Sunday, 4 November 2007
Making sense of dollars
Some people just "get" money. I don't.
Sure, I can do my business' accounts every year, but talk to me about cash rates and inflationary reserves and my eyes glaze over. As a journalist who reports on marketing, I need to upskill in this area.
So I've just finished reading two books that I hoped would give me the inside track on economics and money management:
Kissing the Frog: The magic that makes you money by the Brothers Middleton
Economics: A little book of big ideas by Matthew Forstater
Kissing the Frog is a brilliant idea - a storytelling approach to learning about investment.
The story follows Goldilocks as she seeks advice on investing in property, shares and businesses. Along the way she meets just about every fairytale character you've ever heard of, which is very smart, because it ties abstract financial and economic principles to familiar fairy tales. Somehow, along the way, the principles start to feel simpler and more familiar than they actually are.
It's not for kids, mind you. The Brothers Middleton try to spice up the story a little by adding a fair bit of sexual innuendo, particularly about that Prince Charming.
Because Frog is not just a dry treatise on investment, it's free to explore the more emotional side of investment. For me, anyway, the principles were easier to understand because they were told outright, and then explored through a story.
The Brothers Middleton also use different characters to educate us about different approaches, for instance the September hare's cautious, long-term approach to share investment, compared with the March hare's approach to high-risk, high-return options trading.
I got really excited when I started to read Economics: A Little Book of Big Ideas, but my enthusiasm dulled slightly as I went on. It promised a bite-sized approach to understand the big ideas of Economics, but I found it hard to discern a coherent structure.
It is bite-sized - each key economist gets just a double-page spread each - but is arranged by subject rather than chronology. I'm sure there is a structure to it, but it's quite hard to figure out, unless you already know all the stuff you got the book in order to understand.
The language could also be more accessible. However, that's a tall order when balanced against the need to fit someone's life work in two small pages.
So maybe Economics: A Little Book of Big Ideas isn't for beginners like me, but more useful for students of the field who need some quick revision.
More on economics in my review of Das Kapital: A Biography, and my thoughts on why we need to learn about money at Leadership Issues. Plus, a review of the Australian book Affluenza and the book Medici Money.
In coming months: a review of Adam Smith's Wealth of Nations: A Biography.