of 3 i
n ever
y
appr
oach:
-
1)
Thi
nki
ng ofbus
ines
spr
obl
ems
2)
wor
king t
osol
ve t
hem
3)
Sel
li
ng t
he s
olut
ions
Letusdes
cri
be each

1)I
tsayst
hatwheneverwe s
tar
tofbus
ines
spr
obl
ems,
gat
herasmany
f
act
saspos
sibl
e.Mos
tcons
ult
ant
sar
egener
ali
sts
,event
heexper
ienced
ones
.So f
act
shel
pthem i
ndeal
ing wi
ths
har
ehol
der
s& f
orguti
nst
inct
s.
Thef
irm pr
omot
escl
ari
tyoft
hought& expr
ess
ionand t
hust
hecons
ult
ant
s
need t
o f
oll
ow t
he MECE r
ule- Mut
ual
ly excl
usi
ve & col
lect
ivel
y
exhaus
tive.They al
sot
ryt
osol
ve t
he pr
obl
emst
othe hi
ghes
tpos
sibl
e
ext
end by Cr
eat
ing an i
nit
ialHypot
hes
is.We need t
o check var
ious
pos
sibi
li
ties
:
Under
standi
ng t
he r
ightpr
obl
em,Don
tmak
efact
sfi
tint
othe s
olut
ion,
mak
esur
eitf
itsyourcl
ient
'spr
efer
ences
.
Fur
thert
hiscanbe check
ed t
hrough80/
20 r
ule.
Fi
ndi
ng t
he k
eydr
iver
s.
The el
evat
ort
est
.
2) The s
econd one i
s about t
he day t
o day pr
obl
em s
olvi
ng whi
ch
i
ncl
udesr
esear
ch,i
nter
views
,br
ains
tor
ming et
c.Br
ows
etr
ade magazi
nes

14
annualr
epor
tsofcl
ient
sfort
his
.
They gi
ve ust
he i
dea ofj
argons
,tr
ade pr
act
ices& cur
rency i
ssuest
he
i
ndus
tryf
aces
.
Et
han
s al
sos
ays her
e.Setdef
ini
te mi
les
tones whi
ch you can achi
eve.
Don
tgi
ve f
als
eimpr
ess
ions
.
Mcki
nsey nevers
ell
soradver
tis
es,i
tmar
ket
sby i
tsval
uabl
eins
ight
s&
publ
icat
ions
.
I
tal
sos
ayst
hathow i
mpor
tantt
eam wor
kisatMcki
nsey.Get
ting t
he mi
x
r
ight
,you mus
tchoos
e peopl
e wi
th gr
eats
kil
lset& per
sonal
ity.A l
itt
le
bond goesa l
ong way!
3)Thi
sisbas
ical
ly abouthow t
he cons
ult
ant
stak
e up t
he i
nter
view wi
th
t
he cl
ient
sand s
ell
ing ofs
olut
ions
.
Few Ti
psf
ors
ucces
sfuli
nter
viewi
ng:
Havet
hebos
ssetup i
nter
viewi
ng,I
nter
view i
npai
rs,Li
stenand notLead,
Par
aphr
ase af
terl
ist
eni
ng,Us
ethe i
ndi
rectappr
oach,don
tas
kfort
oo
much.The bes
tsol
uti
on,no mat
terhow wel
liti
sres
ear
ched anal
yzed or
s
olved t
her
eis no poi
nti
fyourcl
ientdoes
ntbuy i
t.One oft
he mai
n
component
sofs
ell
ing i
sto mak
epr
esent
ati
ons
.Yous
houl
d wal
kthepoi
nts
t
othe audi
ence bef
orehand.
Thus Iwoul
d l
iket
o concl
ude t
hat Cl
ient
s pl
ay a maj
or r
olei
n any
engagementand i
tisi
mp t
okeep t
hem byyours
ide.I
tst
he companyt
o
be l
ook
ed ati
fyouwantt
osee your
sel
fasanas
pir
ing cons
ult
ant
The f
inalpar
tsoft
he bookt
alkaboutt
he l
if
e af
terMcki
nsey and about
how t
osur
vive.
-
Vans
hik
a Damani

Thi
sbook out
linest
he way t
hatMcKi
nsey appr
oachesand at
tempt
sto
s
olve bus
ines
spr
obl
ems
.
1.The wayoft
hinki
ng aboutt
he pr
obl
em
2.Wor
king t
osol
ve t
he pr
obl
em
3.Sel
li
ng s
olut
ions
.

15
Fi
rst
,you have t
o wor
k on bui
ldi
ng t
he s
olut
ion.The mos
timpor
tanti
s
get
ting al
lthef
act
s.Thi
sist
hef
irs
tpi
ll
ar.Thes
econd i
swor
king onmaki
ng
al
istoft
he i
ssuest
o wor
kon.Thi
sli
sts
houl
d be
MECE
,thati
s,Mut
ual
ly
Excl
usi
ve and Col
lect
ivel
y Exhaus
tive t
o pr
event over
lappi
ng and
conf
usi
on.Thet
hir
d and f
inalpi
ll
ari
sdef
ini
ng,gener
ati
ng and t
est
ing t
he
i
nit
ialhypot
hes
is.The es
sence oft
he i
nit
ialhypot
hes
isi
sFi
gur
e outt
he
s
olut
iont
othe pr
obl
em bef
ore yous
tar
t.
No t
wo pr
obl
ems ar
eident
ical
,you need t
o devel
op an appr
oach t
o
eachdi
sti
nctpr
obl
em i
na di
ffer
entway.St
artwi
thi
dent
ifyi
ng t
he act
ual
pr
obl
em t
hismaynotal
waysbe t
he one youar
e as
ked t
osol
ve.The way
t
o do t
hisi
sto di
g deeperand go t
hroughal
lthe f
act
s.Then,s
ugges
tto
t
he cl
ientwhatyou t
hinkyou s
houl
d be wor
king on and l
eave t
he f
inal
deci
sionup t
othem.
Don
ttwi
stt
he f
act
stof
ityourhypot
hes
is.Mak
esur
ethe s
olut
ionf
itsyour
cl
ient
.Att
imes
,eveni
fyoucannotcome up wi
thani
nit
ialhypot
hes
is,you
cans
til
lfi
gur
e outt
he s
olut
ionbyt
hor
oughf
act
-bas
ed anal
ysi
s.
Theaut
horl
atert
alksaboutvar
iousr
ulest
hatcanbeappl
ied t
o pr
obl
em
s
olvi
ng:

-80/
20Rul
ef
orexampl
e,80per
centoft
heor
der
scomef
rom 20per
cent
oft
he
cus
tomer
s.
-Don'
tboi
lthe oceans
mar
twor
kbeat
shar
d wor
k
-Fi
nd t
he k
eydr
iver
sthataf
fectyourbus
ines
s
- The El
evat
orTes
t know your s
olut
ion s
othor
oughl
ythat you can
expl
aini
ttot
he cl
ienti
n30 s
econds
- Pl
uck t
he l
ow hangi
ng f
rui
t - Sei
ze ever
y s
mal
l oppor
tuni
ty f
or
i
mpr
ovementwhi
les
olvi
ng a pr
obl
em
-Mak
e a char
tever
ydayj
otdowns
omet
hing new youl
ear
n
-Hi
tsi
ngl
esdon
twas
tet
ime & ener
gy at
tempt
ing t
osol
ve ever
ythi
ng
al
latonce

16
-Al
wayst
hinkoft
he bi
g pi
ctur
e
-Lear
ntos
ay"
Idon'
tknow"be hones
t
-Don'
taccept"
Ihave no i
dea"-chal
lenge i
tir
res
pect
ive ofwhet
heri
t
comesf
rom ot
her
sorf
rom youyour
sel
f

The s
econd par
toft
he bookt
alksaboutt
he McKi
nseywayofwor
king t
o
s
olve bus
ines
spr
obl
emsi
.e.how t
he Fi
rmi
mpl
ement
sit
spr
obl
em-
sol
ving
modelona day-
to-
daybas
is.

The aut
horar
guest
hatt
he r
ightwayt
osel
la s
ervi
ce ora pr
oducti
snot
t
o bar
ge i
nto yourcus
tomerwi
ths
ampl
esand gl
oss
ypi
ctur
esofbenef
its
;
butt
o bet
her
eatt
her
ightt
imeand mak
esur
ether
ightpeopl
eknow who
youar
e.

McKi
nsey nevers
ell
soradver
tis
es,i
tmar
ket
smos
tly by net
wor
king t
he
i
dea i
stol
ett
her
ightpeopl
eknow t
hatMcKi
nseyi
sther
ewhent
heyf
ace
as
eemi
ngl
yuns
olvabl
e pr
obl
em.

The advi
ce her
e i
sto s
truct
ure your engagement wel
l.Set def
ini
te
mi
les
toneswhi
chyoucanachi
eve.Don'
tgi
ve f
als
eimpr
ess
ions
.

The s
ucces
sofa t
eam dependsonget
ting t
he r
ightmi
xofmember
s.Team
bondi
ng i
s es
sent
ialt
o gett
he mos
toutoft
hem.Lett
hem know what
t
hey
re wor
king onand t
reatever
yone wi
thr
espect
.

An i
nter
est
ing pi
ece ofadvi
ce i
s"The f
irs
trul
e ofs
ucces
sin a hi
erar
chy
i
s:mak
e yourbos
slookgood.To pl
eas
e yourbos
s,do yourj
ob wel
l.Keep
yourbos
sinf
ormed,butnotover
loaded wi
thi
nfor
mat
ion.I
fyourbos
slooks
good,youl
ookgood.
"
He al
sot
alksaboutt
he i
mpor
tance ofcons
tant
lyas
ser
ting yourequal
ity
unl
esst
old ot
her
wis
e.

17
I
mpor
tantt
ipsf
orr
esear
ch:
-Pi
ckbr
ainsofexper
ts
-Wade t
hroughi
nfor
mat
ionont
he I
nter
net
,ini
ndus
trypubl
icat
ions
,et
c.
-Lookf
orout
lier
s
-Lookf
ort
he bes
tpr
act
ice
-Lear
nfr
om ot
her
ss
ucces
sesand mi
stak
es
-Lever
age val
uabl
eti
me

Nexti
sthe br
ains
tor
ming pr
oces
st
he k
ey i
sgood pr
epar
ati
on and a
pr
operf
rame ofmi
nd.The aut
hort
alksabout3 br
ains
tor
ming exer
cis
es.

The t
hir
d par
toft
he bookt
alksabouts
ell
ing s
olut
ions
:
-St
ruct
ured pr
esent
ati
on
-Di
mini
shi
ng mar
ginalr
etur
nst
o ef
for
ts
-Don
tsur
pri
se yourcl
ient
,tal
ktot
hem bef
orehand

Fi
nal
ly,t
he aut
hort
alksabouts
urvi
ving atMcKi
nseyand l
if
e af
teri
t.

Avant
ika Gupt
a

18
THEBUSI
NESSSCHOOL
-
Rober
tT.Ki
yos
ki
Thi
sisanot
herpi
ece by Rober
tT.Ki
yos
kiaf
ter
Ri
ch Dad PoorDad whi
ch hasagai
n changed
s
ome ofmyper
cept
ionsabouti
ncome,as
set
s&
weal
th.
Int
hisbookt
he aut
hort
alksaboutus
ing
Net
wor
k Mar
ket
ing Bus
ines
s a.
k.a.Mul
ti-
Level
Mar
ket
ing (
MLM) anyone can become
f
inanci
all
yindependent
.Ins
impl
eter
msMLM i
s
us
ing exi
sti
ng s
ales
man t
o appoi
nt new
s
ales
man& payi
ng t
he exi
sti
ng oness
ome commi
ssi
onf
ort
he s
alesmade
byt
he new ones
. Tupper
war
e,Amway,Avon,Or
ifl
ame ar
esome exampl
es
ofs
ome compani
eswho made i
tbi
gjus
tby us
ing Mul
ti-LevelMar
ket
ing
ast
hei
rst
rat
egy.
Bas
ed ont
he conceptt
hatwor
d ofmout
hist
he bi
gges
t& mos
timpact
ful
adver
tis
ing oft
he pr
oductaswel
last
he company,MLM ai
mst
oreduce
t
he cos
tofMar
ket
ing bya s
igni
fi
cantamount
.Ital
so decr
eas
est
he cos
t
ofphys
icals
tor
esand war
ehous
es.Thi
scos
treduct
ionhel
pst
hecompany
t
o paycommi
ssi
ont
oit
ssal
esmen.Fut
ures
aleoft
hepr
oducti
sbas
ed on
t
he pr
oductqual
ityand cus
tomers
ati
sfact
ion.
AsperRober
tT.Ki
yos
kial
lthes
kil
lsa bus
ines
smanneedst
obes
ucces
sful
can be l
ear
ntby j
usti
nves
ting a f
ew year
sin a Mul
ti-
LevelMar
ket
ing
bus
ines
s.Mos
timpor
tantoft
hos
eski
ll
srequi
red t
o exceli
nantbus
ines
sis
Sal
es,Leader
shi
p,Emot
ionalquot
ientand i
nves
ting i
nfi
nanci
alas
set
s.
Sal
es-I
f we s
ee f
rom one per
spect
ive ever
ythi
ng we do i
ssel
li
ng
s
omet
hing ouri
deas
,opi
nions
,ski
ll
set
c.I
fyouwantt
o buys
omet
hing you
have t
osel
lsomet
hing f
irs
t.
Leader
shi
p-Accor
ding t
othe aut
horl
eader
shi
pisnota choi
ce i
fyou
wantt
o mak
eitl
arge.
Emot
ionalquot
ient
-A l
otofpeopl
e have good I
Q and ar
efi
nanci
all
y

19
l
iter
ate,but s
til
la f
ract
ion of t
hem go bi
g.Emot
ionaland s
pir
itual
s
tabi
li
tygi
vesyoudi
sci
pli
ne and mi
nimi
zesyourer
ror
sthatyoumak
ejus
t
outoff
rus
trat
ionori
na hur
rymos
toft
imesand r
egr
etl
ater
.
I
nves
ting i
nfi
nanci
alas
set
s-I
nst
ead ofbuyi
ng depr
eci
ati
ng as
set
s,
pr
ior
itys
houl
d be onbuyi
ng f
inanci
alas
set
s.So t
hatwe canmak
e money
wor
kforusi
nst
ead ofwor
king har
dformoney.
Thes
eski
ll
scanhel
p anyonet
oshi
ftf
rom Empl
oyeeors
mal
lbus
ines
sowner
t
o a Bus
ines
sman & an I
nves
torwhi
ch i
sthe onl
y pat
htowar
dsear
ning
weal
thand f
inanci
alf
reedom.
Anot
heramazi
ng t
hing t
hisbookt
alksabouthow t
he aut
hors
eess
ome of
t
he gr
eat
estmen ofal
lti
me,whi
chi
sent
irel
y di
ffer
entf
rom t
he way mos
t
ofuss
ee.
Formos
tofusThomasEl
wa Edi
sonwasani
nvent
or.Buti
nreal
ityhe never
i
nvent
ed Bul
b.He j
usti
mpr
ovi
sed i
t.He wasact
ual
lya BUSI
NESSMAN who
co-
founded Gener
al El
ect
ric. I
f we r
ead hi
s back s
tor
y he was a
bus
ines
sman al
lal
ong s
ince hi
schi
ldhood days
.Itwasnott
he Bul
bthat
made hi
mri
chbutt
he NETWORK behi
nd i
tthatmade hi
mri
ch.Same goes
f
orBi
llGat
es,Mar
kZuck
erber
g,and War
ren Buf
fet
tet
c.They cont
rolt
he
s
yst
em.Be t
hatt
he s
yst
em ofl
ine,pol
es,s
kil
led peopl
e,r
elay s
tat
ions
behi
nd t
he Bul
b ort
he s
yst
em behi
nd Mi
cros
oftWi
ndows i
.e.Har
dwar
e,
communi
cat
ion,acces
sibi
li
ty.
Iwoul
d cer
tai
nlyr
ecommend r
eadi
ng t
hisbookwi
thanopenmi
nd and i
t
wi
llcer
tai
nlychange yourper
spect
ive abouta t
hing ort
wo.

Ifyouwantt
o be r
ichyouneed t
o be a bus
ines
sownerand ani
nves
tor
.
SaysRober
tT.Ki
yos
ki.

-
Yas
hSet
h

20
THEHAPPI
NESSADVANT
AGE
-ShawnAchor
The book i
s wr
itt
en wi
thl
ots of humour but
avoi
dst
he new age t
rendsand booki
sabout
happi
nes
s.I
fIhad t
orecapi
tul
atet
hisbookon
i
tst
hree t
ermi
twoul
d be as
siduous
,happi
nes
s
and opt
imi
sm.I
tis a mus
t-r
ead f
or ever
yone
t
ryi
ng t
o excel i
n a wor
ld of i
ncr
eas
ing
wor
kloads
,st
res
s,and negat
ivi
ty.TheHappi
nes
s
Advant
age i
s notonl
y abouthow t
o become
happi
eratwor
k.I
t'sabouthow t
oreap t
he benef
itsofa happi
erand
mor
epos
iti
vemi
nd-
sett
oachi
evet
heext
raor
dinar
yinourwor
kand i
nour
l
ives
.

The mi
nd i
sit
sownpl
ace,and i
nit
sel
fcanmak
e a heavenofhel
l,a hel
l
ofheaven
.
The s
even pr
inci
ples of pos
iti
ve ps
ychol
ogy t
hat f
uel s
ucces
s and
per
for
mance atwor
k(t
hathel
ped Har
var
dst
udent
sreach t
hei
rful
les
t
pot
ent
ial
):
1. The Happi
nes
s Advant
age: Pos
iti
ve br
ains have a bi
ologi
cal
advant
age overbr
ainst
hatar
e neut
ralornegat
ive.
Sci
ent
ist
s di
scover
ed mor
e pr
ooft
hat happi
nes
s caus
es s
ucces
s when
t
hey s
tar
ted exami
ning how pos
iti
ve emot
ionsaf
fect
sourbr
ainf
unct
ion
and change ourbehavi
our
.The goali
stol
if
tyours
pir
itss
othatyoucan
r
eap al
lthe benef
itsofhappi
nes
sadvant
age.
Medi
tat
e:Res
ear
ch s
hows t
hat r
egul
ar medi
tat
ion can per
manent
ly
r
ewi
ret
he br
aint
orai
sel
evel
sofhappi
nes
s,l
owers
tres
s,f
eel
ingsofcal
m
and cont
ent
mentand eveni
mpr
ove i
mmune f
unct
ion.
Fi
nd s
omet
hing t
olookf
orwar
dtoi
.e.wheneveryouneed t
o boas
tyour
happi
nes
sremi
nd your
sel
f about i
t.Ant
ici
pat
ing f
utur
e r
ewar
ds can
act
ual
lyl
ightup t
he pl
eas
ure cent
ersi
n yourbr
ain much ast
he act
ual

21
r
ewar
d wi
ll
.
Commi
tcons
ciousactofki
ndnes
s.
I
nfus
e pos
iti
vit
yint
o yours
urr
oundi
ngs
.
Exer
cis
e.
Spend money(
butnotons
tuf
f):Cont
rar
ytot
he popul
ars
ayi
ng,money
can buy happi
nes
s,butonl
yifus
ed t
o do t
hingsasoppos
ed t
osi
mpl
y
have t
hings
.Ins
tead ofs
pendi
ng mor
e on t
hings
,spend on exper
iences
and bui
ldi
ng your
sel
ves (
anal
yze whi
ch i
s l
ong t
erm happi
nes
s).
Reappor
tionmoneyf
rom
havi
ngt
odoi
ngl
ist
.
Exer
cis
ea s
ignat
ures
trengt
h:Ever
yone i
sgood ats
omet
hing and t
he
mor
e you us
e your s
ignat
ures
trengt
hs i
n dai
lyl
if
e,t
he happi
er you
become.

2.The Ful
crum and t
he Lever
:Ourabi
li
tyt
osucceed cons
tant
lychanges
bas
ed onourmi
nds
et.Adj
ustourf
ulcr
um (
minds
et)i
na wayt
hatgi
vesus
t
he l
ever(
power
)to be mor
eful
fi
ll
ed and s
ucces
sful
.

3.The Tet
risEf
fect
:Thi
spr
inci
plet
eachesushow t
oret
rai
nourbr
ainst
o
s
pot pat
ter
ns of pos
sibi
li
ty, s
o we can s
ee and s
eize oppor
tuni
ty
wher
everwe l
ook
.

4.Fal
li
ng Up:I
nthe mi
dstofdef
eat
,st
res
s,and cr
isi
s,ourbr
ains map
di
ffer
entpat
hst
o hel
p uscope.Achorus
est
he conceptoff
all
ing up i
n
or
dert
o des
cri
be t
he ment
alpat
hthatwe need t
ofi
nd,s
othatwe may
be abl
e t
o avoi
d f
ail
ure and f
ind t
he way t
owar
ds happi
nes
s and
s
ucces
s.

5.The Zor
ro Ci
rcl
e:When chal
lengesl
oom and we getover
whel
med,our
r
ati
onalbr
ainscan gethi
jack
ed by emot
ions
.Thi
spr
inci
plet
eachesus
how t
oregai
n cont
rolby f
ocus
ing f
irs
t on s
mal
lst
eps and gr
adual
ly
expandi
ng our ci
rcl
eto achi
eve bi
gger and bi
gger ones
.The poi
nt:
22

Smal
lsucces
sescanadd up t
omaj
orachi
evement
s.Al
litt
akesi
sdr
awi
ng
t
hatf
irs
tci
rcl
eint
he s
and
.
6.The 20-
Second Rul
e:Thi
spr
inci
ples
howshow,by maki
ng s
mal
lener
gy
adj
ust
ment
s,wecanr
erout
ethepat
hofl
eas
tres
ist
anceand r
epl
acebad
habi
tswi
thgood ones
.
7.Soci
alI
nves
tment
:Int
he mi
dstofchal
lengesand s
tres
s,s
ome peopl
e
choos
e t
o hunk
er down and r
etr
eat wi
thi
nthems
elves
.But t
he mos
t
s
ucces
sfulpeopl
einves
tint
hei
rfr
iends
,peer
s,and f
ami
ly member
sto
pr
opelt
hems
elvesf
orwar
d.Thi
spr
inci
plet
eachesushow t
oinves
tmor
ein
one of t
he gr
eat
est and r
eli
abl
e pr
edi
ctor
s of s
ucces
s and
excel
lenceours
oci
als
uppor
tnet
wor
k.Themor
esoci
als
uppor
tyouhave,
t
he happi
eryouar
e.
The Ri
ppl
e Ef
fect
:Spr
ead t
he happi
nes
sadvant
age atwor
k,home and
beyond.Ouract
ionshave a r
ippl
e ef
fectdue t
othe mi
rrorneur
ons
.By
pr
act
ici
ng t
he 7 pr
inci
ples
,we ar
espr
eadi
ng t
he happi
nes
sar
ound us
.

Happy Peopl
e ar
e mor
e s
ucces
sful
!'
(So, be happy not becaus
e
ever
ythi
ng i
sgood,butbecaus
e youcans
ee t
he good i
never
ythi
ng)
.

-
Shi
vangiDeor
a

23
I
NFLUENCEWI THOUTAUTHORI
TY
-Al
lanR.Cohen&DavidL.Br
adf
ord
The book
Inf
luence wi
thout Aut
hor
ity i
sa
cl
ass
ic wor
k by Al
lan R. Cohen & Davi
d L.
Br
adf
ord and i
t hi
ghl
ight
s on how t
o l
ead
peopl
e who don
trepor
tto you,how t
o bui
ld
ef
fect
ive r
elat
ions
hips and cr
eat
e al
li
es,and
how t
oinf
luence yourbos
s,peer
s,cl
ient
sand
ot
herpar
tner
s.

I
nthe f
irs
tchapt
eri
tsel
fthe aut
horhel
psusunder
stand whati
nfl
uence i
s
and how i
twor
kswonder
.He ver
ywel
les
tabl
ishest
he f
actt
hati
nfl
uence
i
saboutt
rades
,exchangi
ng s
omet
hing t
he ot
herval
uesi
nret
urnf
orwhat
one want
s.
Law ofReci
proci
tyr
efer
stot
he gi
ve and t
aker
elat
ions
hip
wher
ein one needs r
esour
ces t
hatot
herpeopl
e wants
othatone can
t
rade f
orwhatone want
s.The t
erm
exchange"pl
aysa gr
eatr
olei
nthe
moder
nwor
ld.I
nor
dert
oinf
luence a pot
ent
ialal
ly,one s
houl
d ver
ywel
l
know t
he ar
tofexchange t
hati
sthe ar
tofgi
ve and t
ake.

The conceptofcur
renci
esi
sver
yrel
evantand i
nter
est
ing t
o know,whi
ch
s
tandsf
ors
omet
hing t
hati
sval
ued can hel
p one det
ermi
ne whatone
mi
ghtof
fera pot
ent
ialal
lyi
n exchange f
orcooper
ati
on.I
trepr
esent
s
r
esour
ces t
hat can be exchanged,and ar
ethe bas
isf
or acqui
ring
i
nfl
uence.

The aut
hornextzoomsi
n on t
he anal
yti
calpr
oces
sofknowi
ng t
he con-
cer
ns,obj
ect
ives
,and s
tyl
esoft
he peopl
e one want
stoi
nfl
uence and i
s
f
undament
alf
ordet
ermi
ning whatt
o of
fert
o gai
ncooper
ati
on.The mor
e
one knowst
he bet
terone candet
ermi
ne val
ued cur
renci
es,t
he l
anguage
t
heys
peak
,and t
he s
tyl
einwhi
cht
heypr
efert
oint
eract
.

24
We ar
etheni
ntr
oduced t
othe
Dir
tySecr
etofPower
,whi
chr
efer
stot
he
i
dea t
hatwe have mor
eto our
sel
ves t
han we know.Ourabi
li
ty ort
he
powert
oinf
luence comes f
rom havi
ng acces
stor
esour
ces t
hatot
her
s
want
. One i
s pr
obabl
y mor
e power
ful t
han one t
hinks and car
eful
di
agnos
iscan r
evealt
he unt
apped r
esour
ceswi
thi
n,whi
ch t
hen can be
us
ed t
o gai
ninf
luence eveni
ndi
ffi
cul
tsi
tuat
ions
.

Rel
ati
ons
hipspl
ay a maj
orr
olei
ninf
luenci
ng.Devel
opi
ng a r
elat
ions
hip
wi
ths
omeone one knows i
s eas
y becaus
e ofs
imi
largoal
s,val
ues and
t
ast
esbuton t
he cont
rar
y devel
opi
ng a good r
elat
ions
hip wi
th peopl
e
wor
king i
n an or
gani
zat
ion i
sdi
ffi
cul
tbecaus
ethey ar
e notf
ami
li
arwi
th
youand t
hisi
ntur
nmak
esor
gani
zat
ionall
if
ecompl
ex,hencet
hiscal
lsf
or
adapt
ing t
othe wor
king s
tyl
e oft
he ot
herper
son.Cul
tur
e cr
eat
ess
tyl
e
t
oo.I
tisver
yimpor
tantf
orone t
oident
ifyone
sownpr
efer
red s
tyl
e and
cont
ras
tthatwi
tht
he pr
efer
encesoft
he per
sonone want
stoi
nfl
uence.

Subor
dinat
es can be di
ffi
cul
tto handl
e. An i
mpor
tant t
hing about
s
ubor
dinat
esi
sthatt
he gr
eat
ert
he t
alentand cr
eat
ivi
tyt
hey pos
ses
s,
t
hegr
eat
eri
sthel
ikel
ihood t
hatt
heywi
llhavei
dios
yncr
asi
est
hatcanbe
i
rri
tat
ing ordi
srupt
ive t
o ot
her
sint
he or
gani
zat
ion.One oft
he mos
t
power
fuli
nfl
uence t
oolavai
labl
eto manager
sisgi
ving devel
opment
al
f
eedbackt
othe s
ubor
dinat
es.
The f
irs
tthi
ng t
hati
sneeded wheni
tcomest
oleadi
ng a t
eam,t
askf
orce
orcommi
ttee i
sgai
ning commi
tment
.One oft
he chal
lengesf
orgai
ning
commi
tmenti
sfi
ndi
ng a wayt
o mak
ethe pr
ojects
eem mor
e at
tract
ive t
o
member
s.Ever
y memberneedst
ofeelt
hatherorhi
sideasar
e val
ued,
t
her
eisr
eas
onabl
e aut
onomyi
nday-
to-
daywor
k,and oppos
ing poi
ntof
vi
ew wi
llbe t
akens
eri
ous
ly.

The phr
ase
Ini
tiat
ing orLeadi
ng Maj
orChanges
meanst
hati
nfl
uence i
s
al
laboutmaki
ng a change,f
orwhi
ch devel
opi
ng a cl
earvi
sion ofwhat
25
Thechangehast
oaccompl
ish,i
nter
msofi
tsef
fect
soncus
tomer
sand cl
i-
ent
sisver
yimpor
tant
.Vi
sioni
sani
mpor
tantcur
rencyf
orat
tract
ing s
up-
por
tforchange.Many peopl
e wi
llr
espond mor
efavor
abl
yift
hey s
ee
whatonei
spus
hing,wi
llmak
ea gr
eatdi
ffer
encet
othecompany,cus
tom-
er
s,ort
he publ
ic.

Somet
imeswhen i
nfl
uenci
ng t
he per
son doesnotwor
koutbecaus
e he or
s
he i
sbei
ng r
esi
stant
,thenone cant
ryt
oinputani
mpl
ied t
hreatorcos
t
whi
chmi
ghtwor
koutwel
lforone t
o achi
eve a wi
n-wi
nout
come.I
tisus
u-
al
lya good s
trat
egyt
o appr
oacht
heot
herper
soni
nter
msoft
hebenef
it
i
nthe pr
opos
al,butt
hatmi
ghtnotbe enough,s
oitbecomesneces
sar
y
t
o expand t
he cur
renci
esand s
tyl
e one us
es.

-
Shi
kha Pandey

26
RI
CHDADPOORDAD
-Rober
tT.Ki
yos
aki
The books
tar
tsof
fby t
he aut
hors
tat
ing t
hat
he wasl
uck
y enough t
o have t
wo dadsi
n hi
s
l
if
e,a r
ichone and a poorone.Hi
sact
ualbi
o-
l
ogi
calf
ather was poor but hi
sfr
iend Mi
ke
s
f
atherdi
ed asoneofHawai
i
sri
ches
tmen.I
nhi
s
chi
ldhood he was advi
sed by bot
h t
hes
e
peopl
e and t
hey wer
e of
ten cont
radi
cti
ng i
n
nat
ure.
Forexampl
e -The poordad woul
dsay

Ican
taf
for
dit
.The r
ichone woul
dsay
How canIaf
for
dit
?The s
tar
k
di
ffer
encesi
nri
chand poorment
ali
tybecomescl
earear
lyoni
nthe book
.
Anot
hermaj
orconceptf
rom t
he booki
sthatofAs
set
sand Li
abi
li
ties
.The
aut
hors
ayst
hatt
he r
ichar
eri
chbecaus
etheyi
nves
tinas
set
s,wher
eas
t
hepoori
nves
tinl
iabi
li
ties
.Rober
tT.Ki
yos
aki
sdef
ini
tionofas
set
sand l
i-
abi
li
tiesi
sthatone addsmoney t
o yourpock
etwhi
let
he ot
herext
ract
s
moneyf
rom yourpock
et.Heal
so chal
lengest
henot
ionofpeopl
enor
mal
ly
maki
ng t
hei
rhi
ghes
tinves
tmenti
nthehous
ewhi
cht
heyl
ivei
n.I
tisi
nfact
al
iabi
li
tybecaus
eitdoesnotadd anyi
ncome,i
nst
ead i
tonl
ydemands
expens
es,and however
,a hous
e ear
ning r
enti
sanas
set
.The aut
horal
so
s
tres
sest
he i
mpor
tance off
inanci
all
iter
acy.
The hi
stor
y oft
axes i
sthen expl
ained and how t
he peopl
ethems
elves
vot
ed f
ort
he bi
rthofa compul
sor
ytax,whi
chhoweverended up havi
ng
t
hewr
ong ef
fectwher
ethepoorpai
dtaxesand t
her
ichwer
eabl
etoout
-
s
mar
tthe s
yst
em.The s
ecr
etoft
he r
ichi
sthe powerofcor
por
ati
ons
.The
r
ichmak
ejudi
ciousus
e oft
axesbecaus
e a cor
por
ati
onpayst
axesaf
ter
al
ltheexpens
eshavebeenaccount
ed f
or.Wher
eas
,a per
sons
pendsonl
y
af
terhe haspai
d al
lthe t
axes
.Becaus
e oft
his
.The r
ichof
ten f
allunder
al
owert
axbr
ack
et.

27
Theaut
hort
hent
alksabouta gamecal
led
CASHFLOW
,a gamet
obet
ter
t
eachf
inanci
all
iter
acy.A womanwho waspl
ayi
ng i
twass
ad wi
thherl
if
e
and t
hef
actt
hataf
terherdi
vor
ces
ett
lements
hegotpr
act
ical
lynot
hing.
She r
eal
ized t
hatt
hrough year
sofpoorf
inanci
aldeci
sions
,the coupl
e
had no as
set
s.Suchf
inanci
alpr
obl
emsar
esol
ved by peopl
ein mos
tly3
waysWor
khar
d,s
ave and bor
row.Whatpeopl
efai
lto do i
stot
hinkof
t
hispr
obl
em s
olvi
ng i
na cr
eat
ivemanner
.Theydonotevenat
temptt
oim-
agi
nea s
olut
ionot
hert
hant
he3gi
venopt
ions
.Thes
esol
uti
onscomef
rom
f
inanci
ali
ntel
li
gence and t
hatcomesf
rom f
ourmaj
ort
echni
cals
kil
ls:
1.Account
ing
2.I
nves
ting
3.Under
standi
ng Mar
ket
s
4.The l
aw
Nextcomest
he i
mpor
tance ofl
ear
ning and l
ear
ning t
osel
l.Rober
tT.Ki
-
yos
akis
ays t
hat he i
sa
bes
t-s
ell
ing aut
hor
and not a
bes
t-wr
iti
ng
aut
hor
.He as
kspeopl
etol
ear
ntos
elland emphas
izesi
tsi
mpor
tance i
n
becomi
ng s
ucces
sful
.He t
alksabouthi
svar
ying exper
ienceswi
thhi
sri
ch
dad and poordad.Ever
yti
me he gott
oo good ata j
ob,he woul
dleave
t
o do s
omet
hing new and s
omet
hing t
hatwoul
dfur
therenhance hi
slear
n-
i
ng.Hi
spoordad det
est
ed hi
smove ever
yti
me butr
ich dad pr
ais
ed i
t.
Each t
ime he changed j
obshe l
ear
ned s
omet
hing val
uabl
e and t
he s
um
t
otalofal
lsuchexper
ienceshel
ped hi
m whenhe f
ormed hi
sowncompany.
I
nspi
te ofal
lthe knowl
edge i
nthe wor
ld,a f
inanci
all
yli
ter
atei
ndi
vidual
i
sof
tennotabl
eto have enoughas
set
smai
nlybecaus
e off
ive r
eas
ons
1.Fear
2.Cyni
cis
m
3.Lazi
nes
s
4.Bad habi
ts
5.Ar
rogance
Over
comi
ng t
hes
e obs
tacl
escan mak
e one s
ucces
sful
.The aut
horal
so
ment
ionsot
hert
ipst
o gets
tar
ted ont
he wayt
osucces
s.
28
Ont
he whol
e,Ir
eal
lyl
iked t
he book
.Excer
ptsf
rom t
he aut
hor
sl
if
e mak
e
i
ta ver
yint
eres
ting r
ead.
-
Sar
ves
hPoddar

Thi
sbookgi
vesan i
nsi
ghti
ntot
he mi
ndsofr
ich peopl
e.The cr
uxoft
he
aut
hor
smes
sage i
sTo notwor
kformoneybutmak
e moneywor
kforyou.
.
I
nsi
mpl
ewor
dsi
fwewantt
o pr
osper
,weneed t
o mak
esur
ethatourdai
ly
expens
esar
e metby ouri
nves
tment
sand notwagesorbus
ines
spr
ofi
ts.
Thi
s wi
llhel
p us t
o choos
eaj
ob accor
ding t
o our apt
itude wi
thout
wor
ryi
ng aboutt
he pays
cal
e.Thenwe canwor
ktol
ear
nand notwor
kto
ear
n.To s
uppor
tthi
s ar
gumenthe gave t
he exampl
e ofRay Kr
oc,t
he
f
ounder ofMcDonal
ds whos
e mai
n bus
ines
s was r
eales
tat
e and not
s
ell
ing bur
ger
s.He boughtr
evenue gener
ati
ng r
eales
tat
eint
he bes
t
s
treet
sand cor
ner
soft
he wor
ld.I
nfactatone poi
nti
nti
me Mc .
Donal
ds
had mor
ereales
tat
ethant
he chur
ch.
Thes
econd mos
timpor
tantmes
sagewhi
chs
tood outwas
,To payyour
sel
f
f
irs
t,bef
ore you pay ot
her
s.Thi
sisa t
ough one t
o mas
terbecaus
eit
i
nvol
vesa cer
tai
n degr
ee ofr
isk
.Thi
smeanst
hatyou t
rans
fera cer
tai
n
amountt
o youras
setcol
umn bef
ore gi
ving i
tto yourcr
edi
tor
s.I
fin any
cas
ethe bal
anci
ng amountf
all
sshor
tofyourl
iabi
li
ties(
inmos
tcas
esi
t
does
),i
twi
llf
orce you and putyou underpr
ess
uret
olear
nsome new
t
ricksoft
he t
rade i
.e.new wayst
o ear
nmoney.
Thi
rdl
ythe aut
horal
sot
alk
ed aboutmaki
ng s
ure we devel
oped a s
ens
e
ofs
elfdi
sci
pli
ne.Thi
sisver
yimpor
tanti
fone want
sto become r
ich.We
need t
o cont
rolourexpens
es.I
tis mor
e about s
pendi
ng i
ntel
li
gent
ly
r
athert
han ear
ning mor
e(whi
chi
sal
soi
mpor
tant
).Ast
he aut
horment
ions
r
epeat
edl
yin hi
snovel
,We mak
e pr
ofi
tswhen we buy and notwhen we
s
ell
.Howevert
he mos
timpor
tant t
ake away f
orme was t
he need f
or
f
inanci
aleducat
ion.I
fonehasgotcompl
eteknowl
edgeaboutt
axes
,law,
account
ing and t
he f
unct
ioni
ng ofmar
ket
s,l
if
e becomesver
y eas
y.The
r
eas
onwhyhi
ghl
yeducat
ed peopl
e end up havi
ng f
inanci
aldi
ffi
cul
ties
29
i
nthei
rli
fei
ssi
mpl
ybecaus
eoft
hef
actt
hatt
heydo notknow how money
wor
ks.A good exampl
e woul
d be t
he way t
he aut
horboughtr
eales
tat
e
t
ofi
nance a col
lege educat
ionf
und f
orhi
sfr
iend
schi
ldr
en.He boughta
hous
efor$79000 af
ternegot
iat
ing buthad t
o pay onl
y $7000 becaus
e
t
he exi
sti
ng owner al
ready had dues wor
th $72000 pendi
ng. Af
ter
cl
ear
ing t
he mor
tgage,he r
ent
ed t
he hous
e and s
tar
ted ear
ning a s
mal
l
s
um asr
ent
ali
ncome.Af
ters
ome t
ime t
he t
enantof
fer
ed t
o buyt
he hous
e
f
oranamountof$156000.
So he r
eadi
lyaccept
ed and boughta cos
tli
er
hous
efr
om t
he s
ale pr
oceeds
.Int
he US,i
fone buysa cos
tli
erpr
oper
ty
af
ters
ell
ing a pr
evi
ousone,heget
sa t
axexempt
ionont
hecapi
talgai
ns.
Hence he us
ed t
hist
axl
aw t
o hi
sadvant
age and l
ateron he r
epeat
ed
t
he s
ame pr
oces
s by s
ell
ing t
he newl
y acqui
red hous
efor $330000
(
bes
ides ear
ning r
ent
ali
ncome on t
he s
ame)
.Ther
efor
e he f
inal
ly had
enough t
o meet hi
sini
tial r
equi
rement of $400000 f
or t
he col
lege
educat
ionf
und ofhi
sfr
iend
schi
ldr
en.
Las
tlyt
her
eisa hi
ddenmes
sage f
ort
he r
eader
swhi
chver
yfew s
ucceed
i
ndeci
pher
ing.Accor
ding t
othe aut
horf
inanci
aleducat
ioni
simpor
tant
f
orever
yhumanbei
ng,no mat
terwhi
chf
iel
d youar
ein.Ther
efor
e peopl
e
who ar
e 16-
17 year
sofage and cannotdeci
de whi
chf
iel
dtheywantt
o
geti
nto can t
akear
isk wi
tht
hei
rchoi
ces i
fthey educat
ethems
elves
f
inanci
all
y.Fori
nst
ance i
fa s
por
tsper
son want
stof
oll
ow hi
spas
sion but
i
saf
rai
d off
ail
ing t
o ear
nenoughf
orhi
msel
fint
hef
utur
ehecaneducat
e
hi
msel
ffi
nanci
all
yand havea s
ecur
esour
ceofi
ncomecomi
ng t
hroughhi
s
as
setcol
umn.Ther
efor
e he can f
oll
ow hi
s pas
sion f
reel
y wi
thoutbei
ng
af
rai
d off
inances
.
-
JigarRaj
ani

I
twasa bookwhi
chopened my mi
nd i
n var
iousways
,the mos
timpor
tant
t
hinkwhi
cht
hisbookt
eachesusi
sto as
kyourmi
nd ques
tionwhi
chf
orces
yout
othi
nk
how canIaf
for
dit
rat
hert
han
Icannotaf
for
dit
.Her
e ar
e
s
ome i
mpor
tanti
nsi
ght
swhi
chIl
ear
ntf
rom t
hisbook:
30
Ther
eisa bi
g di
ffer
encebet
weenbei
ng br
okeand bei
ng poor
,br
okei
s
t
empor
arybutpoori
set
ernal
.
The poorand mi
ddl
e cl
asswor
kformoney,moneywor
kfort
he r
ich.
Ourl
ivesar
e cont
rol
led byt
wo emot
ionsFearand Gr
eed.
We s
houl
d notl
etmoneyr
unourl
if
e.
Lear
nto us
e you emot
ions t
othi
nk r
ather t
han t
hinki
ng wi
th your
emot
ions
.
I
tsnothow muchmoneyyoumak
eit
sabouthow muchmoneyyouk
eep
Anas
setput
smoneyi
nmypock
etwher
easa l
iabi
li
typut
smoneyoutof
mypock
et.
Accor
ding t
oa J
apanes
e pr
over
b,t
her
e ar
ethr
ee power
sSwor
d,j
ewel
and mi
rror
.Swor
dsymbol
izesweapon,mi
rrors
tandsf
ors
elf
-knowl
edgeand
j
eweli
smoney.One who hast
he gol
d mak
est
he r
ule.
Weal
thi
sa per
sonabi
li
tyt
osur
vive,i
fhes
topswor
king t
odayhow many
dayshe cans
urvi
ve.
The Ri
ch f
ocus on t
hei
ras
set
s,whi
le ever
yone el
sef
ocus
es on t
hei
r
i
ncome s
tat
ement
s.

As
set
sthatone s
houl
d acqui
re:
-
1.Bus
ines
sthatdoesnotr
equi
re ourpr
esence
2.St
ocks
3.Bonds
4.I
ncome gener
ati
ng r
eals
tat
e
5.Anyt
hing el
set
hathasa val
ue ,pr
oducesi
ncome ,appr
eci
atesover
t
ime
We s
houl
d us
e cor
por
ati
onst
o evade t
axes
.A f
inance wi
zar
disone who
i
sthe mas
teroft
hes
efourt
hingsAccount
ing,I
nves
ting,Under
standi
ng
Mar
ket
s,The l
aw.One needst
o be bol
dto gethead and nots
mar
t.The
s
ingl
e mos
tpower
fulas
sett
hatwe al
lhave i
sourmi
nd,whi
ch i
ftr
ained
wel
lcangener
ate enor
mousamount
sofweal
th.
I
tisnotgambl
ing i
fwe know whatwe ar
e doi
ng,gambl
ing i
sthr
owi
ng
31
moneyi
na dealand pr
ayi
ng.
Gr
eatoppor
tuni
tiesar
e nots
eenwi
thyoureyes
,theyar
eseenwi
thyou
mi
nd.
We wantt
o know a l
itt
le abouta l
ot
Be a j
ackofal
ltr
adesbutmas
terofnone.
Be a l
itt
le gr
eedyt
o over
come l
azi
nes
s
Pr
ofi
tsar
e made i
nbuyi
ng and nots
ell
ing.
Iwoul
dli
ket
o concl
ude wi
th

Fai
lur
eIns
pir
esWi
nner
s,Fai
lur
esdef
eatLos
ers

-
Ashwi
nBans
al

32
THEBL
ACKSWAN
-Nass
imNi
chol
asT
aleb
Bl
ack s
wan r
efer
sto an ext
remel
yimpr
obabl
e
event
, hi
ghl
y unpr
edi
ctabl
e, wi
th a mas
sive
i
mpacton i
tsenvi
ronment
,one woul
d devel
op
and devi
se expl
anat
ions onl
y af
ter i
ts
occur
rence,whi
ch woul
d mak
eitl
essr
andom
and mor
e pr
edi
ctabl
ethani
twas
.
Two ki
nd of r
andomnes
s i
s r
eser
ved f
or
s
ituat
ions ar
isi
ng i
n Medi
ocr
itan (
the l
and of
t
hemedi
ocr
e),and t
ype2 f
ort
hos
ear
isi
ng i
nExt
remi
stan(
thel
and oft
he
ext
reme)
We concent
rat
e on t
hingswe al
ready know and t
ime and t
ime agai
nfai
l
t
otak
eint
o cons
ider
ati
onwhatwe don'
tknow.We ar
e,t
her
efor
e,unabl
e
t
otr
uly es
timat
e oppor
tuni
ties
,too vul
ner
abl
etot
he i
mpul
set
osi
mpl
if
y,
nar
rat
e,and cat
egor
ize,and notopen enough t
orewar
ding t
hos
e who
cani
magi
ne t
he "
impos
sibl
e."
We f
oolour
sel
vesi
ntot
hinki
ng we know mor
ethan we act
ual
ly do.We
r
est
rictourt
hinki
ng t
othe i
rrel
evantand i
ncons
equent
ial
,whi
lel
arge
event
scont
inue t
osur
pri
se usand s
hape ourwor
ld.
The i
dea oft
he Bl
ackSwanr
efer
stot
he f
actt
hat
,pr
iort
othe di
scover
y
ofAus
tral
ia,i
twasas
sumed t
hatal
lswanswer
e whi
te,becaus
e no one
(
wel
l,no Eur
opeanatl
eas
t)had evers
eena bl
acks
wan.
However
,theydo exi
st.
Thebook
,a
blacks
wanr
efer
sto anyeventt
hati
srar
e,(
Recent
lyDemon-
et
izat
ion)whi
chhad anext
remei
mpact
,inourcount
ryand i
sexpl
ainabl
e
and pr
edi
ctabl
e - but onl
yin hi
nds
ight
.Ther
eisa t
endency t
o gi
ve
expl
anat
ions t
o l
argel
yrandom s
ucces
ses or f
ail
ures af
ter t
he f
act
.
Peopl
esi
gni
fi
cant
ly under
est
imat
ethe s
igni
fi
cance of ext
reme event
s
when cons
ider
ing t
he f
utur
e.
Black Swans
ar
ethes
e ext
reme event
s.

33
Pr
edi
cti
ng t
hef
utur
eis
,inmanycas
es,i
mpos
sibl
e,r
areevent
soccurmuch
mor
e of
tent
hanwe expect
.Ourmi
ndsar
e pr
ogr
ammed t
o dealwi
thwhat
we
ves
eenbef
ore,t
oexpectt
heexpect
ed
,sot
ospeak
.However
,al
ltoo
of
ten ext
reme event
sdo i
ndeed t
ake pl
ace,and have l
arge,and l
ong
l
ast
ing ef
fect
s,ourt
endency t
o di
scar
drar
e event
s happens i
n par
t
becaus
e peopl
e under
est
imat
ethei
rignor
ance.Ther
eisa gr
eatdealwe
don
tknow,buts
ince f
eel
ing i
gnor
anti
sn
tpl
eas
ant
,we t
end t
o puti
tout
ofourmi
nds
,we t
end t
oinvents
tor
ieswher
ether
e ar
e none.
I
not
herwor
ds,af
tert
hef
act
,wel
iket
oinventexpl
anat
ionsf
orwhyt
hings
happened t
he way t
hey di
d,whi
ch i
smuch mor
e comf
ort
ing t
han s
tar
ing
ats
heerr
andomnes
s.Rar
e and i
mpr
obabl
e event
s do occurmuch mor
e
t
hanwedar
etot
hink
.Ourt
hinki
ng us
ual
lyi
sli
mit
ed i
nscopeand wemak
e
as
sumpt
ionsbas
ed on whatwe s
ee and know.Real
ity,however
,ismuch
mor
e compl
icat
ed and unpr
edi
ctabl
ethan we t
hink
.Al
so,as
sumpt
ions
r
elevantt
o aver
age s
ituat
ionsar
eles
srel
evantt
oir
regul
ars
ituat
ions
,
es
peci
all
y when t
he "
rul
es of t
he game" t
hems
elves change.Ext
reme
event
sdo happenand have a gr
eatef
fect
.
The ef
fect
sofext
reme event
sar
e even hi
gherdue t
othe f
actt
hatt
hey
ar
e unexpect
ed, we can s
omewhat t
ake i
nto account
ear
thquak
es,
bl
ockbus
terbooks
,st
ockmar
ketcr
ashes
butf
orwhi
ch i
tisnotpos
sibl
e
t
o compl
etel
y f
igur
e out t
hei
r pr
oper
ties and pr
oduce pr
eci
se
cal
cul
ati
ons
.Banksand t
radi
ng f
irmsar
e ver
y vul
ner
abl
eto hazar
dous
Bl
ack Swan event
s and ar
e expos
ed t
olos
ses beyond t
hos
ethatar
e
pr
edi
cted by t
hei
rdef
ect
ive f
inanci
almodel
s,t
he mai
nidea i
n booki
s
nott
o at
temptt
o pr
edi
ctBl
ackSwan event
s,butt
o bui
ldr
obus
tnes
sto
negat
ive onest
hatoccurand t
o be abl
eto expl
oitpos
iti
ve ones
.Us
ing
as
impl
e exampl
e,whatmaybe a Bl
ackSwans
urpr
isef
ort
he banksi
snot
a Bl
ackSwans
urpr
isef
orMal
li
ya
ssonhence t
he obj
ect
ive s
houl
d be t
o
"
avoi
d bei
ng a bank"byi
dent
ifyi
ng ar
easofvul
ner
abi
li
tyi
nor
dert
o"t
urn
t
he Bl
ackSwanswhi
te"
.
St
op t
ryi
ng t
o pr
edi
ctever
ythi
ng and t
ake advant
age ofUncert
ainty.
-
SaketJhunjhunwala
34
F
REAKONOMI CS
-
StevenD.L
evit
tandSt
ephenJ
.Dubner
Jour
nal
istSt
evenLevi
ttand economi
stSt
ephen
Dubner have an i
nnovat
ive appr
oach t
o
economi
cs.Ci
ting s
tudi
esby a wi
de var
iet
y of
r
esear
cher
s,t
heyar
guet
hats
tandar
dized t
est
s
gi
ve t
eacher
sincent
ive t
o cheat
,thatt
he KKK
i
sn'
treal
lyaspower
fulasi
tsaysi
tis
,and t
hat
t
her
e'sa di
rectcor
rel
ati
on bet
ween l
egal
ized
abor
tion and l
ower cr
ime r
ates
. Levi
tt and
Dubner mak
e s
urpr
isi
ng connect
ions bet
ween s
umo-
wres
tler
s and
t
eacher
s,t
heKKKand r
eales
tat
eagent
s,and ot
herunexpect
ed pai
rings
t
oshow how economi
stscan us
est
ati
sti
cst
o expl
aini
nter
est
ing s
oci
al
phenomena.Per
hapst
he mos
tcul
tur
all
yrel
evantpoi
ntLevi
ttand Dubner
mak
eint
he booki
sthatt
he decr
eas
ing cr
ime r
atesoft
he 1990scanbe
t
raced back t
o Roev.Wade,t
he Supr
eme Cour
t cas
ethat l
egal
ized
abor
tion.Fewerunwant
ed chi
ldr
enl
eadst
ofewercr
imi
nal
s.Us
ing year
sof
educat
ion s
tat
ist
ics
,they concl
ude t
hat s
tudent
s who ar
e dr
iven t
o
s
ucceed wi
lldo s
oregar
dles
soft
he s
choolt
heyat
tend.
WhatDo School
teacher
sand Sumo Wr
est
ler
sHave i
nCommon?
The f
irs
t chapt
er mai
nlyt
alks about et
hics and how s
ituat
ions caus
e
peopl
eto cheati
nli
fe.I
nthe ear
ly 2000 t
he Uni
ted St
atess
tar
ted i
ts

leave no chi
ld behi
ndpol
icy whi
ch adver
sel
y bl
amed t
he t
eacher
sfor
t
he poorper
for
mance oft
he ki
dsi
nthei
rst
andar
dized t
est
s.Asa r
esul
t,
t
hes
eteacher
sst
art
ed t
wit
chi
ng and changi
ng t
he ans
wers
heet
soft
he
chi
ldr
en t
o avoi
d puni
shment
.Thi
siscompar
ed t
othe et
hicaldi
lemma i
n
t
he wor
ld ofs
umo wr
est
ling wher
eas
umo wr
est
lerpar
tici
pat
es i
nthe
bet
ting pr
oces
sso ast
o mak
ethe out
come ofa t
our
namenta bi
tmor
e
i
nter
est
ing.The Ku Kl
uxKl
an wasa gr
oup whos
e powermuch l
iket
hatof
pol
iti
ciansorr
eales
tat
e agent
sors
tockbr
oker
swasder
ived i
nlar
ge

35
par
tfr
om t
hef
actt
hati
thoar
ded i
nfor
mat
ion.Oncet
hati
nfor
mat
ionf
all
s
i
ntot
hewr
ong handsmuchoft
hegr
oup
sadvant
agedi
sappear
s.And t
his
i
sexact
ly whatSt
ets
on Kennedy di
d and s
inge handedl
y accompl
ished
whatno j
our
nal
ist
,orpr
osecut
orcoul
d.I
tisver
ymuchs
imi
lart
o whatt
he
I
nter
net has accompl
ished what no cons
umer advocat
e coul
d:i
t has
vas
tlys
hrunkt
he gap bet
weent
he exper
tsand t
he publ
ic.
WhyDo Dr
ug Deal
ersSt
illLi
ve wi
thThei
rMoms
?
Thi
s chapt
er begi
ns by expl
aini
ng t
he phr
ase"
convent
ionalwi
sdom,
"
whi
ch economi
stJohn Kennet
h Gal
brai
th des
cri
bes as i
nfor
mat
ion t
hat
r
einf
orcesa per
son'
sowni
nter
est
sand wel
l-bei
ng.Thi
smeanst
hat
,whi
le
convent
ionalwi
sdom mus
t be comf
ort
ing and conveni
ent
,it does not
neces
sar
ilyneed t
o bet
rue.Des
pit
ethi
s,t
hough,i
tisof
tendi
ffi
cul
tto get
peopl
eto doubtconvent
ionalwi
sdom.Levi
ttt
hen s
pendst
he r
estoft
he
chapt
erdi
sput
ing onepar
ticul
arpoi
ntofconvent
ionalwi
sdom:t
hatdr
ug
deal
ing,par
ticul
arl
y cr
ackdeal
ing,i
sone oft
he mos
tpr
ofi
tabl
ejobsi
n
Amer
ica.He det
ail
sthe f
actt
hateven t
hough t
his mi
ghtbe t
rue,i
tis
us
ual
lyt
he peopl
e hi
gherup i
nthe hi
erar
chywho ear
nmos
toft
he money
wher
east
he bot
tom br
anch ar
ejus
tlef
twi
th cr
umbst
ofeed on.Buti
tis
t
he dr
eam t
o one day r
each t
he t
op oft
he chai
nthatmot
ivat
est
hes
e
s
mal
lerl
eveldeal
erst
otak
eint
he addi
tionalr
iskand s
tay i
nthe game
ofdr
ug deal
ing.I
thi
ghl
ight
sa ver
ybas
ict
heor
yofeconomi
cst
hatwhen
t
her
e ar
ea l
otofpeopl
e wi
ll
ing and abl
eto do a j
ob,t
hatj
ob gener
all
y
does
ntpaywel
l.
Wher
e Have Al
lthe Cr
imi
nal
sGone?
Levi
tt expands on t
he cr
ime and abor
tion cor
rel
ati
on pr
evi
ous
ly
di
scus
sed i
nthebook'
sint
roduct
ion.Hes
tar
tswi
tha cas
est
udyonRoma-
ni
a.WhenNi
col
aeCeaus
escubecamet
hecommuni
stdi
ctat
orofRomani
a,
he made abor
tion i
ll
egal
.The ai
m wast
o boos
tRomani
a'spopul
ati
on i
n
or
dert
ost
rengt
hent
he nat
ion.Thi
sactl
ead t
o anexponent
iali
ncr
eas
e
i
nthe numberofchi
ldr
en bor
nin pover
ty and i
nfami
li
es wi
tha l
ower
educat
ion backgr
ound.Al
loft
hisl
ead t
o a dr
ast
ici
ncr
eas
ein vi
olence
36
and hat
red agai
nthe di
ctat
or.Ofal
lthe Communi
stl
eader
sdepos
ed i
n
t
he year
s br
ack
eti
ng t
he col
laps
e of t
he Sovi
et Uni
on,onl
y Ni
col
ae
Ceaus
escu met a vi
olent deat
h.I
tshoul
d not be over
look
ed t
hat hi
s
demi
se wast
rigger
ed i
nlar
ge meas
ure byt
he yout
hofRomani
aa gr
eat
numberofwhom,wer
eitnotf
orhi
sabor
tionban,woul
d neverhave been
bor
natal
l.Thi
sir
oni
cals
ituat
ioni
scompar
ed t
othatoft
heUni
ted St
ates
wher
ethe cr
ime r
atesf
elldr
ast
ical
lydue t
othe l
egal
izat
ionofabor
tion.
Had t
hes
e chi
ldr
en been bor
n,t
hey woul
d have been 50 per
centmor
e
l
ikel
ytol
ive i
npover
tyand t
husext
remel
yli
kel
yto have a cr
imi
nalf
utur
e.
WhatMak
esa Per
fectPar
ent
?
I
nthi
schapt
erLevi
ttpr
esent
ssi
xteenvar
iabl
est
est
ed byt
he ECLS.Ei
ght
oft
hes
e ar
est
rongl
ycor
rel
ated wi
ths
ucces
sins
chool
,ei
therpos
iti
ve or
negat
ive,and ei
ghthave l
itt
ler
elat
ions
hip wi
thacademi
csucces
satal
l.
The f
act
orst
hatmat
terar
ethe par
ent
s'educat
ion l
evel
,soci
oeconomi
c
s
tat
us,age,l
anguage s
pok
enathome,i
nvol
vementi
nthe PTA,t
he chi
ld'
s
bi
rth wei
ght
,whet
herornott
he chi
ld wasadopt
ed,and whet
herornot
t
her
e ar
e many booksi
nthe home.Conver
sel
y,t
he mak
eup oft
he chi
ld'
s
f
ami
ly,a move t
o a bet
ter nei
ghbor
hood,whet
her or not t
he mot
her
s
tayed home f
rom wor
k,whet
herornott
he chi
ld at
tended Head St
art
,
whet
herornott
he chi
ldi
sspank
ed orwat
chest
elevi
sion,and whet
heror
nott
he par
ent
sread t
othe chi
ld al
lhad l
itt
le-
to-
no ef
fect
.Al
loft
his
s
ugges
tst
hatmos
toft
he t
hingst
hatmat
teri
npar
ent
ing ar
e det
ermi
ned
even bef
oret
he chi
ldi
sbor
n.I
tismor
e aboutt
he ci
rcums
tancest
hata
chi
ldi
sbor
nint
o,r
athert
han anyt
hing s
peci
fi
cthe par
ent
sdo.Par
ent
s
whoar
ewel
leducat
ed,s
ucces
sful
,and heal
thyt
end t
ohavechi
ldr
enwho
t
estwel
lins
chool
.Par
ent
smat
tera gr
eatdeal
butnoti
nthe wayst
hat
mos
tpeopl
ethi
nk.
Per
fectPar
ent
ing,Par
tII
;or
:Woul
d a Ros
handa byAnyOt
herName Smel
l
asSweet
?
Fi
nal
lyt
he l
astchapt
ert
alksaboutt
he i
mpor
tance oft
he name gi
vent
o
a chi
ld byhi
s/herpar
entand whati
mpactdoesi
thaveont
hechi
ld
sli
fe.
37
The Cal
if
orni
a names dat
a s
ugges
tthat an over
whel
ming number of
par
ent
sus
e a name t
osi
gnalt
hei
rown expect
ati
onsofhow s
ucces
sful
t
hei
rchi
ldr
enwi
llbe.Wi
thi
ntwent
yyear
s,near
lyever
ysi
ngl
enameont
he
t
op namepopul
ari
tyl
ist
spr
ovi
ded haschanged.Thedat
a al
sor
eveal
sa
pat
ter
n:names cat
ch on among hi
gh-
income,hi
ghl
y educat
ed par
ent
s
f
irs
t,and t
hen s
tar
twor
king t
hei
rway down t
he s
oci
oeconomi
cladder
.
Levi
tt pos
tul
ates t
hat par
ent
s,whet
hert
hey r
eal
ize i
t ornot
,li
ket
he
s
ound ofnamest
hats
ound "
succes
sful
."The name i
sn
tli
kel
yto mak
ea
s
har
d ofdi
ffer
ence.Butt
he par
ent
scanatl
eas
tfeelbet
terknowi
ng t
hat
,
f
rom t
he ver
yout
set
,theyt
ried t
hei
rbes
t.
Thi
sbooki
ndeed hasno uni
fyi
ng t
heme.I
thast
o do wi
tht
hinki
ng s
ens
ibl
y
about how peopl
e behave i
nthe r
ealwor
ld.You mi
ght become mor
e
s
kept
icaloft
he convent
ionalwi
sdom oryou may begi
nlooki
ng f
orhi
nts
as t
o how t
hings ar
en
tqui
te whatt
hey s
eem.The mos
tli
kel
yres
ultof
havi
ng r
ead t
his book i
sthat you may nd your
sel
f as
king a l
ot of
ques
tions
.Many of t
hem wi
lll
ead t
o not
hing.But s
ome wi
llpr
oduce
ans
wer
sthatar
eint
eres
ting,evens
urpr
isi
ng.
-
Chi
rag Popat

38
THEBI
G SHORT
-
MichaelL
ewi
s
The Bi
g Shor
t:I
nsi
de t
he Dooms
day Machi
ne
wr
itt
en by Mi
chaelLewi
s.I
tisnotonl
ythe one
amongs
tthe bes
tsel
li
ng bookof2010 butal
so
as
ever
alawar
d wi
nni
ng book
.Itgotr
eleas
eon
15 mar
ch 2010.Publ
ishername W.W.Nor
ton &
Company.I
tis a non-
fict
ional
,fi
nanci
albook
bas
ed on t
he 2008 cr
edi
t cr
isi
s or hous
ing
bubbl
e bur
sti
ng ofUS economy.Name oft
he
booki
sbi
gshor
tbecaus
e bef
ore a cr
edi
tcr
isi
smaj
ori
tyofpeopl
e wer
e
t
hinki
ng t
hateconomyi
swor
king wel
land wher
eopt
imi
staboutt
hemar
ket
butver
yfew peopl
ewer
ebel
ievi
ng t
hati
tisanover
pri
cemar
ketand wi
ll
bur
sti
nfut
ure.So t
heyt
ooka s
hor
tpos
iti
oni
nmar
ket
,inot
herwor
dst
hey
t
raded i
nsecur
iti
eswer
e one gai
nwhenpr
ice dr
opsi
nst
ead ofr
ise.That
bi
gri
skt
aki
ng ofver
yfew br
oker
sgave t
hem hi
ghr
etur
n.

I
nthe s
tar
ting of t
he book al
lthi
ng was wor
king f
ine i
ncl
udi
ng US
economy,i
nves
tor
,pot
ent
ial i
nves
tor and gener
al publ
ic.Mi
ll
ions of
peopl
e and banksenj
oyed t
he benef
itofs
o cal
led f
inanci
alengi
neer
ing
i
nst
rument cal
led Col
lat
eri
ze debt obl
igat
ion (
CDO) or s
ubpr
ime
mor
tgage bond.Wi
tht
he hel
p oft
hist
ype ofbond,home l
oan i
n US
became ver
y cheap wi
thl
ess col
lat
eral
.The s
ubpr
ime mor
tgage bond
mar
ket t
hat had been cr
eat
ed dur
ing t
he 1990s got even mor
e
compl
icat
ed wi
thpas
sing t
imeand i
ncr
eas
ing numberofbankl
oan.Thes
e
t
ypeofi
nst
rument
swer
edes
igned t
o hel
pspr
ead t
her
iskas
soci
ated wi
th
s
ubpr
ime mor
tgage bonds
, but becaus
e t
hey wer
e not car
eful
ly
pack
aged,as
ses
sed,ormanaged,t
hey ended up br
ingi
ng t
he ent
ire
s
yst
em down.
The i
nst
rument
sfunct
ioned exact
ly t
he way t
hey wer
e
s
uppos
ed t
o,butt
he pl
ayer
son Wal
lSt
reetqui
ckl
yfi
gur
ed outhow t
o

39
wer
esuddenl
y becomi
ng par
t oft
he por
tfol
io behi
nd t
he mi
ll
ions of
aver
age peopl
e.Thes
e bondswer
e bei
ng s
oldl
iket
hey wer
esaf
e bet
s
whent
heywer
e,i
nfact
,ext
remel
yri
sky.
Books
howed t
heot
hers
ideoft
hecoi
n:t
hes
hor
ts(
thef
utur
esel
ler
).Gr
eg
Li
ppmann,St
eve Ei
sman,Mi
chaelBur
ryand t
he guysatCor
nwal
lCapi
tal
s
aw t
hes
e cur
ioust
hingsasi
nst
rument
sofdes
truct
ion.They dug deepl
y
i
ntot
he bondst
hatt
he ent
ires
yst
em wasbui
ltuponand di
scover
ed t
hat
t
her
e wer
eser
ious di
ffer
ences bet
ween t
he di
ffer
ent
,suppos
edl
ysaf
e,
s
ubpr
ime mor
tgage bonds
.They s
tar
ted bet
ting t
hatt
he
saf
ebonds
woul
d go bad,becaus
ethes
e men s
aw t
her
e wasno ot
heropt
ion.Les
s
t
han 20 t
rader
swoul
d ul
timat
ely go s
hor
ton s
ubpr
ime mor
tgage bonds
evenbankst
hats
houl
d have knownbet
terwer
elong s
ubpr
ime mor
tgages
whent
he mar
ketcol
laps
ed.The s
yst
em had beenr
igged,i
twascl
ear
,but
even wi
th at
tempt
stok
eep t
he val
ues of s
ubpr
ime mor
tgage bonds
ar
tif
ici
all
y hi
gh,val
ues col
laps
ed.
Des
pit
etr
oubl
es wi
thi
nves
tor
s who
ques
tioned t
hes
hor
tpos
iti
ons
,themenwho s
aw val
uei
nthes
hor
tsi
deof
t
he s
ubpr
ime mor
tgage bondscame outon t
op oft
he f
inanci
alchaos
.
Theymadehugeamount
sofmoneyf
ort
hei
rinves
tor
s,al
lwhi
let
hemar
ket
s
wer
etear
ing t
hems
elvesapar
t.Theyf
elthor
ribl
ethatt
he f
inanci
alwor
ld
had t
o col
laps
efort
hem t
o be pr
ovenr
ight
,butt
heyal
so acknowl
edged
t
hatt
he i
nfor
mat
ion wast
her
eforanyone t
osee.St
eve Ei
sman made a
habi
toft
ell
ing ever
yonehes
aw t
hatt
hes
ubpr
imemor
tgagemachi
newas
headed of
fa cl
if
f.
Thi
sbooki
sa s
eri
esofs
tor
iesoft
he s
hor
ts,and t
he
peopl
e who t
hey af
fect
ed.Lewi
snar
rat
est
he s
ubpr
ime mor
tgage wor
ld
t
hatexi
sted i
nthe 2000sand unt
ilt
he col
laps
ethr
ough t
he eyesofhi
s
chos
ent
rader
s.Thei
rper
sonals
tor
iesar
etol
d aswel
l,and i
tiscl
earf
rom
t
he t
ell
ing t
hatt
hey s
aw t
he f
lawsi
nthe s
yst
em becaus
e each wasan
out
sideri
nsome way.Over
allt
hisbooki
sver
yint
eres
ting t
o peopl
e who
hasi
nter
esti
n economy and f
inanci
almar
ketwor
ld butmay s
ound l
itt
le
bor
ing t
o t
hos
e who has no i
dea about mar
ket
s becaus
e of l
ot of
f
inanci
alj
argonus
ed i
nthe book
. -
VineetAgar
wal
40
SWIM WI
THTHESHARKSWITHOUT
BEI
NG EATEN AL
IVE -
Har
veyMacKay
Har
vey MacKay gr
aduat
ed f
rom bot
h t
he
Uni
ver
sit
y of Mi
nnes
ota and t
he St
anf
ord
Uni
ver
sit
y SchoolofBus
ines
s.I
n 1959,att
he
age of 26, he pur
chas
ed a s
mal
l,f
ail
ing
Envel
ope Company and t
urned i
tint
o Mack
ay
Mi
tchel
l Envel
ope Company, a $100 mi
ll
ion
bus
ines
s.He i
sthe chai
rman and CEO oft
he
company and a nat
ional
ly s
yndi
cat
ed
col
umni
stf
orUni
ted Feat
ure Syndi
cat
e.He i
sthe aut
horofs
ever
albooks
i
ncl
udi
ng Swi
m wi
tht
he Shar
ks wi
thout Bei
ng Eat
en Al
ive,Bewar
ethe
Nak
ed ManWho Of
fer
sYouHi
sShi
rtand TheMack
ayMBA ofSel
li
ng i
nthe
RealWor
ld.
CHAPTER1:

15,
000 Ti
cket
sforToni
ght
sGame,Pl
eas
e
(
a)Sol
ve bus
ines
spr
obl
emsbyl
ooki
ng pas
trecor
ds.
..bus
ines
srevol
ves
ar
ound humanbei
ngs
.
(
b)Les
sonsl
ear
ned f
rom a l
if
eti
me ofmar
ket
ing:
anyone cangett
he or
der
,ifhe
swi
ll
ing t
ost
ret
cht
he t
rut
hfarenough
t
he mar
koft
he pr
ofes
sionali
sto gett
he r
eor
der
yourcompet
iti
onwant
stoki
ckyouras
s..
.yourar
rogancei
mpr
ovest
hei
r
odds
.
CHAPTER2:

MacKay
sShor
tCour
sei
nSALESMANSHI
P:
#1:I
tsnothow muchi
tswor
th.
..i
tshow muchpeopl
ethi
nki
tswor
th.
(
a)Wor
th der
ivesnotf
rom t
he i
ntr
ins
ic val
ue ofan obj
ect
,butf
rom t
he
demand cr
eat
ed f
ori
t.
(
b) Mar
ket
ing i
s not s
ell
ing .
..i
ts cr
eat
ing condi
tions s
o t
he buyer
convi
nceshi
msel
f.

41
#2:Good s
alespeopl
elett
he cus
tomers
ellhi
msel
f.Yourcus
tomer=your
ownbes
tsal
esman.
#3: Knowi
ng s
omet
hing about your cus
tomer i
sjus
t as i
mpor
tant as
knowi
ng ever
ythi
ng aboutyourpr
oduct
.Maybehewant
syourpr
oduct
,or
maybe i
tsr
ecogni
tion,r
espect
,et
c.
#4:Keep youreye onyourt
ime,notonyourwat
ch:Setup a dai
lyt
o-do
s
chedul
e wi
tha f
ixed numberofi
temst
o compl
ete.Don
tst
op unt
ilyou
re
done.You
llhi
tthe t
op oft
he char
ts.
#5:I
fyoudon
thave a des
tinat
ion,you
llnevergett
her
e:Set
ting goal
s
i
sjus
ta l
ong-
ter
m ver
sionofk
eepi
ng t
rackofyourt
ime.A goali
sa dr
eam
wi
tha deadl
ine.
#6:Bel
ieve i
nyour
sel
f,evenwhennobodyel
se does
:Itdoes
ntmat
teri
f
t
heys
ayyou can
t.The onl
ythi
ng t
hatmat
ter
sisi
fyou s
ayi
t.Don
tever
qui
t.
#7:Fant
asi
ze:Pr
oject
ing your
sel
fint
osucces
sfuls
ituat
ionsi
sone oft
he
mos
tpower
fulmeanst
her
eist
o achi
eve per
sonalgoal
s.
#8: Shor
t not
es = l
ong r
esul
ts: Send cons
tant
ly, handwr
itt
en,
hand-
stamped,s
ents
ame day

CHAPTER3:

MacKay
sShor
tCour
se onNEGOTI
ATI
ON
:
#1:Smi
leand s
aynount
ilyourt
onguebl
eeds
:Thet
ermsofyourdeal
swi
ll
i
mpr
ove when you l
ear
nto s
ay NO.Sel
ler
s al
ways pi
tch
buy now
,
becaus
eifyoudon
t,t
hey
llhave t
o gi
ve youa bet
terdeal
.Poweri
nany
negot
iat
ioni
sinf
ormat
ion.Have mor
ethant
he ot
herguy.
#2:Ever
ythi
ng
snegot
iabl
e:A dealcan al
waysbe made,i
fthe par
ties
s
ee i
tbenef
iti
ng t
hem.
#3: Be abl
e t
o wal
k away f
rom t
he t
abl
e wi
thout a deal
:It
sa
di
sadvant
age t
o have t
o mak
e a deal
.The ot
herguy wi
llj
ustout
-wai
t
you.Deal
sgetbet
terwhenyouwal
kaway

42

CHAPTER4:

MacKay
sShor
tCour
sei
nMANAGEMENT
:
#1:
Singl
e gr
eat
est mi
stak
e a manager can mak
e: Over
-cont
rol
.
Under
stand t
hat what peopl
e ar
elooki
ng f
ori
s not j
ust money .
..i
ts
r
ecogni
tion,appr
eci
ati
on and cr
eat
ive f
reedom.Be l
ikej
ock
ey Wi
ll
ie
Shoemak
er,bes
tint
hebus
ines
s.Hehast
hel
ight
estt
ouchont
her
eins
.The
hor
se neverknowshe
sther
e,unl
esshe
sneeded.
#2:When an exper
ienced man meet
sa r
ich man,exper
ience get
sthe
money,and t
her
ichmanget
sexper
ience:I
tdoes
ntmat
terhow manypai
ls
ofmi
lkyous
pil
l,j
ustdon
tlos
ethe cow.
#3:You
llal
waysgett
hegood news.
..i
tshow f
astyougett
hebad news
t
hatcount
s:Wal
kyourpl
antever
yday.Encour
age t
he f
low ofbad news
,
evenf
rom cus
tomer
s.
Li
ttl
ethi
ngsmeanever
ythi
ng:Wi
nni
ng i
smaki
ng f
ewermi
stak
est
hanyour
opponent
s.I
fyou
rei
nchar
ge,yourj
ob i
sto mi
nimi
ze mi
stak
es.
#4:Getbor
ed eas
ily:Ent
repr
eneur
sdon
tmak
e good manager
s.I
fyou
re
an ent
repr
eneur
,recogni
ze yourweaknes
s..
.hi
res
omebody t
o manage
t
he det
ail
s.
#5:Owni
ng 1% ofs
omet
hing i
sbet
tert
han managi
ng 100% ofanyt
hing:
Not
hing i
stougherf
ort
he ent
repr
eneurt
han l
ett
ing go oft
otalcont
rol
.
But t
he peopl
ethey need t
orun t
he bus
ines
s expect a pi
ece oft
he
act
ion.
#6:Di
gthe wel
lbef
ore you
ret
hir
sty:Youmus
tsee val
ue (
and mak
e your
move)bef
oret
he mar
ket
place s
tar
tsbi
ddi
ng oni
t.

CHAPTER5:
Qui
cki
es
:
#1:Gr
ati
tude i
sthe l
eas
tdeepl
yfel
tofal
lhuman emot
ions
:Somet
hing
mak
eshumansunwi
ll
ing t
o beart
hebur
denofbei
ng gr
atef
ul(
and mor
all
y
behol
den)f
orver
ylong.Gr
ati
tude l
ast
sno l
ongert
han i
ttak
esf
ort
he
r
eci
pientt
osayt
hey
re et
ernal
lygr
atef
ul.
#2:I
tsnotyourl
astgood i
dea:I
fyou came up wi
thone,you cancome
43
up wi
thanot
her
.Once i
snotenough.
#3: Buy cheap car
s and expens
ive hous
es:I
f you can af
for
d an
expens
ive car
,youmak
e mor
e ofani
mpactbydr
ivi
ng anor
dinar
yone.
#4: Ther
es no s
uch t
hing as bad memor
y: You can r
emember
anyt
hing/
ever
ythi
ng .
..i
fyou
rei
nter
est
ed i
nit
.Ei
nst
eincoul
dn
tremember
hi
sownphonenumber
,Whys
houl
d Ibot
heri
fIcanl
ooki
tup?Thet
hings
he di
dremember
,nobodycoul
dlookup unl
esshe wr
otei
tdown.
#5:Putyourmemor
ywher
e yourmout
his
:St
ayi
ntouchwi
thyourment
ors
.
#6:St
ays
har
p bypr
edi
cti
ng t
he f
utur
e(s
tockmar
ket
,el
ect
ions
,et
c.)
:
3r
ulest
othi
sgame:
(
a)Youhave t
o wr
ite downyourpr
edi
cti
ons
.
(
b)Youhave t
o wr
ite downt
he r
eas
onsf
oryourpr
edi
cti
ons
.
(
c)Af
teryoul
ose,anal
yzet
her
eas
onswhyt
hepr
edi
cti
onf
ail
ed.Themor
e
youpr
act
ice t
his
,the bet
teryourpr
edi
cti
ve abi
li
tywi
llbe.
#7: The beaut
y of cas
h: I
ts cr
isp, cur
vaceous
, col
d har
d cas
h.
I
ntoxi
cat
ing.Mes
mer
izi
ng.Gi
ve yourbonus
esi
ncas
h.One oft
he appeal
s
ofgambl
ing i
sthatt
heypayi
ncas
h.
#8:Meani
ng ofLi
fe:A l
itt
les
ong,a l
itt
le dance,a l
itt
les
elt
zerdownt
he
pant
s.
CHAPTER6:

Hel
ping yourki
dsbeatt
he odds
:
Don
tpl
anons
ticki
ng ar
ound t
o col
lectt
he gol
d wat
ch:
(
a)I
nthei
r1s
tjob,t
heyar
e over
pai
d..
.theyknow not
hing.
(
b)They ar
e over
pai
dthe f
irs
t2 year
sbecaus
e,once t
hey know what
t
heyar
e doi
ng,t
he companycanunder
payt
hem f
ort
he next20.
(
c)The t
rick i
sto mi
nimi
ze t
he mi
ddl
e,under
pai
d year
s.Once you
ve
mas
ter
ed t
hej
ob,i
tst
imet
omoveup,ormoveout
.Fi
nd s
omet
hing youl
ike
t
o do and mak
eitpay:Wor
kis
ntwor
k,i
fyou l
ikei
t.Mak
e bel
ieve your
par
ent
sar
eri
ghts
omeoft
het
ime:Youmus
tbeabl
etocommuni
cat
einan
at
tract
ive f
ashi
on

44
CHAPTER7:
The Cl
oser
:
How t
o Succeed SUCCESS = (
Det
ermi
nat
ion) + (
Goal
-set
ting) +
(
Concent
rat
ion)Nocompanyhasa per
manentcons
umerf
ranchi
se.Noone
hast
he onl
y game i
ntown.The never
-endi
ng cycl
e ofdes
truct
ion and
change i
nher
ent i
n a capi
tal
ist economy al
ways pr
ovi
des new
oppor
tuni
tiesf
ort
hos
e wi
thdet
ermi
nat
ion,goal
sand concent
rat
ion.

Revi
ew :
Pr
act
ical advi
ce and i
nter
est
ing anecdot
es, dr
awn f
rom Mack
ay'
s
exper
ience,combi
ne t
o pr
ovi
de har
d-dr
ivi
ng l
ess
ons on s
ales
mans
hip,
negot
iat
ion,and management
.He of
fer
sa wor
thwhi
let
heor
eti
calr
eadi
ng
f
orbot
h exper
ienced and begi
nni
ng bus
ines
stypes
,pr
esent
ed i
n br
ief
chapt
erst
hatcan be r
ead f
ort
hei
rindi
vidualval
ue.Us
efulexampl
esof
i
ll
ust
rat
ive bus
ines
sconductar
e der
ived f
rom pol
iti
cs,bus
ines
s,s
por
ts,
and academi
a.A r
eadabl
e amal
gam ofcommons
ens
e advi
ce f
orgener
al
r
eader
s.
-
RaviGoel

45
WORKRUL
ES
-
Las
zloBock
I
nthe book
,Wor
k Rul
es t
he aut
horMr
.Las
zlo
Bock expl
ains acr
ossf
our
teen vi
vid chapt
ers
how Googl
ecr
eat
esanenvi
ronmentt
hatdr
ives
i
nnovat
ion.He even i
ll
ust
rat
est
he di
ffer
entr
e-
cr
uit
ing and t
alentmanagementpr
act
icest
hat
Googl
e has t
ried dur
ing hi
stenur
e,and ex-
pl
ains how t
he company r
eached wher
eiti
s
t
oday.
As t
he head ofPeopl
e Oper
ati
ons
,hi
sjob i
stof
ind and nur
tur
ethe
empl
oyees
,sel
f-ni
cknamed
Googl
ers
,and k
eep t
hem happy.
Googl
espendst
wicet
hebudgetofanaver
agecompanyonr
ecr
uit
ing.I
t
may s
eem i
rrat
ionalt
oinves
tso heavi
ly on r
ecr
uit
ing butt
o at
tractt
he
mos
ttal
ent
ed peopl
eont
hepl
anet
,a goali
sneeded whi
chi
nspi
rest
hem.
Hement
ionsi
nhi
sbookt
ofi
nd t
hebes
tpeopl
e,youmus
tbewi
ll
ing t
owai
t
and a bad hi
re can be t
oxi
c.Mr
.Bock
simpor
tant l
ess
on:out
side of
col
legecampus
es,t
hebes
tand br
ight
estar
eus
ual
lynotl
ooki
ng f
ora j
ob
at Googl
e. Ther
efor
e, Googl
e s
tri
ves t
o i
dent
ify t
he cr
me de l
a
cr
mewho ar
en
tthi
nki
ng about appl
ying t
o wor
k at Googl
e and
encour
agi
ng t
hem,whi
ch may even t
ake year
s.They do t
hist
hrough an
i
n-hous
e r
ecr
uit
ing t
eam and a candi
dat
e dat
abas
e (
gHi
re)
, whi
ch
s
ear
chest
he I
nter
netand t
rackspot
ent
ialt
op candi
dat
es.Then Googl
e
r
ecr
uit
erss
tar
tnet
wor
king wi
tht
hem doi
ng what
everi
ttak
est
o gett
hem
hi
red,whi
cheveni
ncl
udesagr
eei
ng t
o hi
reent
iret
eamsand openi
ng new
of
fices
,asGoogl
e di
dinAar
hus
,Denmar
k.

Las
zlo advi
ces r
ecr
uit
erst
o s
et t
he bar hi
gh,never compr
omi
se on
qual
ity,and f
ind s
omeone who i
sbet
tert
hanyoui
nsome meani
ngf
ulway.
AtGoogl
e,l
ow per
for
mer
sar
e ai
ded t
olear
n orf
ind new r
oles
.The bes
t

46
peopl
ear
ekeptundera mi
cros
copet
ofi
nd outand r
epl
icat
ewhatmak
es
t
hem s
ucceed.Though Googl
eisal
laboutbei
ng f
airbuti
tbel
ievesi
n
payi
ng bes
tpeopl
e mor
ethan aver
age peopl
e ot
her
wis
ethey wi
llhave
ar
eas
ont
o qui
t.

Few mos
tint
eres
ting pr
act
icesofGoogl
e ar
eini
nter
nalf
eedbackand
engagements
urvey,cal
led "
Googl
e Gei
st.
"Ever
ythi
ng atGoogl
eisdat
a
or
ient
ed t
her
eis no pl
ace f
ors
pecul
ati
on.Googl
e even pr
ovi
des i
ts
empl
oyees wi
th cer
tai
nfr
inge benef
itsl
ike day car
e,i
n hous
elaundr
y,
hai
rcutbusand manymor
eto mak
e Googl
ersmor
e pr
oduct
ive.Googl
ers
ar
e per
mit
ted t
osetas
ide up t
o 20 per
centoft
hei
rsal
ari
ed t
ime t
o wor
k
on pr
oject
sthati
nter
estt
hem.Some oft
he bes
tGoogl
e pr
oduct
swer
e
devel
oped dur
ing t
his20 per
centt
ime.

The aut
hordef
ends t
he r
ight
s ofempl
oyees
,ar
gui
ng per
suas
ivel
ythat
t
hey des
erve t
o "
run t
he as
ylum
,they need not be commanded or
cont
rol
led bypowermongermanager
s.Thi
siswhyatGoogl
etheyt
akeas
much powerf
rom manager
sast
hey can and he bel
ievesempl
oyeeswi
ll
s
eek out or
gani
zat
ions t
hat pr
ovi
de an open, col
labor
ati
ve and
i
nnovat
ive envi
ronment
.
Bockas
ser
tst
hroughoutt
hebookt
hatwhenempl
oyeesar
egi
venf
reedom,
"
theywi
lls
urpr
ise,del
ightand amaze you.
"
Cul
tur
e under
pins ever
ythi
ng at Googl
e.Some of t
he mos
timpor
tant
as
pect
s of Googl
es cul
tur
e: f
indi
ng a compel
li
ng mi
ssi
on, bei
ng
t
rans
par
ent
,and gi
ving peopl
e a voi
ce.
Tr
ans
par
encyi
sani
ntegr
alpar
tofGoogl
escul
tur
e.Bockexpl
ainst
hisby
ment
ioni
ng t
he f
oll
owi
ng exampl
e- Googl
es code bas
e,whi
ch i
sthe
col
lect
ionofal
lthes
our
cecodet
hatmak
esal
lofGoogl
espr
oduct
swor
k
i
smade avai
labl
eto a newl
yhi
red s
oft
war
e engi
neer
(Noogl
ers
)ont
he
ver
yfi
rstdaywher
easata t
ypi
cals
oft
war
e companyt
he new hi
re wi
llbe
i
mpos
ed wi
thl
otofr
est
rict
ions
.Thi
sisj
ustone i
nst
ance oft
rans
par
ency
47
manymor
e have beenment
ioned i
nthe book
.
The bookWor
kRul
esi
sa t
rue mas
ter
piece.Ther
e ar
e boat
loadsofs
tor
ies
f
rom wi
thi
n Googl
e,aswel
lasgr
eatanecdot
esf
rom ot
heror
gani
zat
ions
and ot
herexper
iencest
hatLas
zlo haswi
tnes
sed.The f
inalgem f
rom t
he
booki
sinf
actt
he f
inalchapt
er,"
WhatYouCanDo St
art
ing Tomor
row.
"
I
tisa r
emar
kabl
e book whi
ch r
eveal
sthe s
ecr
etst
o be a t
alent
power
hous
e,whi
chcanappl
icabl
eto evens
mal
lscal
e bus
ines
ses
.
-
Kar
anJ
ais
wal

48
WHO MOVEDMYCHEESE?
-
SpencerJ
ohns
on

Whatwoul
d youdo i
fyouwer
e notaf
rai
d?
Who Moved My Chees
e? i
sa s
impl
e par
abl
e
t
hatr
eveal
spr
ofound t
rut
hsaboutchange.
'
Chees
e'i
s a met
aphorf
orwhatyou wantt
o
have i
nli
fe -whet
heri
t'sa good j
ob,a l
ovi
ng
r
elat
ions
hip,money,a pos
ses
sion,good heal
th,
ors
pir
itualpeace ofmi
nd.And '
The Maze'i
s
wher
e you l
ook f
or what you want - t
he
or
gani
zat
ionyouwor
kin,ort
he f
ami
lyorcommuni
tyyoul
ive i
n.
Who Moved My Chees
e? f
eat
uresf
ourchar
act
ers
:two mi
ce,"
Sni
ff"and
"
Scur
ry,
"and t
wo l
itt
lepeopl
e,humanmet
aphor
,"Hem"and "
Haw
.Theyl
ive
i
n a maze,a r
epr
esent
ati
on ofone'
senvi
ronment
,and l
ook f
orchees
e,
r
epr
esent
ati
ve ofhappi
nes
sand s
ucces
s.I
nit
ial
ly wi
thoutchees
e,each
gr
oup,t
hemi
ceand humans
,pai
red of
fand t
ravel
ed t
hel
engt
hycor
ridor
s
s
ear
chi
ng f
orchees
e.One daybot
hgr
oupshappenupona chees
e-f
il
led
cor
ridor at "
Chees
e St
ati
on C.
" Cont
ent wi
tht
hei
rfi
nd, t
he humans
es
tabl
ishr
out
inesar
ound t
hei
rdai
lyi
ntak
e ofchees
e,s
lowl
y becomi
ng
ar
rogant i
nthe pr
oces
s.One day Sni
ffand Scur
ry ar
rive at Chees
e
St
ati
onC t
ofi
nd no chees
elef
t,butt
heyar
e nots
urpr
ised.Not
ici
ng t
he
chees
esuppl
ydwi
ndl
ing,t
heyhavement
all
ypr
epar
ed bef
orehand f
ort
he
ar
duous but i
nevi
tabl
etas
k of f
indi
ng mor
e chees
e.Leavi
ng Chees
e
St
ati
on C behi
nd,t
hey begi
nthei
rhuntf
ornew chees
etoget
her
.Lat
er
t
hatday,Hem and Haw ar
rive atChees
e St
ati
onC onl
ytof
ind t
he s
ame
t
hing,no chees
e.Anger
ed and annoyed,Hem demands
,"Who Moved My
Chees
e?"The humanshave count
ed ont
he chees
esuppl
yto be cons
tant
,
and s
o ar
e unpr
epar
ed f
or t
his event
ual
ity.Af
ter deci
ding t
hat t
he
chees
eisi
ndeed gone t
hey getangr
y att
he unf
air
nes
soft
he s
ituat
ion
and bot
ha s
ear
ch f
ornew chees
e.ButHem i
sdead s
eti
n hi
svi
cti
mized

49
mi
nds
et and di
smi
sses t
he pr
opos
al.Meanwhi
le,Sni
ffand Scur
ry have
f
ound "
Chees
eSt
ati
onN,
"and new chees
e.ButbackatChees
eSt
ati
onC,
Hem and Haw ar
e af
fect
ed byt
hei
rlackofchees
e and bl
ame eachot
her
f
ort
hei
rpr
obl
em.Hopi
ng t
ochange,Haw agai
npr
opos
esa s
ear
chf
ornew
chees
e.However
,Hem i
scomf
ort
ed by hi
sol
drout
ine and i
sfr
ight
ened
aboutt
he unknown.He knockst
he i
dea agai
n.Af
tera whi
le ofbei
ng i
n
deni
al,t
hehumansr
emai
nwi
thoutchees
e.Oneday,havi
ng di
scover
ed hi
s
debi
li
tat
ing f
ear
s,Haw begi
ns t
o chuckl
e at t
he s
ituat
ion and s
tops
t
aki
ng hi
msel
fsos
eri
ous
ly.Real
izi
ng hes
houl
dsi
mpl
ymoveon,Haw ent
ers
t
he maze,but not bef
ore chi
sel
ing "
IfYou Do Not Change,You Can
Become Ext
inct
"ont
he wal
lofChees
e St
ati
onC f
orhi
sfr
iend t
o ponder
.
St
illf
ear
fulofhi
str
ek,he begi
ns hi
s vent
ure.St
illpl
agued wi
th wor
ry
(
per
hapshe haswai
ted t
oo l
ong t
o begi
n hi
ssear
ch.
..
),Haw f
indss
ome
bi
tsofchees
ethatnour
ishhi
m and he i
sabl
eto cont
inue hi
ssear
ch.Haw
eal
r izes t
hatt
he chees
e has nots
uddenl
y vani
shed,buthas dwi
ndl
ed
f
rom cont
inualeat
ing.Af
ter a s
top at an empt
y chees
est
ati
on,Haw
begi
nswor
ryi
ng aboutt
he unknownagai
n.Br
ushi
ng as
ide hi
sfear
s,Haw'
s
new mi
nds
etal
lowshi
mto agai
n enj
oy l
if
e.He haseven begun t
osmi
le
agai
n!He i
sreal
izi
ng t
hat"
When you move beyond yourf
ear
,you f
eel
f
ree.
"Af
teranot
herempt
ychees
est
ati
on,Haw deci
dest
ogobackf
orHem
wi
tht
he f
ew bi
tsofnew chees
e he hasmanaged t
ofi
nd.Uncompr
omi
sing,
Hem r
efus
es t
he new chees
e, t
o hi
s f
riend'
s di
sappoi
ntment
. Wi
th
knowl
edgel
ear
ned al
ong t
heway,Haw headsbacki
ntot
hemaze.Get
ting
deeperi
ntot
hemaze,i
nspi
red bybi
tsofnew chees
eher
eand t
her
e,Haw
l
eavesa t
rai
lofwr
iti
ngsont
hewal
l("
TheHandwr
iti
ng Ont
heWal
l"
).Thes
e
cl
ari
fy hi
sown t
hinki
ng and gi
ve hi
m hope t
hathi
sfr
iend wi
llf
ind ai
din
t
hem dur
ing hi
ssear
chf
ornew chees
e.St
illt
ravel
ing,Haw one daycomes
acr
ossChees
e St
ati
onN,abundantwi
thchees
e,i
ncl
udi
ng s
ome var
iet
ies
t
hatar
est
ranget
o hi
m,and her
eal
izeshehasf
ound whathewasl
ooki
ng
f
or.Af
tereat
ing,Haw r
efl
ect
son hi
sexper
ience.He ponder
sa r
etur
nto
s
ee hi
sol
dfr
iend.ButHaw deci
dest
oletHem f
ind hi
sownway.Caut
ious
50
f
rom pas
texper
ience,Haw now i
nspect
sChees
e St
ati
on N dai
ly and ex-
pl
oresdi
ffer
entpar
tsoft
he maze r
egul
arl
yto pr
eventanycompl
acency
f
rom s
ett
ing i
n.Af
terhear
ing movementi
nthe maze one day,Haw r
eal
izes
s
omeonei
sappr
oachi
ng t
hes
tat
ion.Uns
ure,Haw hopest
hati
tishi
sfr
iend
Hem who hasf
ound t
he way.
I
nsi
ght
s.:
Ant
ici
pat
e change.
Adaptqui
ckl
y.
Enj
oychange.
Be r
eadyt
o change qui
ckl
y,agai
nand agai
n.
Havi
ng Chees
e mak
esyouhappy.
The mor
eimpor
tantyourChees
eist
o you,t
he mor
e youwantt
o hol
d on
t
oit
.
I
fyoudo notchange,youcanbecome ext
inct
.
As
kyour
sel
fWhatwoul
d Ido i
fIwer
en
taf
rai
d?
Smel
lthe Chees
e of
tens
o youknow wheni
tisget
ting ol
d.
Movementi
na new di
rect
ionhel
psyouf
ind New Chees
e.
Whenyoumove beyond yourf
ear
,youf
eelf
ree.
I
magi
ning mys
elfenj
oyi
ng New Chees
e,evenbef
oreIf
ind i
t,l
eadsmet
o
i
t.
The qui
ckeryoul
etgo ofol
d chees
e,t
he s
ooneryouf
ind New Chees
e.
I
tiss
afert
osear
chi
nthe maze t
hanr
emai
nina chees
eles
ssi
tuat
ion.
Ol
d bel
ief
sdo notl
ead yout
o New Chees
e.
When you s
ee t
hatyou can f
ind and enj
oy New Chees
e,you change
cour
se.
Not
ici
ng s
mal
lchangesear
ly hel
psyou adaptt
othe bi
ggerchanges
t
hatar
eto come.
Read t
he Handwr
iti
ng ont
he Wal
l
Change happens
.Theyk
eep movi
ng t
he Chees
e.
Move wi
tht
he Chees
e and enj
oyi
t!
-
Khus
hboo Agar
wal
51
SHOEDOG
-
Phi
lKni
ght
1962
Phi
lKni
ghtpl
anned t
o go ona wor
ldt
ouri
nthe
year 1962. The onl
y pr
obl
em was t
hat he
needed s
ome money whi
ch he l
aterr
ecei
ved
f
rom hi
sfat
her
.Al
ong wi
thhi
sfr
iend,Car
ter
,Phi
l
t
ravel
ed t
o Hawai
i,butt
hei
rpl
anschanged as
s
oon ast
hey wi
tnes
sed t
he beaut
ifulbeaches
.
Thus
,theyt
ookup j
obsi
nHawai
iand cont
inued
t
ost
ayt
her
e.Phi
lbeganwor
king i
nCor
nfel
d asanaccount
ant
.However
,
Phi
llef
tHawai
iand cont
inued wi
thhi
spl
ant
otr
avelt
he wor
ld.
1963
Phi
lret
urned backt
o Or
egon af
terhi
swor
ldt
rip.Dur
ing one ofhi
str
ips
,
hehad as
ked s
omeJ
apanes
ebus
ines
sment
osend hi
maf
ew s
ampl
es.Af
ter
hi
sfat
herhad wi
red $50t
othem,Phi
lwai
ted f
ort
hem t
osend t
hes
hoest
o
hi
m.He al
so beganwor
king i
nanaccount
ing f
irm.
1964
Phi
ldeci
ded t
oshow t
he s
ampl
est
o hi
scoach,Bower
man,who pos
ses
sed
gr
eatknowl
edge abouts
hoes
.Bower
man notonl
ysai
dthatt
he s
hoes
wer
e good,but al
so want
ed s
tri
ke a 50/
50 par
tner
shi
p wi
th hi
m.Phi
l
agr
eed t
othe deal
,butt
hankst
o Bower
man
slawyer
,the par
tner
shi
p was
al
ter
ed and Phi
lagr
eed t
o t
ake up onl
y 49% of t
he company.Phi
l
i
mmedi
atel
y as
ked t
he J
apanes
eifhe coul
d be t
he excl
usi
ve di
str
ibut
or
oft
he s
hoesi
nwes
ter
nUSA.He al
so or
der
ed f
or300 pai
rsofs
hoes
.
1965
Phi
l
s bus
ines
s,Bl
ue Ri
bbon,t
ook of
fwel
land he began s
ell
ing s
hoes
.
Pr
ett
ysoon,he wasabl
eto gener
ate $8000 i
nsal
esi
n hi
sfi
rstyearand
doubl
ed i
tto$16,
000t
henext
.Ever
yti
mehet
ookup a l
oan,hemanaged
t
orepayi
tbackand or
deranot
hers
hipmentofs
hoes
.However
,si
nce t
he

52
company wasgr
owi
ng t
oo f
astand t
he f
utur
eseemed bl
eak
,Phi
lbegan
wor
king i
na f
irm asanaccount
antagai
n.
1966
Johns
on (
empl
oyee)wr
otet
o Phi
lcons
tant
ly.He al
so began t
o col
lect
f
eedbackf
rom cus
tomer
sand des
igned new s
ket
chest
o mak
ethepr
oduct
mor
e appeal
ing.Bus
ines
scont
inued and t
heyal
so opened t
hei
rver
yfi
rst
r
etai
lst
orei
n Sant
a Moni
ca.However
,Phi
lhad t
o go backt
oJapan t
o
convi
nce t
hem t
hathe coul
d handl
ethe wor
kload.He l
ied t
othem and
s
aidt
hathe notonl
yhad of
ficesi
ntheWes
tCoas
t,buti
nthe Eas
tCoas
t
aswel
l.Fi
nal
ly,t
hey s
igned a 3 yearcont
ractwi
th Phi
land he r
etur
ned
backhome.
1967
Chaosens
ued af
terJohns
on r
eal
ized whatPhi
lhad done.Phi
lexpect
ed
Johns
on t
osetup an of
fice i
nthe Eas
tCoas
timmedi
atel
y.Af
tera s
light
negot
iat
ion,hi
ssal
ary was al
so hi
ked by $50 and he l
eftt
othe Eas
t
Coas
t.Upont
hei
nsi
stenceofBower
man,Phi
lhi
red t
wo mor
eempl
oyeest
o
k
eep t
he bus
ines
saf
loat
.The s
hoe wasnamed Azt
ec,butwhen Adi
das
t
hreat
ened t
osue t
hem becaus
ethey had a s
hoe named Azt
eca Gol
d,
Phi
land Bower
manchanged t
he name t
o Cor
tez.
1968
Phi
lcont
inued t
o wor
katt
he Pr
ice Wat
erhous
e asanaccount
ant
,buthe
wasdi
ssat
isf
ied becaus
e he year
ned t
ospend mor
eti
me athi
scompany.
However
,even t
hough Bl
ue Ri
bbon was cr
uis
ing al
ong wel
l,i
tcoul
dn
t
j
ust
ifya s
alar
yforhi
m yet
.Ther
efor
e,he qui
thi
sjob i
nthe hopes of
f
indi
ng s
omet
hing t
hatwoul
dn
ttak
e up mucht
ime,butwoul
dst
illpayhi
s
bi
ll
s.I
twasatt
hispoi
ntt
hathe beganwor
king asanAs
sis
tantPr
ofes
sor
att
he Por
tland St
ate Uni
ver
sit
y.
1969
By1969,Bl
ue Ri
bbonhad pi
cked up s
peed.Wi
ths
alesof$150,
000 i
nthe
year1968,t
hey wer
e al
ready pr
oject
ing about$300,
000 f
or1969.Phi
l
qui
thi
sjob and beganwor
king f
ullt
ime,dr
awi
ng $18,
000 a year
.
53
1970
Phi
lfl
ew t
oJapan once agai
nto meett
he execut
ivesatOni
tsuk
a.The
s
alesatOni
tsuk
a wer
etouchi
ng a gr
and $22 mi
ll
ionand i
twasal
so con-
cl
uded t
hata hef
ty por
tion came t
hrough t
he s
alesi
n US.Ther
efor
e,Phi
l
want
ed anext
ens
ionf
oratl
eas
t5 year
s,buthe wasdeni
ed.
1971
Dur
ing oneofhi
smeet
ings
,Phi
lmanaged t
ost
eala f
olderf
rom Ki
tami
,and
r
eal
ized t
hathewasi
ntouchwi
th18 ot
herat
hlet
icdi
str
ibut
orsi
ntheUS,
es
sent
ial
ly put
ting Bl
ue Ri
bbon
s bus
ines
sinj
eopar
dy.Ki
tamial
sos
ug-
ges
ted t
hat Oni
tsuk
atak
e overBl
ue Ri
bbon and i
fPhi
ldi
dn
tfai
lto
compl
y,he qui
etl
ythr
eat
ened t
hatt
hey woul
dter
minat
ethe agr
eement
.
Thi
ngs gotwor
se when t
he banks r
efus
ed t
o gi
ve mor
e cr
edi
tto Bl
ue
Ri
bbon.I
nor
dert
osavet
hecompany,Phi
lmanaged t
ogeti
ntoanagr
ee-
mentwi
thanot
hercompanyand named t
hebr
and
Nik
e,ak
atheGoddes
s
ofVi
ctor
y.
1972
Phi
land hi
scol
leaguesgear
ed up f
ort
hei
rshow i
nChi
cago.Theywai
ted
f
ort
heNi
kes
hoes
,butwer
ethor
oughl
ydi
sappoi
nted.Thes
hoeswer
edef
i-
ni
tel
y di
ffer
entf
rom t
he s
ampl
est
hey had s
een,buts
ince t
her
e wasno
t
ime,t
hey wentahead and convi
nced t
he s
ales
men t
hatt
he s
hoeswer
e
good.Event
ual
ly,t
hey managed t
ost
ay af
loatbutt
roubl
eloomed when
Oni
tsuk
afound outt
hatPhi
lhad l
ied t
othem and t
her
ebycutt
hem of
f.
1973
Bl
ueRi
bbonhad r
eal
ized t
hatt
heyneeded t
ospend moneyoncel
ebr
iti
es
t
oadver
tis
eNi
ke.Theyhad manybr
andst
ocompet
eagai
nstand notonl
y
wer
ethe pr
icess
teep,butt
hey al
so had t
o convi
nce t
he at
hlet
est
hat
t
hei
rshoeswer
e good.However
,spor
tsper
sonswer
e al
readywear
ing Ni
ke
and i
tspel
tsucces
sfort
he company.They al
sos
igned Pr
efont
aine,ak
a
Pr
e,a nat
ionals
uper
start
o endor
set
hem.However
,evenwi
tha $3.
2M i
n
s
ales
,Bl
ue Ri
bbonhad l
ostmoneyf
ort
he f
irs
tti
me.

54
1974
Asa count
eract
ive s
tri
ke,Bl
ue Ri
bbon had al
sos
ued Oni
tsuk
aint
he US.
Phi
lof
fer
ed t
ruce and r
eques
ted t
hem t
o pay $800,
000 as damages
;
however
,itwasr
eject
ed.The t
rialwenton wi
thl
awyer
sques
tioni
ng bot
h
t
he s
ides
.Phi
ltookhi
spl
ace on t
he wi
tnes
sst
and,butal
though he was
pr
epar
ed,hebuckl
ed undert
hepr
ess
ure.Bower
man,Woodel
land Johns
on
wer
e al
so ques
tioned,butwhathel
ped t
he mos
twasI
wano
s(Mr
.Ki
tami
s
as
sis
tant
)tes
timony.Ul
timat
ely,Bl
ue Ri
bbonwont
he cas
e.
1975
Wi
tha cr
edi
tli
ne of$1 mi
ll
ionf
rom t
he bankand Ni
ssho,i
twasi
mper
ati
ve
t
o pay Ni
ssho f
irs
tto avoi
d any pr
obl
ems
.Addi
tional
ly,Phi
lref
used t
o
s
low down and woul
dli
ter
all
y empt
ythei
r cas
hres
erves when i
t was
payday;however
,al
though t
hiss
eemed l
iker
eckl
esst
hinki
ng,he t
rul
y
bel
ieved t
hathi
spr
oduct
swer
einhi
ghdemand.Theyear1975 wasa bi
g
bl
ow t
o Bi
g Ri
bbon,bot
hment
all
yand f
inanci
all
ybecaus
e ofPr
esdeat
h
i
nanacci
dent
.
1976
Att
his poi
nt,Phi
lbegan t
o wonderi
fitmade s
ens
eto go publ
ic.He
l
oat
hed ans
wer
ing s
tockhol
der
sand wass
tucki
na di
lemma wheneverhe
and hi
s col
leagues di
scus
sed aboutgoi
ng publ
ic.On t
he ot
herhand,
Bower
manbowed outbecaus
e ofPr
esdeat
h.Phi
lar
gued t
hathe had t
o
s
tay,butBower
man wasdeepl
y af
fect
ed.Ther
efor
e,he r
etai
ned a s
mal
l
per
cent
age and s
old hi
sshar
est
o Phi
lata di
scount
ed r
ate.1976 wasa
gr
eatyearf
orNi
kes
incet
heyexpanded asmuchast
heycoul
d.Theyal
so
had t
hree Ol
ympi
anss
por
ting Ni
kes
hoes
.
1977
Bl
ue Ri
bbonhad a l
otgoi
ng f
ori
tint
ermsofdevel
opmenti
n1977.They
al
so had Mr
.Rudy s
howi
ng t
hem how ai
rsol
eswer
ethe nextbi
gthi
ng i
n
t
hes
hoei
ndus
try.Theyal
so begans
igni
ng bas
ket
bal
lpl
ayer
stoi
ncr
eas
e
t
hei
rsal
es. Added t
o t
his wer
e t
he endor
sement
s comi
ng i
n f
rom
Hol
lywood.Ni
keswer
eseen i
n many movi
esi
ncl
udi
ng t
he I
ncr
edi
ble Hul
k
and t
he s
alesj
ustgotbi
gger
.
55
1978
Al
thoughBl
ue Ri
bbonwasengaged i
na warwi
tht
he Fedst
hatamount
ed
t
o $25 mi
ll
ion,t
he company was doi
ng pr
ett
y good.The s
ales wer
e
s
ummi
ng up t
o $140 mi
ll
ionand t
he f
utur
eseemed br
ight
er.The company
al
so changed t
hei
rlocat
ion t
o cat
ert
othei
rincr
eas
ing demands
.They
deci
ded t
o up t
he game i
ftheyeverwant
ed t
o go publ
ic.
1979
Phi
lmetwi
th a bur
eaucr
atf
rom t
he t
reas
ury depar
tment
.Al
though Phi
l
t
ried t
o convi
ncehi
m,t
hemandi
dn
tbudgeani
nch.And s
o begana l
ong
j
our
neyf
orPhi
lwher
ehemos
tlyf
lew t
o Was
hingt
onever
yot
herdayt
otr
y
and s
trai
ght
en t
hings out
.However
, at t
he s
ame t
ime, t
he company
expanded f
urt
hert
okeep up wi
th al
lthe demandsoft
he cus
tomer
s.But
,
due t
ofl
uct
uat
ing cur
renci
esand hi
gh l
aborcos
ts,i
twasf
inal
lyt
ime t
o
t
hinkaboutChi
na.
1980
To f
ightbackagai
nstt
he Feds
,Phi
land hi
scol
leaguesdevi
sed a pl
an.
Theyr
eleas
ed a new s
hoecal
led t
he
OneLi
ne
,buti
twasmuchcheaper
t
hant
he ot
her
s,whi
chmeantt
hati
tspr
ice woul
d be us
ed asa r
efer
ence
poi
ntt
o deci
de t
he i
mpor
tdut
y.Addi
tional
ly,t
heyr
eleas
ed a TV ad t
hat
s
pok
e aboutt
he at
roci
tiesoft
he gover
nmentt
hatwast
ryi
ng t
o puta
l
itt
le company f
rom Or
egon outofbus
ines
s.To hi
tthe f
inalnai
lint
he
cof
fin,t
heyal
sof
il
ed a $25 mi
ll
ions
uitand al
leged t
hatt
hei
rcompet
itor
s
wer
e cons
pir
ing t
otak
ethem out
.The mat
terwass
ett
led af
terPhi
lwr
ote
t
hem a check of$9 mi
ll
ion.On December2,1980,t
he company f
inal
ly
wentpubl
ic.
-
Isha Agar
wal

56
WHYAREN'
TTHEYSHOUTING
-
ABANKER'
STALE -Kevi
nRodger
s
Why ar
en
tthey s
hout
ing i
s a book wher
ethe
aut
horKevi
nRodger
s,t
akesourhand and wal
ks
us t
hrough t
he hi
stor
y off
inance i
nthe pas
t
t
hir
ty year
sofs
eis
mic changes
,in an ef
for
tles
s
manner
.The bookwi
llpar
ticul
arl
yres
onat
e wi
th
anyone who haswor
ked i
nfi
nanci
als
ervi
cesor
i
scur
iousaboutwor
king f
ora bank
.
The bookt
akesusf
rom t
he daysofphone cal
ls,
hand s
ignal
s and al
pha mal
es t
o a wor
ld ofcompl
ex der
ivat
ives and
comput
ergeeks
.Itexpl
ainshow moder
nbanki
ng wor
ksf
ort
hos
ewho don
t
know t
hei
rspotFX (
for
eign exchange)f
rom t
hei
rVaR orwho s
truggl
eto
r
ecal
lpr
eci
sel
yhow Mont
e Car
lo oper
ates
.
Why ar
en
tthey s
hout
ingas
ksa l
ady f
rom a gr
oup ofpeopl
e who wer
e
bei
ng gi
vena t
ouroft
heDeut
schebank
str
adi
ng f
loorbyKevi
nRodger
s,
head off
orei
gnexchange.The l
ookont
he l
ady
sface wass
imi
lart
othe
unhappy l
ookofa chi
ld,unf
air
ly deni
ed a l
ong awai
ted t
reat
.She had
hear
d aboutt
radi
ng f
loor
s.She t
houghts
he knew whatt
o expect
.Ther
e
woul
d be exci
tement
. Ther
e woul
d be peopl
e on t
wo phones
s
imul
taneous
ly.Maybe t
her
e woul
d be s
ome s
wear
ing on s
ome wi
ld,
pr
imi
tive ges
ticul
ati
on,and cer
tai
nlyt
her
e woul
d be a l
otofs
hout
ing.
I
nst
ead t
he l
oudes
tnoi
ses
he coul
d hearwast
he t
appi
ng ofk
eyboar
ds.
Kevi
nst
ammer
ed outs
omewor
dsabouti
tbei
ng s
ummerand a bi
tsl
ow but
he knew t
hatwas
ntt
he r
ealr
eas
on.

Year
sbackwhenKevi
nst
art
ed outi
nhi
scar
eer
,ever
ysi
ngl
e move i
nthe
mar
ket
, each economi
c dat
a r
eleas
e, each unexpect
ed news was
accompani
ed by a deaf
eni
ng wave ofnoi
se.But l
att
erl
y even i
nthe
chaosoft
he cr
isi
sof2007 and 2008 t
he noi
se wasr
arel
ythe s
ame as

57
compar
ed t
o a nor
maldayi
nthe1990
s.Why?Theans
werwascomput
ers
.
Coul
ditbe t
hatt
echnol
ogy hast
rans
for
med banki
ng and i
smaki
ng i
t
evenmor
e uns
tabl
e?Di
dthe wi
des
pread us
e ofcomput
ershave anyt
hing
t
o do wi
tht
he bi
g cr
isi
s?Ans
wer
ing t
hes
e ques
tionsi
sin par
tthe ai
m of
t
hisbook
.
I
n1993,Kevi
nlef
tMer
ril
lLyncht
ojoi
nBank
ersTr
ustbuts
oonenoughwas
caughtup i
nthe gr
eat
estcr
isesasf
irs
tAs
ia,t
henRus
sia,t
henLong Ter
m
Capi
tal Management dr
agged t
he banki
ng i
ndus
tryt
o t
he br
ink of
di
sas
ter i
n 1998.Bank
ers Tr
ust was pur
chas
ed by t
he Ger
man gi
ant
Deut
scheBank
.And i
twasher
eatDeut
schet
hathehad t
ospend t
her
est
ofhi
scar
eer
.

The booki
sdi
vided i
ntot
hree mai
npar
ts.The f
irs
tpar
tReduced To The
Abs
urd-Aut
omat
ing FX,wher
eheexpl
ainshow t
heEBS(
Elect
roni
cBr
oki
ng
Ser
vices
)led t
otheext
inct
ionofs
potbr
oker
swho wer
eoncet
hebi
gges
t
s
tar
sin FX.Ass
yst
emsl
ike EBS and Reut
ersr
out
inel
y announced t
radi
ng
vol
umes
,tr
ader
sbegan t
o as
kfort
he s
creensand mor
e and mor
e banks
s
igned up f
ort
he s
yst
emswhi
chl
ed t
o a numberofs
pott
rader
sfi
nd wor
k
out
side f
inance and evenbecome cab dr
iver
s.

I
nthe pol
lconduct
ed by t
he magazi
ne Eur
omoney i
n 1995,Deut
sche
r
ank
ed 22nd i
nter
msofmar
kets
har
einFX bef
ore Kevi
nwashi
red.I
thad
been a s
tandi
ng j
okei
nthe mar
ket
,butaf
tera hi
ring s
pree and by t
he
pr
oces
sofr
ati
onal
izi
ng t
henumberoft
radi
ng l
ocat
ionst
hebank
sst
rong
r
elat
ions
hip wi
thi
tscor
por
ate cl
ient
sand i
tspus
hto dealwi
th hedge
f
undshad achi
eved t
he s
econd pl
ace.I
nthi
spos
iti
on i
tlook
ed up at
Ci
tibankwhi
chhad r
etai
ned t
he numberone s
lotever
ysi
ngl
e years
ince
t
he s
urvey had s
tar
ted i
nthe 1970
s.To over
come Ci
tibank whi
ch was
ever
ywher
eint
he FX mar
ket
,Deut
sche bankhad t
o do s
omet
hing ent
irel
y
di
ffer
ent t
han r
epl
icat
e t
hei
r model whi
ch was t
oo expens
ive and
unf
eas
ibl
e f
or Deut
sche t
o handl
e. The ul
timat
e pl
an was dubbed

58

ThePl
ankt
onSt
rat
egy
.Aswes
eet
hel
arges
tani
mal
,thebl
uewhal
edoes
nots
urvi
ve on a di
etofel
ephant
sbutr
atheron t
onsand t
onsofkr
ill
,
s
imi
lar
ly,t
he i
dea wast
o capt
ure al
lsmal
ldeal
sthr
oughs
creenss
othat
cus
tomer
sdi
dn
thave t
o bot
hert
he s
ales
peopl
e and t
he s
alespeopl
e
coul
d now concent
rat
e onbi
g pr
ofi
tabl
e deal
s.He el
abor
atest
he s
tor
y
of how wi
th cont
inuous changes and devel
opment
, Deut
sche bank
r
eached t
he mi
les
tone i
n 2000 and acqui
red t
he 1s
t pos
iti
on i
nthe
eur
omoney s
urvey s
urpas
sing Ci
tibank whi
ch was t
hought unbeat
abl
e.
Al
thought
he bankdi
dsee a f
ew upsand downsi
nthe year2001-
04.but
wi
tht
hei
r bi
gges
tinvent
ion ofARM (
aut
omat
ed r
isk manager
) by an
empl
oyee oft
he s
mal
ldeal
steam (
whi
ch was l
aterr
efer
red t
o a mor
e
gl
amor
ousname i
.e.e-
tradi
ng t
eam,af
tert
he s
ucces
sofARM)t
he 2005
pol
lwasa wal
kover
.Notonl
ydi
dtheyacqui
red t
hef
irs
tpos
iti
onbutt
hey
woni
twi
thanover
alls
har
e of16.
72% t
he hi
ghes
tsi
ngl
e mar
kets
har
e of
any bank i
nthe s
urvey'
s 25-
yearhi
stor
y.A l
ot ot
hers
uch i
nter
est
ing
i
nci
dent
s,ar
eshar
ed i
nthi
sbookby t
he aut
horwho dr
awson per
sonal
anecdot
es,and wr
itest
he booki
nthe l
ensofhi
sownexper
iences
.
Par
tTwo s
peaksabout
Creat
ing t
heCr
isi
s,and convi
nci
ngl
yar
guest
hat
t
he huge r
isei
nthe powerofcomput
ersand t
elecommuni
cat
ionsi
nthe
1990swast
hees
sent
ialpr
ecur
sorf
ort
hecr
isi
sof2008.Fi
nal
lyPar
tThr
ee
concl
udes wi
th
Maki
ng and Mendi
ng
,as
king (
rat
her t
han ans
wer
ing)
i
ntel
li
gentques
tionsaboutbanki
ng cul
tur
e,r
egul
ati
on and ot
herf
utur
e
devel
opment
s.
I
nWhyAr
en
tTheyShout
ing?,Rodger
shasdonea gr
eatj
ob i
ndi
sti
ll
ing a
l
otoff
inanci
alj
argon(
for
war
ds,t
wowaypr
ici
ng,t
riangl
ear
bit
rage,pr
op
t
radi
ng,et
c.)i
ntoa f
ormt
hatt
he gener
ali
stcanunder
stand.Fora r
eal
ly
l
ow pr
ice we get an i
mpr
ess
ive,per
sonal
ly cur
ated over
view of t
he
changesi
nfi
nanci
almar
ket
sint
hepas
tcoupl
eofdecades
,a bi
tofar
ket
knowl
edge and s
ome t
hought
sabouthow t
hingsar
e devel
opi
ng and/
or
f
ail
ing.I
tmak
esf
ora f
asci
nat
ing,i
mpor
tantr
ead abouta s
ubj
ectone
mi
ghtnotneces
sar
ilyhave t
houghthe want
ed t
o know more about
!
-
SiddhiNewat
ia
59
THE7HABI
TSOFHIGHLY
EFF
ECTI
VEPEOPL
E- St
ephenR.Covey
The 7 Habi
tsofHi
ghl
yef
fect
ive peopl
e
Wi
th 15 mi
ll
ion copi
es s
old i
tisf
ines
t book
nar
rat
esbySt
ephenRCoveywhi
chi
sdes
cri
bes
t
he 7 habi
tswhi
ch we do r
epeat
edl
y do t
hat
l
eadss
ucces
sfuli
nli
fe.
Theaut
hors
ayst
hatt
ochanget
hes
ituat
ionwe
havet
orepl
aceol
d des
truct
ivehabi
tswi
thnew
habi
tsofef
fect
ivenes
s.Ourhabi
tsmus
tbel
ongs
t
oourhappi
nes
sand t
ruebas
ed r
elat
ions
hip.Thes
evenhabi
tsdes
cri
bed
ar
e bas
ed on nat
urall
awsand i
fyou adoptt
hem,t
hey wi
lls
urel
y br
ing
t
he maxi
mum l
ong t
erm benef
ici
alr
esul
ts.
Peopl
eper
cei
vet
hewor
ld di
ffer
ent
ly.Weal
lhaveownpar
adi
gm and we
s
eet
hingsaccor
ding t
o ourpar
adi
gms
.Ifwewantt
o changeourl
if
ethen
we mus
tfi
rst change t
he way we l
ook at t
he t
hings
,shoul
dfocus on
i
mpr
ovi
ng yourper
sonalat
tit
ude and behavi
or.
The aut
horr
eveal
sthe s
evenmos
tef
fect
ive habi
tst
hatar
efol
lowi
ng.
1 Be pr
oact
ive
2 Begi
nwi
tht
he end i
nmi
nd
3 Putf
irs
tthi
ng f
irs
t
4 Thi
nkwi
nwi
n
5 Seekf
irs
tto under
stand t
hent
o be under
stood
6s
yner
gize
7 Shar
penyourSaw
# 1 BEPROACTI
VE
The mos
timpor
tantt
hingst
hatt
he human have i
sthei
rabi
li
tyt
othi
nk.
Ani
mal
s don'
t have t
hat abi
li
ty.
But human can choos
ethei
rthr
ough,
cont
rolmi
nd and managemood asperci
rcums
tancesand condi
tionst
hat
mak
eres
pons
ibl
eofourl
if
e.Pr
oact
ivemeanst
aki
ng i
nit
iat
ivebydi
vidi
ng

60
pr
obl
em i
ntot
wo cat
egor
yas
1 The pr
obl
em whi
chcanbe r
educed
2 ot
herpr
obl
em t
hatwe can'
tcont
rolt
othem
So aut
hors
ugges
tst
ofocusyourt
ime onwhatyoucancont
roli
nst
ead of
s
pendi
ng yourt
ime f
ocus
ing on event
sthat you cannot cont
rol.
Tak
e
act
iont
oreduce pr
obl
em.
#2 BEGI
N WI
THTHEEND I
N MI
ND
What char
act
er woul
d you l
ike t
hem t
o have s
een i
n you? What
achi
evement and cont
ribut
ion woul
d you want t
hem t
o r
emember ?
Bas
ical
lyt
hos
e ques
tion wi
th mot
ivat
ion t
ojus
tbegi
n and aut
horal
so
emphas
isonyouneed t
oimagi
ne,whatt
he ot
herpeopl
e ar
esayi
ng and
t
hinki
ng aboutyoui
fyouar
e dead and t
heyhave come onyourf
uner
al?
Youmus
tdevel
op a per
sonalmi
ssi
ons
tat
ementt
hatf
ocus
esonwhatyou
wantt
o be and do i
nyourl
if
e.
#3 PUTFI
RSTTHI
NG FI
RST
Thi
sbook i
sal
laboutt
ime and l
if
e management
.Al
lthe t
hingsyou do
dai
ly can be di
vided i
ntwo cat
egor
ythey ar
e ei
ther ur
gent and
i
mpor
tantornotur
gent .
You s
houl
d as
kyour
sel
fthi
sques
tion"
whatone
t
hings coul
d you do t
hat i
f you do on r
egul
ar bas
is woul
d mak
ea
t
remendouspos
iti
ve di
ffer
ence i
nourl
if
e?
Aut
horal
so ment
ionasPar
eto pr
inci
palt
hat80%oft
her
esul
tsf
low outof
20%oft
heact
ivi
ty.Weneed t
ofocusont
hos
emos
timpor
tant20%act
ivi
ty
and s
etpr
ior
iti
est
o become mor
e pr
oduct
ive.
# 4 THI
NKWI
N WI
N
I
tisbas
ed ont
heor
ythatt
her
eispl
ent
yint
hiswor
ldf
orever
ybodyand
one per
son'
ssucces
sshoul
d notbe achi
eved att
he expens
e ofs
ucces
s
ofot
her
s.I
tal
sot
eachyout
o wor
ktoget
hert
oseekmut
ualbenef
itst
hat
al
so encour
age you t
osee ot
herpeopl
e as cooper
ati
ve r
athert
han
compet
iti
ve.To become mor
e ef
fect
ive we mus
t wor
ktoget
her t
o get
l
ever
age oft
he l
iabi
li
ty and s
trengt
hen ofot
her peopl
erat
her t
han
nor
malt
hinki
ng of wi
nlos
e whi
ch was i
nst
all
ed s
ince bi
rth.
To enj
oy

61
s
ucces
s,we mus
tover
come t
hatt
hinki
ng.
# 5 SEEK FI
RSTTO UNDERSTAND ,
THEN TO BEUNDERSTOOD
Readi
ng ,
wri
ting,s
peaki
ng,l
ist
eni
ng t
hat4 t
ypesofcommuni
cat
ion s
kil
l
.
Asaut
hors
ayst
hati
fyou wantt
o become ef
fect
ive ,
you f
irs
tneed t
o
l
ist
en and under
stand what t
he ot
her per
son i
ssayi
ng. I
n ever
y
pr
ofes
sionalei
therdoct
or,
lawyer
,sal
esper
son .
Along wi
th wr
iti
ng and
s
peaki
ng s
kil
lone mus
tfocusonl
ist
eni
ng s
kil
lto become hi
ghl
yef
fect
ive.
#6 Syner
gize
I
tisdef
ined aswhol
eisgr
eat
ert
han t
he s
um ofi
tspar
ts.Accor
ding t
o
t
hispr
inci
palone pl
usone equalt
hree ormor
e.Gi
venbookaut
horgave
exampl
e of pl
ant
s and s
yner
gy i
s al
mos
t as i
f a gr
oup of peopl
e
col
lect
ivel
y wi
sht
o wor
ktoget
her t
o cr
eat
esome pr
oduct
ive t
hings
,
s
yner
gy i
s maki
ng i
mpr
ovement and cr
eat
ing s
omet
hing new wi
tht
he
cooper
ati
onofot
her
s.
#7 SHARPEN THESAW
The aut
horr
ecommendst
hatneed t
oinves
tsome t
ime and moneyon
your
sel
f,t
oimpr
ove yours
kil
ls.
Thi
smay be t
urned i
nto gr
eat
estas
seti
n
l
ong t
erm and aut
hor s
ays t
o f
oll
ow t
hes
e s
teps t
o become mor
e
pr
oduct
ive.
*Phys
ical-
heal
thexer
cis
e.
*s
pir
itual-
medi
tat
ionand r
eli
giousl
ect
ure
*ment
al-f
ormaleducat
ion,s
emi
nar
,books
,aut
obi
ogr
aphy
*s
oci
al/
emot
ional-
leader
shi
p,communi
cat
ion,cooper
ati
on.
Ever
yone who want
sto become mor
e pr
oduct
ive and ef
fect
ive s
houl
d
r
ead t
hisbook
.Al
thoughmos
toft
he poi
ntsknown asby dai
lys
oci
all
if
e
but s
til
l pr
esent
ati
on and under
standi
ng l
evel by St
ephen R i
s
i
ncompar
abl
e.Si
mpl
ythi
sbooksl
eadst
ofi
rsts
tep t
osucces
s.
-
Bis
waj
eetPani
grahy

62
63