Automatic Wealth For Grads (review)
Michael Masterson, Automatic Wealth for Grads… And Anyone Else Just Starting Out (Hoboken, NJ: John Wiley & Sons, Inc., 2006), 238pp. 5/5
Essential financial advice — for everyone.
Do you wish you could be rich? Of course you do. Everyone does. Automatic Wealth for Grads is nine chapters of readable and homely financial advice that will change your life for the better if you haven’t learned its lessons already (and you probably haven’t).
I cannot stress highly enough the importance of Masterson’s basic lesson: always spend less than you earn, and invest the surplus wisely. In mid-2004, when I was still a “poor student,” I had saved $8,000 in cash, squirrelled away in a high-interest deposit at around 6%p.a. At age 23, my money was already making me more money; about $40 a month. If I had that money right now, I’d have the deposit for a loan on a very modest studio apartment. But I blew it. I used some of it to pay off credit card debt, and then continued to spend on the credit card. I then spent $4,000 on an overpriced Powerbook G4, and thousands more moving to Japan. By November 2005, I was $11,300 in debt. In two years, my net worth had fallen 241 percent! And not because I couldn’t control my spending. No, that’s something I’m very good at. But because I was foolish enough to believe that if I spent beyond my means while young, I’d make loads of cash in the future and be able to pay it all back easily.
It’s not easy. At 17%p.a., $11,300 in credit card debt will cost you almost $200/month in interest. You pay back $100/week, and you’ll still only be $200 ahead at the end of the month. Maybe if you were earning around $40,000 a year after tax, as I was in Japan, you can save $1,000 a month, but even then, it’ll still take over a year to pay the debt off, taking interest into account. I’ll get back to zero debt some-time around July 2007. In the meantime: PAIN. Spending more than you earn is madness. Don’t go there. Ever.
Maybe it sounds obvious, but most people never really get the lesson that the money you save makes more money for you. Even if you think you get it, you need to beat yourself around the head with the idea to make sure you don’t forget it like I did.
Quite aside from that, though, Masterson has very important advice for graduates in another area, and that’s the enterprise of finding work. Unless you’ve been lucky enough to plan ahead for your employment future and have secured a job with good advancement and earnings growth prospects by joining a graduate program, you’re likely to find deciding on a job you like, and getting it, is a difficult thing. Masterson proposes that you treat job-hunting as a direct marketing exercise. The idea is that you’re selling yourself, as a product, to a customer (your prospective employer) who has particular needs he wants fulfilled, needs that you can answer. And it’s an idea that will transform and focus the way you present yourself. This was the point that caught my eye when I was leafing through Automatic Wealth for Grads, and the one that brought me back to buy it even when I ought to have put the purchase price in the bank. But I’m betting that $35.95 is going to make me hundreds of thousands of dollars.
Masterson caps the book off with more home-style wisdom on the subject of “Living Rich, Starting Tomorrow.” His simple, sound advice for living well, indeed, for living like a billionaire, is to keep one’s demands modest, and to luxuriate in and be grateful for the fruits of your own prudent financial management. When I was just starting my PhD, a colleague (now Dr Lachlan Macdowall) giving a lecture on mass consumption told a class I was tutoring this: “the Coke you buy is the same as what a millionaire buys. More money won’t buy you a better Coke.” And he was right. Masterson repeats this insight: “The way you dress, the way you eat and drink—and even the home you live in—can be as good as any billionaire’s.” And he’s right, too. In a way, Automatic Wealth for Grads is about learning how to make use of the opportunities available in a capitalist society to build wealth through hard, smart work and sound financial management. But it also reminds us that because capitalism optimises the use of resources and stimulates human enterprise, it has led to a situation where the modestly wealthy now live better than all the kings of yesterday. By simply living below your means, for your whole life, you can build wealth enough to enjoy the finest luxuries in human history, in the ease of an early retirement.
Start heading there now. Start by reading this book.
(Those who want to save themselves A$35.90 might prefer to borrow Automatic Wealth for Grads from a library, or read a concise version of the same advice from John J. Brennan, chairman of Vanguard).
Macworld San Francisco 2006 keynote: Personal impressions
I’ve just finished watching “Steve Jobs’ keynote” from Macworld San Francisco 2006. I’m about to give you my personal impressions, from the perspective of this one, particular Mac user. I own a 2004 Powerbook G4 1.5ghz, 15”, and I use it for the following things:
- Writing my PhD thesis, and dabbling in fiction.
- Blogging
- Reading articles in PDF format.
- Heavy web-browsing (10-20 tabs in Firefox at any one time).
- Light gaming, since it’s not good for much else.
- Experimenting with Open Source software, including Linux.
I do these things at home on a small desk, and at work during my breaks, on the same laptop. Bear these use-cases in mind as I give you what I feel are the highlights and disappointments, for me, of Macworld SF 2006.
Highlights
Intel Processors
Two new Macs were announced today: a new iMac, and the rebranded Powerbook (now the MacBook Pro). The performance gains are going to make a big change to the user experience for OS X users, particularly Powerbook users. iMac performance is up to 3-4x what it was (so says Steve, although Apple’s iMac page says it’s only up 2x) from the previous model, and the MacBook Pro performs at 4-5x the rate of the latest Powerbooks. This is going to mean, I suspect, that Powerbook owners will finally get instant search from Spotlight.
More importantly, Apple users are going to see compatibility gains with Linux and Windows by being in the x86 world. I think we can expect a new version of Virtual PC that will run Windows XP (and soon Vista) without the need for x86 emulation. If it supports graphics acceleration (which Microsoft will want for Vista), we may just be able to do some decent gaming under Windows without leaving OS X. No word yet on whether these new machines will be able to dual-boot Windows and OS X easily, but I’m sure we’ll get there. People using Linux on Apple hardware are now going to be able to use binary drivers for their video cards, and applications like Skype. It’s about time.
iLife ‘06
The new version of iPhoto is reportedly much faster. It needed to be. Let’s hope we see no more library-mangling and colour-corruption of the kind we’ve had from iPhoto 4 and 5.
Apple’s commitment to making Garageband a great podcast creation tool is, I predict, going to markedly improve the average quality of podcasts.
Industrial Design
The new MacBook Pro uses a magnetically attached power cable, which will reputedly prevent the notebook being yanked off the table if one trips over the power cord. This is a common problem for me, and it’s nice to see it solved. This is an extremely small design point, but one that’ll make a big difference for users, and probably improve turnaround times for Apple notebook repairs, because there’ll be less of them to be done.
Disappointments
The keynote was, for me, more one of disappointments than highlights:
Notebook weight
This is the big one for me. At around 2.6kg, my current Powerbook is too heavy to be considered really portable. I want a notebook that I can put in my bag and carry around without the extra weight reminding me there’s more than books in there. Full-featured pro notebooks from major manufacturers like Sony and Lenovo are now routinely coming in around or under 1.5kg. The MacBook Pro, at around 2.2kg, has shed 300-400g, but that’s not enough. At this rate, my next laptop is going to be an Intel iBook.
One Button
The MacBook Pro still has only one button. Since people will be running Windows and Linux on this, it’s not good enough. OS X itself makes ample use of right-clicks, something which Apple evidently recognises, since it recently released the Mighty Mouse. Some apps, like Maya, are downright impossible to use without a right mouse button. So, Apple, it’s time to stop this one-button foolishness and admit you were wrong. Give your notebooks a second mouse button.
Price
The new iMac and MacBook Pro come in at the same price points as their predecessors. If we’re going to see any price-cuts as a result of volume discounts from Intel, we’ll have to wait.
.Mac
Since I have a web-hosting plan and a Gmail account, .Mac is of absolutely no interest to me. But Apple keeps including features in its products that are .Mac only. I can’t get or use its Backup application, and I won’t be able to do photocasting from iPhoto, and probably I won’t be able to use a bunch of functionality in the iWeb suite.
Requiring a .Mac subscription for some features is a real turn-off for internet users whose expertise is even moving in the direction of “pro.” If a feature requires it, I’m simply not going to use it. Neither, I suspect, wil the numerous pro-Mac web-designers out there (such as Michael Heilemann, who although a .Mac subscriber, may not be one for much longer).
What I would really like to see is for Apple to release a little app that I can upload to my webhost which will give me access to all those little .Mac-only features, without a .Mac subscription and all the pointless things, like another web-mail account, that I don’t need.
Boring
Previous Jobs keynotes I’ve watched have been a lot more varied than today’s. Today’s focused too much on software demos for software that’s been around a while (iPhoto and Garageband for instance). I had an IM session with a friend going in another window, and I didn’t mind the distraction at all.
Conclusion
iLife ‘06 looks like a nice incremental upgrade, and I’m sure to enjoy using it. The introduction of Intel processors into Macs is going to deliver a lot of benefits for Apple and its users down the track, but not just yet. When we start seeing Intel-only software for OS X, the fun will really begin. The Powerbook upgrade is largely a disappointment, despite massive processor performance gains. Apple’s notebook line is desperately in need of a truly light-weight model, and the lack of a second trackpad button is absolute madness.
Nevertheless, I am, and will probably remain, for some time, a relatively happy Mac user.
Wiping Linux off my hard drive
If there’s anyone who wasn’t quite sure if I’m a computer geek, this is the post to prove it…
Ever since I went to the Digital Arts and Culture conference at RMIT in 2003, where I presented this paper, (many of the political arguments of which I now thoroughly disagree with), and where every second attendee was toting some kind of Apple notebook, I’ve been “a Mac person,” as some people I know would put it. I’ve also managed to bring my entire family to the Apple fold; even Mum and Dad are about to buy a new G4 iBook.
Now, OS X 10.3 came with my Powerbook G4, and it’s a great operating system, the best I’ve ever used, in fact. But I also really love the idea of Linux, and also some of the software that is unique to the free-*nix world, like GNOME. I have, however, struggled in vain to make it my sole operating system on both my Powerbook and my x86 PC. I’m currently removing it from my Powerbook, where it’s sat, unused, eating 10 gigs of my hard drive, and it may well vanish from my PC, as well.
I came to this conclusion last night after having a go at installing the latest preview release of Ubuntu Linux, dubbed the “Hoary Hedgehog.” Ubuntu is my favourite distro to date, despite being relatively new. It uses Debian’s APT for package management, so installing new software from online repositories is a snap, and it always comes with the latest version of GNOME. The last release had been sitting on my harddrive unused because it neither supported Airport Expresss (Broadcom’s fault), nor had a working PPPOE utility, and without internet access, a computer isn’t very useful to me.
Hoary’s networking worked fine. Still no wireless, but PPPOE was easy, so I could get online to download some codecs to, in theory, watch some Rurouni Kenshin (in .ogm). But when I finally got them working in gxine, the sound was way too quiet (even with everything at full volume), and trying to use Totem to play the files made my mouse-pointer freeze (needing not just an X-server restart, but a complete reboot to fix). Mounting my HFS+ drive in Ubuntu, I later discovered with Disk Utility.app in OS X, also created some minor, fixable errors.
On top of that, there’s no Exposé, no hardware acceleration for the GUI (and once Tiger comes out, I’ll be saying: “no integrated widget system, no system-wide instant search,” and so on). When compared to Windows, the GNOME GUI is brilliant: multiple desktops, fast drawing of image thumbnails, great usability; but when compared to OS X, GNOME seems like ancient history. KDE is awful, I don’t use it at all.
There’s also very few commercial games for Linux, and sorry, open-source developers, but the only real AAA titles are commercial. Even OS X doesn’t do so poorly in this area, in comparison. Things like Nethack and interactive fiction are great, but they aren’t pushing any technical boundaries.
Other than commercial games, I use free software almost exclusively on my Mac: LyX, OpenOffice, AbiWord, Firefox, Adium, Instiki, MPlayerOSX, VLC, FFView, and more. The list is similar on my PC, where I’m running all this stuff under Windows. All this stuff was born of the same, free software movement that created Linux, and which desperately wants Linux to be the world’s operating system of choice. But I’m sorry to say that despite these applications having delivered technically advanced ways to do my work and to share it across my computers and with others using open file formats, Linux just isn’t the OS to run them on. It isn’t the best. It still won’t “just work,” “out of the box,” or off the bootable CD if you will.
I want the best OS I can have, and I’ll even pay money for it. I paid nearly $150 for Panther the year before last, and I consider it one of the most worthwhile purchases I’ve ever made. When Linux is the best there is, maybe I’ll come back to the fold. But for now, I’m looking forward to having an extra 10 gigs free on my hard drive.