The Millionaire Fastlane Summary

The Millionaire Fastlane SummaryCrack the Code to Wealth and Live Rich for a Lifetime.

If you are already exhausted by the 40-hour workweek, DeMarco offers a solution.

Regarding prosperity, the world displays same possibilities for each and every one!

Who Should Read “The Millionaire Fastlane”? And Why?

In the world of countless wars, mind games and treachery, people have lost the eagerness to thrive on challenges. Even in such environment, giving up defies the fundamental laws of evolution that we inherited from the animals.

After centuries of struggle and survival, many experts reckon that the economy is finally fully-grown and ready to flourish. With this in mind, our team presents the “The Millionaire Fastlane Summary” and prescribes this amazing book for all persons.

About MJ DeMarco

MJ DeMarcoMJ DeMarco is a highly skilled author, who uses the expertise that he gained throughout his lucrative career in order to produce life-altering concepts. As an entrepreneur and founder Limo.com, he tasted the smell of richness before he reached 30.

“The Millionaire Fastlane Summary”

The tricky part of becoming rich and famous is that nobody knows what even “rich” means! So, before we start sharing thoughts on increasing your income and becoming a Rockstar, define the richness? According to some, the real fortune emerges from immaterial things, so you cannot be absolutely sure of where is this leading.

However, we’ll stick to the basics and instigate a process that money-thirsty individual should follow. Luckiness doesn’t have any substantial role in becoming upper class, despite the collective opinion that endorses such theory. Fate also has minimal influence on this never-ending development.

The bottom line is if you allowed the society to program your mind into believing that wealthiness is something unachievable absent mysterious forces, you need a new teacher! It’s like saying, my life is out of my control – absurd, isn’t it?

Don’t become a victim to your own mindset, decide the future and even if you fail to fulfill your dreams, the next time “luck” will be on your side, or should we say dedication.

To cut a long story short, there is another critical element of growth – the ability to manage your income. Your 100,000 $ + salary or yearly income is not sufficient to avoid bankruptcy.

How many sportsmen and athletes have acknowledged this theory (unconsciously), with a lot higher income than that. Technically, the chances of going broke are inclined towards the financial expertise, you possess.

Or, are you one of those who literally say – better now than never, because no one knows what the tomorrow holds. Instead of living the life cautionary on full alert, they choose to spend their earnings, = the spending Fastlane.

If you haven’t heard the thesis – Get a college degree, find a good job and then years later, you can enjoy the retirement stage; you are not out of this world. In practice, life doesn’t unfold according to some restricted strategies and long-term plans.

Investing your earnings is probably the only factor that truly opposes this idea. Let’s move slowly to unveil all hidden dangers.

First things first, never forget about the devastating effect of inflation. It’s possible that after all those years, your savings and money will decline in value, and you’ll receive only a small portion of your actual investment.

According to experts, formal education is perhaps the biggest culprit that is forcing you to think in a predictable manner. Such conventional behavior speaks against getting rich! After digesting all the knowledge, it’ll be quite hard to fly in the face of the “traditional” mindset.

Your out-of-box thinking patterns will end up buried, and your creativity questioned. In finance, this can be interpreted as an ability to calculate ROI or Net Present Value, but lacking critical thinking skills to handle thorny situations.

By now, you are starting to grasp what hinder professional growth, and how to confront these factors. These strategies executed by inexperienced individuals can endanger your capital.

In general, to really move one step closer to prosperity, in a race against time, one must become financially independent. Any independence comes at a price that not all of us are willing to pay. Raise the bar, and put in place various strategies that can help the process of diversification.

As an illustration of the DeMarco’s testimony, we can record that becoming rich doesn’t occur in a blink of an eye. It takes years of experience to develop the expertise where you can cope with any financial pressure, both internal and external. Your financial capabilities don’t make you wealthy if you lack the knowledge to manage such substantial amount of capital.

Such guidance and mastery are hard to find, but remember “Rich” = Guts, not knowledge!  

Key Lessons from “The Millionaire Fastlane

1.      The market hasn’t got any special requests
2.      The economy and its deliverables
3.      The ability to see behind the curtain

The market hasn’t got any special requests

In front of the eyes of the economy, we are all equal. Every deal must be concluded with utmost sincerity and awareness. After a thoughtful plan is designed, any company can facilitate the processes which contribute to the making of a diversified portfolio.

The economy and its deliverables

Freedom is the most desirable outcome, but a certain risk comes with it – in a subtle form. MJ DeMarco totally agrees that money isn’t the only aspect of happiness, but sure is essential.

Nurturing relationships, taking care of your body, having close contact with your relatives are some of the elements no capital can purchase.

The ability to see behind the curtain

Let’s jump to marketing. When you watch a catching ad displayed via Facebook for example, what are your first thoughts? – Instead of thinking about the invention, your main concern is what will this product give or generate. Such restricted mindset act as a “death sentence” in the hostile entrepreneurial community.

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“The Millionaire Fastlane” Quotes

Time isn’t a commodity, something you pass around like a cake. Time is the substance of life. When anyone asks you to give your time, they’re really asking for a chunk of your life. Click To Tweet All events of wealth are precluded by process, a backstory of trial, risk, hard work, and sacrifice. If you try to skip process, you’ll never experience events. Click To Tweet There’s a profound difference between interest and commitment. Interest reads a book; commitment applies the book 50 times. Click To Tweet If millions seek you, you will be paid millions. Click To Tweet Stop thinking about business in terms of your selfish desires, whether it’s money, dreams or “do what you love.” Instead, chase needs, problems, pain points, service deficiencies, and emotions. Click To Tweet

Our Critical Review

From top-to-bottom, we felt the pull from DeMarco’s fantastic ideas. In truth, not many books covering management, or entrepreneurship are able to bring something new to the scene as “The Millionaire Fastlane” does.

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The Death of Money Summary

The Death of Money SummaryThe Coming Collapse of the International Monetary System

Cracks in the economy are characteristic for every country. You cannot escape the massive impact of potential crashes and collapses.

In today’s book summary, we outline why and how should the world solve such pressing matters.

Who Should Read “The Death of Money”? And Why?

The Death of Money” comes at the right money, to warns us of the danger lurking ahead. The world rolls towards another major economic blow caused by various factors.

In this book you’ll get the idea of how dangerous the situation actually is; it’s best-equipped for people who have at least elementary economic understanding.

About James Rickards

James RickardsJames Rickards is an American expert in law and wrote numerous articles and books based on finance. He is the author of Currency Wars, The New Case of Gold, The Road to Ruin and The Death of Money.  

“The Death of Money Summary”

It’s never good to look back at life, but recalling the economic elements which caused the crisis in the 30s and recent history 2008, can produce a trace we ought to follow.

Some experts can say with some confidence that we rose above the temporary blow and managed to save our economy. However, many people are skeptical, because it’s too soon to tell.

Only a few centuries ago, our ancestors paid for their desired goods and other commodities in pieces of silver and gold. From the start of the 20th century, almost anywhere in the civilized world, the governments issued a decree from which the project of “paper” money was launched.

Such initiative reinvented the way of doing business and managing transactions. In truth, the money we use doesn’t have a real worth; the actual value derives from the state regulate.

After the 1973 oil crises, the world realized that the governments through their legal representatives could not “order” the bankers to stabilize the currency. It was literally impossible, since the monetary policy lost its grip, so the world economy entered into e process of never-ending fluctuations.

Even cyber-attacks can produce such damage, even leading to total state bankruptcy.

In addition to the previous statement, we highlight the financial warfare as a new battlefront for world dominance. There are two types of it: offensive and defensive.

The offensive financial warfare means to provoke or instigate a reign of fiscal terror on foreign markets and threaten the country’s economic prosperity. Such stock frauds occur behind closed curtains.

The defensive financial warfare is acting in defense of free capital markets, or devise a strategic plan to retaliate against the institutes or organizations which have caused the worry.

According to many forecasts, the upcoming years are going to be tough for investors. The investment climate is gradually creating a bubble and endangers the investors’ funds. If the Chinese market falls or declines, all the potential and current investors would have their money stuck in fruitless projects and operations.  

Let’s expand on how to avoid being in that bubble:

The American dollar as a currency is not too secure as it once was. Many countries, especially the OPEC states are questioning the over-reliance of it and want to reduce the state reserves.

Although most of the trades on a global scale happen to involve the dollar, yet many superpowers like (China and Russia) don’t want to be enslaved by foreign country’s monetary policies due to inflation possibility.

Even today, politicians use the same methods intentionally to ease of the state’s debt. The currency value, can practically absorb the deficit but at what cost?

People will lose faith in the currency making it less valuable, which can lead to a financial collapse. A terrible price to pay for “irresponsible spending”!!

By now, you are aware that the dollar is in big trouble as the global reserve currency. To prevent a disaster, the world bankers must develop a long-term plan to handle the fluctuations.

So, what exactly can the banks do?

In recent years, one more quasi-currency has been developed to act on behalf of the IMF (International Monetary Fund) – the Special Drawing Rights or the SDR. IMF lends capital to third world countries in particular, but now the option is to rely on a self-made currency – more secure than the “green stuff”.

In general, this idea will allow countries to use the SDR in order to conduct transactions and swap or exchange currencies between them. This would ease of the process and set in motion real FREE-CAPITAL-MARKETS.

Even the U.S. representatives don’t oppose this idea, in fact, they think it would lead the American Economy in the desired direction.

Key Lessons from “The Death of Money

1.      The threat of inflation
2.      The famous claim
3.      The value of diversification

The threat of inflation

Inflation is pretty common term in economic circles. The Weimar Republic suffered a loss in the WW1; their substantial military debt had risen to unmeasurable standards. Such significant amount had to be repaid.

They caused hyperinflation to handle the massive reparations and brought the world to its knees in order to reduce it.

The famous claim

Warren Buffett openly discredited the value of gold and challenged all those investors who believe in it. Several years afterward, the global monetary system realized the mistake and gradually began to withdraw from the long-year partnership.

The value of diversification

Although there are thousands of ways to diversify your portfolio, it’s best if you apply some reliable tactics. Keeping 20% in gold bars and 30% in cash is a standard ground rule for investors. The other 50, you divide between arts, hedge funds, insurance, and real estates.

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“The Death of Money” Quotes

In our time, the aureate has become brazen—the golden has become brass. A return to true value based on trust is long overdue. Click To Tweet The economy is like a high-altitude climber proceeding slowly, methodically on a ridgeline at twenty-eight thousand feet without oxygen. On one side of the ridge is a vertical face that goes straight down for a mile. On the other side is… Click To Tweet SDR issuance can be viewed as “test drive” prior to. Click To Tweet Workers receive raises in nominal terms, while wages adjust downward in real terms. This is a form of money illusion or deception of workers by central banks, but it works in theory to lower real unit labor costs. Click To Tweet A gold standard is the ideal monetary system for those who create wealth through ingenuity, entrepreneurship, and hard work. Gold standards are disfavored by those who do not create wealth but instead seek to extract wealth from others… Click To Tweet When it comes to betting on a sure thing, greed trumps common sense and makes the bet irresistible. Click To Tweet

Our Critical Review

If you are open to finding out the truth, then there is no better way to do it, then to read “The Death of Money.”

In this case, the truth refers to the troubling economic times that lay ahead of us. In our opinion, this book deserves all the praises.

 

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Red Team Summary

Red Team SummaryHow to Succeed By Thinking Like the Enemy

Sometimes, we are blind to our weaknesses.

Such is the case in life – and in business.

In our summary of “Red Team,” we will offer you a way to solve this problem. The title is self-explanatory: the solution lies in employing red teams consisted of “devil’s advocates” which will open your eyes to your corporate strategy issues.

How and why should you adopt this approach?

Read on to find out.

Who Should Read “Red Team”? and Why?

In “Red Team,” Micah Zenko, a national security expert and a senior fellow at the Council on Foreign Relations, argues that many executives and managers are unable to assess their corporate strategies accurately. He explains that most of the time, they remain blind to rival perspectives, which makes them vulnerable.  

To solve this widespread problem, he proposes using a “red team.”

A “red team” is a group of “devil’s advocates” which tries to adopt the competitors’ way of thinking and find weak spots in the corporate strategy, defenses, and performance.

Micah Zenko presents a history of using red teams during the hunt for Osama bin Laden and gives a tour of the US Army’s University of Foreign Military and Cultural Studies.

Furthermore, he offers some valuable advice on using red teams in your business and adapting the approach to suit your corporate needs.

We recommend “Red Team” to marketing managers, security professionals, information-technology experts, strategists, and of course, senior executives.

About Micah Zenko

Micah ZenkoMicah Zenko has a history of high-profile jobs: the Harvard’s Kennedy School of Government, the Congressional Research Service, the Brookings Institution and the State Department’s Office of Policy Planning. He is currently a senior fellow at the Council on Foreign Relations.

He writes for several papers among which the Washington Post, The New York Times and Foreign Affairs. Additionally, his national security column is available on ForeignPolicy.com.

“Red Team Summary”

When intelligent officers plan a critical operation, they frequently assemble a group of “devil’s advocates ” to attack their procedure mercilessly.

This group is called “red team,” and it serves to test the plan for shortcomings, runs a range of simulations, and brainstorms ways and reasons because of which the arrangement may fizzle.

It takes a gander at the strategy from a rival’s point of view and predicts how an adversary would react.

At the point when a red team approves an arrangement, leaders can be sure that the plan is sound.

The private sector is progressively adopting red-team assessment strategies.

What is the upside of adopting a red-team in your business?

Organizations that adjust such red-team procedures as simulations can challenge assumptions, spark imagination, alleviate “cognitive biases,” and limit the homogenizing, accommodating power of mindless compliance.

Members of institutions fail at evaluating their strategies and processes. As an insider, you observe your operations through a filter of biases. These unconscious thought patterns or heuristics include:

  • “Confirmation bias.”
  • “Mirror imaging.”
  • “Existence bias.”
  • “Organizational bias.”

A red team tries to limit such routine patterns of thoughts and responses.

The procedure can be a basic as a specially appointed internal brainstorming team utilizing freeing structures, which are strategies to support creative reasoning.

Such trial interactions can start to motivate brainstorming sessions. By using “Four Ways of Seeing,” red-teams have different roles, including likely enemies, and build a matrix showing the corporate culture, “social system, power balances, historical narrative, and economies.”

A red-team disturbance may include utilizing outside experts to lead business “war games” or employing “white-hat” programmers who break into an organization’s computer network.

Why?

Because these activities look for and analyze weaknesses in associations, their security systems, and strategies.

Key Lessons from “Red Team”:

1.      Red-Team Techniques
2.      Getting it Right
3.      “Mini-Red-Teamers”

Red-Team Techniques

Businesses have started using red-team techniques, although not as much as the military and intelligence communities.

Many enterprises do red-team exercises using their available staff. Scenario planning, in which you envision a goal and think of the steps to achieve it, is a standard technique.

In any case, regardless of the industry or whether the arena is public or private, red teams work following three fundamental techniques:

  • Simulations

Regardless of what kind of organization you are in, you can anticipate your competitors’ moves by using simulations.

  • “Vulnerability probes.”

Members of red teams can adopt the ac of hackers, spies or even thieves to test if a company is secure enough against people that try to infiltrate it.

  • “Alternative analysis.”

Alternative analysis like what ifs or structured brainstorming should be used to produce different perspectives.

Getting It Right

There is no exact template of best practices that apply to every red-team activity.

That is because red-teams’ best friends are flexibility and unpredictability. They customize each activity to align with an organization’s values, goals, and cultures.

Most successful red-team exercises have six things in common:

  • Show that the boss supports the team
  • Clarify the team’s position
  • Involve the right mix of people
  • Team members are flexible
  • The boss can handle bad news
  • Schedule the right amount of red teaming

“Mini-Red-Teamers”

The most significant obstacle to broader adoption of red-teams across organizations is executive resistance.

Many executives believe that they can get the same or similar results as they would with red-teams if they encourage their employees to share their opinions and identify emerging issues.

However, not all workers have the time or expertise to diagnose specific problems. Also, many employees are not comfortable with telling their bosses about issues. In fact, most of them avoid making disturbances.

Red-teams have time authority and expertise. In other words, they have everything they need to diagnose problems and offer advice. They have time, power and knowledge.

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“Red Team” Quotes

A habitual line of action constitutes a habitual line of thought and gives the point of view from which facts and events are apprehended and reduced to a body of knowledge. Click To Tweet Over a century ago, the brilliant economist and sociologist Thorstein Veblen illustrated how our minds become shaped and narrowed by our daily occupations. Click To Tweet These unconscious motivations on decision-making under uncertain conditions make it inherently difficult to evaluate one’s own judgments and actions. Click To Tweet People who perform the worst on pop quizzes also have the widest variance between how they thought they performed and the actual score that they earned. Click To Tweet Organizations tend to be poor judges of their own performance, and are often blind to shortcomings and pitfalls. Click To Tweet

Our Critical Review

In “Red Team,” Micah Zenko gives clear descriptions of the red teams and their strategies and offers wise and useful suggestions. Sure, the writing can be dry at times, but Zenko’s stories revolving around counterterrorism operations, computer hacking and war games are compelling enough to keep your attention.

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The Dao of Capital Summary

The Dao of Capital SummaryAustrian Investing in a Distorted World

If you don’t know how to manage your finances and allocate your capital, The Dao of Capital Summary will probably give you a few hints.

Don’t shy away from risk-taking, and exploit your potential.

Who Should Read “The Dao of Capital”? And Why?

In all honesty, “The Dao of Capital” is best-equipped for students, economists, and experts in the world of investments.

Although Mark welcomes anyone, you need a little of bit of previous knowledge to break the entry barriers and grasp the idea.

About Mark Spitznagel

Mark SpitznagelMark Spitznagel is a stocks and commodities trader, an author and fund manager, born on March 5th, 1971 in Michigan. His forecasting abilities in the realm of investing granted him respect and public recognition.

He is also the author of Safe Haven: Investing for Financial Storms.

“The Dao of Capital Summary”

The Dao of Capital is a book that surely gives a lot of attention to practices, common for the middle ages, and the transition from basic to globalized markets. Using examples from both East and the West, any reader will surely feel the immense heat, and pressure of “ruling” his own kingdom, his financial palace. In other words, you’ll be introduced to Austrian Investments, which are technically built on Dao foundations.

Mark, in the meantime, provides effective oversight of the system, and all the activities, processes and tasks that enable it to function.

Gain to lose!?

No, we are not going to dispatch any messages in a bottle, or through pigeons, but let’s go way back and start our story in the late 19th century. The Austrians, firstly discovered that economics had lots of room for progress, and thus a new way of thinking was established by them. Capital doesn’t merely represent a tool for gaining profits, but a quick turnaround which can also inflict prosperity, even at the cost of momentary loss.

Although Mark Spitznagel claims that this idea was born in Austria, the concept originates from ancient China. Daoism, by all means, unlike any other practice relies on the wisdom that is yet to be seen, yet to be analyzed and discovered.  

Will the day of reckoning come?

Even if this Austrian-Chinese concept doesn’t seem appealing to you, give it one more try. In general, lose money to make money, will never be the first-choice for inexperienced investors. Nonetheless, the paradox is that before you make a living out of investing, you need to fulfill two basic criteria: hate to earn and love to lose money.

Long ago in a far-away land in ancient China, the legend of Daoism was born and tested. Since then, the idea never shifted or was adjusted throughout history because, its roots and elements are relevant regardless of the age.

Here’s what you should consider:

Austrian investors, amazed and thrilled by the potency that follows the Daoist model, embarked on a new financial adventure to resist the temptation of failing in despair after a loss, and or be overjoyed with gains. Instead, let’s twist the obvious into the unexpected and controversial.

Unlike common sense approaches, the quickest route to success is probably the way of risk, where one doesn’t back away from a temporary loss, or cash in on quick wins. Out of instinct, we are trained to operate on these two soils, but “The Dao of Capital Summary” can undoubtedly transform your mindset.

Hold your nerves, until you are in a better position as a negotiator, and win big time!

If the previous illustrations didn’t do the trick – The Robinson Crusoe parable sure will:

As one of the first settlers in remote wilderness, surrounded by water, Crusoe had no other choice than to start thinking about the basics survival elements.

The bottom line is, when Robinson started fishing, he spent countless of hours trying to fill his belly, but he didn’t manage to catch a single fish.

Get our point? – Or should we say Dao’s method?

Instead of going harder, he used its ingenuity and tried its patience to build not one but several improvised fishing tools that will give him the upper hand in the struggle for survival. As you probably assume, his effort bore fruits, even at the risk of dying out of starvation.  

Key Lessons from “The Dao of Capital”

1.      Any calculated risk will ultimately do the trick
2.      Don’t be short-sighted
3.      Divide and Conquer

Any calculated risk will ultimately do the trick

Eventually, your investment will pay off, and that’s the whole key because the name of the game is – long-term benefits. Ford, on the other hand, risked production for the upcoming months in order to improve the process. A risky move that ultimately brought the desired results.

As a consequence of that, every 24 seconds, Ford was able to deliver a brand-new car – an endeavor that stands for guts, and vision.

Don’t be short-sighted

Sometimes, quick losses are in fact win-win situations. Don’t judge too quickly because “losing” represents the foundation for long-term gains. It’s totally worth it! We highly doubt that you’ll end up stranded on a remote island, but the Crusoe’s vision should give you a clue of how essential the mindset can be in various environments, including the stock market – for example.

Divide and Conquer

Literally, any aspect of human culture can apply these laws, even in times of conflicts. The strategy consists of several methods that indicate – You should not provoke an attack or start one, until you are absolutely sure that you can turn the forces of your enemy, to operate against their current ruler. Tricky and efficient, even nowadays!

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“The Dao of Capital” Quotes

Because of the quirks of our human eagerness for the immediate reward, we are forewarned that what seems easy and straightforward is deceptively so; the roundabout is in practice a counterintuitive path—of acquiring later stage… Click To Tweet Although the future remains uncertain, the entrepreneur relies on “specific anticipative understanding,” which “can be neither taught nor learned”; he does not focus on what was or is, but acts upon what he expects the future to… Click To Tweet the roundabout is in practice a counterintuitive path—of acquiring later stage advantage through an earlier stage disadvantage—nearly impossible to follow. Click To Tweet Blaming wild market volatility on the “animal spirits” of the herd mentality takes the focus off where it belongs: on the actions of the government. Instead of functioning as instruments of information, signaling to entrepreneurs how… Click To Tweet

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Our Critical Review

From time to time, we come across books that indeed prove to be life-altering – that’s the case with “The Dao of Capital” as well. Although this book doesn’t fall into the personal development category, it sure does carry the aura of hope.

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Aftershock Summary

Aftershock SummaryThe Next Economy and America’s Future

Ever noticed how everybody’s talking about the rich and the poor, and nobody’s talking about the middle class? It’s time to change that.

Because the middle class is essential for the economic recovery of US. And, in an instant, you’ll find out why.

Who Should Read “Aftershock”? And Why?

Globalization has certainly made the world smaller. And there’s no question that, for the most part, it’s been a great thing. Increased free trade and competition, as well as simplified communication between nations, are only two of globalization advantages.

However, it has its downsides as well. For one thing, it has led to thousands and thousands of lost jobs in the developed world. How you wonder? Well, it’s pretty obvious once you think about it. In order to maximize profits, companies simply transfer jobs to lower cost countries.

What does this mean for powerhouses such as the United States? The old adage has never rung truer: the rich get richer; the poor get poorer. And the middle class, even though it constitutes the majority of the population, is once again left on the margins.

Yes, we’re talking about you. As does Robert B. Reich in “Aftershock”. In other words, if you’re one of those 70% Americans who considers themselves to be part of the middle class – this book is both for and about you.

And if that’s not enough, let us up the offer a bit. “Aftershock” is for everybody who wants a well-defined, step-by-step solution to US economic problems.

About Robert B. Reich

Robert B. ReichRobert B. Reich is an American author, commentator, and professor of public policy at the University of California, Berkeley. He is also a former professor at Harvard University.

Reich has served in three national administrations (under Gerald Ford, Jimmy Carter, and Bill Clinton) and has acted as an adviser to Barack Obama.

He has authored fourteen books and regularly blogs at http://robertreich.org/.

“Aftershock Summary”

If you think that the financial crisis of 2007-8 is a thing of the past – think again! For better or for worse, history tends to repeat itself. And if we don’t learn anything from it, we’ll probably end up making the same mistakes all over again.

So, let us rewind for you a decade or so and remind you of the worst financial crisis since the Great Depression.

It’s 2007, and the world is shocked to learn that the United States is in the middle of an economic crisis. Companies are going out of business. Investment banks are filing for bankrupts. There are even talks of a possible collapse of the world financial system. In a nutshell: if worse, it would have been apocalyptic.

But, how did it get there?

According to the politicians and the analysts, it was the people’s penchant for indebting that did the job. According to Robert B. Reich, however, it was the fact that Americans had to borrow because of the politicians ignoring their pleas for help.

Let’s break this down a bit:

Until the recession – and ever since the 1980s – the US economy showed a continuous upsurging trend. However, the incomes of the middle class stagnated and even started dropping.

In other words: there was money, but it was all going to the rich:

And the rich didn’t spend any of it on creating new jobs. On the contrary: they spent all of it on fairytale mansions and blockbuster yachts. Thus, borrowing evolved to become the middle-class way of blending in. And, before long, things started to get really messy.

Here’s how:

You see, the disparity between the rich and the middle class was enormous to start with. Of course, the politicians didn’t seem to bother. All they talked about was “financial economy”, all the while ignoring the problems of the “real economy”.

Translation: the 1% and Wall Street speculations ran the economy, not the 99% and the consumer demand.

And it got even worse from thereon:

Because the middle class didn’t fight back but simply accepted the state of affairs. And everyone forgot that, as history had taught us, this could only lead to one and one thing only: the total collapse of the system. And it works as hellishly easy as 1-2-3!

At the outset, when one family member doesn’t earn enough money, all family members move into paid work. Then, when this doesn’t work either, everyone starts working longer hours. But the paychecks stay the same, and the prices go higher. Finally, everyone starts borrowing. And, soon enough, everyone lives on other people’s money.

Does it ring any bell?

According to Robert Reich, it should. Because it happened to your great-grandparents in the 1930s, and it wouldn’t have happened to you if you had learned that history lesson. Fortunately, Reich has.

And here are his instructions as to how the government should prevent this from happening ever again.

His idea is simple: a new deal with the middle class is more than necessary:

And the deal starts with “a reverse income tax”, meaning that people who earn less than 50,000 $ per year should receive supplemental pay instead of paying a tax.

The second step is “higher marginal tax rates” based on a person’s earnings. In layman’s terms: the tax rate should increase as the income of the individual rises. If, for example, you earn about 160,000$ per year, you should pay about 40% taxes on your income. However, if you earn 410,000$, it’s only fair that you should pay a bit more, say, 55% taxes.

Finally, the author lists few other government measures that may be as important as these two. The three that stand out are the following. Vouchers for schools depending on household income; carbon taxes in order to eliminate pollution; and health insurance for everybody.

Key Lessons from “Aftershock”

1.      The Rich Get Richer…
2.      The „Basic Bargain“
3.      No Return to Normal

The Rich Get Richer…

Now, who can argue with that? But, as Reich says, it’s not about knowing this – it’s about changing it. Much depends on the government, he says in “Aftershock”. But it also depends on you.

The Basic Bargain

It’s as simple as this: if you don’t have the money to buy things, you’ll just borrow them and you’ll buy the things nevertheless. The economy, however, will eventually collapse because of the excessive debts.

So, the government must make sure that you have the money, by forcing the rich to employ you and give them to you. The good part is that the rich will get some of their money back in due course. Because, once you earn enough, you’ll spend more and more freely.

It’s a win-win situation. And it’s what Reich calls “the basic bargain”.

No Return to Normal

Americans want to be rich. That’s why the middle class has played the rich people’s game for centuries. But, the 2008 financial crisis was the final piece of evidence that the game is rigged. And, according to Reich, that’s about it for the game.

The middle class doesn’t believe the rich as it used to. Unfortunately, this mistrust may lead to revolt and the advent of conservative politics and demagogues. They always know how to use your anger.

Donald Trump happened in 2016. Robert Reich predicted him in 2010.

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“Aftershock” Quotes

The problem was not that Americans spent beyond their means but that their means had not kept up with what the larger economy could and should have been able to provide them. the American economy had been growing briskly, and America's… Click To Tweet Being rich now means having enough money that you don’t have to encounter anyone who isn’t. Click To Tweet Economic bullying takes many forms but almost always preys on individuals and families that have little or no power and are at the mercy of those who do. Click To Tweet Keynes declared capitalism the best system ever devised to achieve a civilized economic society. But he recognized in it two major faults—“its failure to provide for full employment and its arbitrary and inequitable distribution of… Click To Tweet It is still possible to find people who believe that government policy did not end the Great Depression and undergird the Great Prosperity, just as it is possible to uncover people who do not believe in evolution. Click To Tweet

Our Critical Review

“Aftershock” is an informative and easy-to-read book. Written in a down-to-earth language, it’s an in-depth analysis of what has caused the economic crises of the past and an interesting “how-to-stop-them-in-the-future” manual.

Reich’s suggestions for eliminating inequality revolve around the necessity of an interfering government. Regrettably, his “basic bargain” solution is one we may never find out if it’s good enough to work.

Because simply put, Americans would never support governments which will want to implement any of Reich’s reforms. But, who knows? Maybe they should start considering.

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The Alchemy of Finance Summary

The Alchemy of Finance SummaryReading the Mind of the Market

Forget everything you learned about markets.

In our summary of “The Alchemy of Finance” by George Soros, we let you look into the mind of the billionaire, who looks at markets differently than most people do.

Maybe that is the road to success: adopting a new view or at least considering it.

Scroll down to find out what his theory is.

Who Should Read “The Alchemy of Finance”? Moreover, Why?

You must have heard about George Soros and his remarkable career and philanthropy.

If you have, you probably already want to read the book. If you have not, read it anyway!

In “The Alchemy of Finance” he presents his theory which concludes that the markets and the financial system are rigged to protect the interests of the powerful.

Although we can find a great deal of criticism on this book, we recommend it because of its originality and because of the author writes it based on his experiences.

He is honest and talks about the way his opinions have changed over the years and about his forecasting errors. By doing that, he shows that he is preaching what he says: that mistakes are keys to success.

About George Soros

George SorosGeorge Soros is the chair of Soros Fund Management. His charitable foundations give around half a billion dollars annually in as many as 50 countries for projects in different areas of society.

“The Alchemy of Finance Summary”

George Soros once stated that the monetary idea of equilibrium is superfluous to financial markets.

He did not stop there.

He even called it poisonous to traders.

Now, let’s explain this.

Traders make money when they take after trends. In other words, they profit when they accurately predict the expectations of other market participants. Hence, perceptions are the ones that drive the market and not fundamentals.

Trends happen because perceptions reinforce themselves until a point when some shock sends expectations on another path.

Soros clarified that a steady condition of equilibrium can’t exist because changing expectations continually reshape the market.

Soros is an advocate of the idea of reflexivity, which argues that what members think about a circumstance influences the circumstance, and the situation shapes the members’ reasoning.

In other words, their comprehension is continuously flawed because they are trying to comprehend something that is inconsistent. This implies that individuals cannot know their circumstances since those circumstances are dependent upon what people think about them.

At first, it may be hard to grasp, but don’t worry, you will get it.

The most broadly acknowledged financial model in present-day finance is the theory of rational expectations. It recommends that present expectations give a full image of future events. Additionally, it suggests that market costs are efficient, which implies that they consolidate and express the total impact of all accessible data.

Furthermore, this hypothesis proposes that financial markets will push toward equilibrium based on members’ expectations. That is unless some external shock presents new data.

All things included, efficient markets and rational expectations suggest that markets are capable of optimal allocation of resources.

However, the extensive evidence demonstrates this is false.

Why is the rational expectations hypothesis flawed?

Because it proposes that market participants seek after their best interests. However, in reality, they do not settle on choices that are working to their greatest advantage. Instead, they act on what they believe is in their best interest.

They have a blemished understanding, so unintended results follow almost any choice they make.

In this manner, people regularly make choices that turn out not to be in their best interest, despite the fact that they believed they would be.

Key Lessons from “The Alchemy of Finance”

1.      The “Human Uncertainty Principle”
2.      Power Relationships
3.      What is To Be Done?

The “Human Uncertainty Principle”

Humans are the most uncertain thing there is in this world. They build their social reality based on their view and understanding. They make decisions all the time based on no other reason than their beliefs or expectations. Certainty does not exist in its absolute form. So, people act on what they feel or think, and sometimes their actions result in something other than what they expected in the first place.

Power Relationships

There are two types of countries in this world’s financial system: those in the center and those on the periphery. Why is this important?

Well, we will give you one example for illustrative purposes.

International debts are denominated in the currencies of the center countries. This means that center countries to borrow money in their currencies, which gives them the power to use monetary policies to keep their economies stable. Peripheral nations, on the other hand, do not have this liberty because they borrow in foreign currencies.

What Is to Be Done?

The theory of market equilibrium suggests that markets will optimally allocate resources. However, if equilibrium is not what markets are after, there is no remaining reason to suppose that the results will be optimal.

In fact, reflexivity and the already mentioned human uncertainty make sure that equilibrium is unachievable.

As a result, markets move toward instability. They have been unstable and will continue to be unstable. The world may need to find a way to bring stability and morality to the markets by assigning appropriate regulations and institutions.

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“The Alchemy of Finance” Quotes

The markets provide a merciless reality check. Click To Tweet The concept of reflexivity is very simple. In situations that have thinking participants, there is a two-way interaction between the participants’ thinking and the situation in which they participate. Click To Tweet Only when the fundamentals are affected does reflexivity become significant enough to influence the course of events. Click To Tweet Most of the misdeeds of the recent boom fall into two categories: a decline in professional standards and a dramatic rise in conflicts of interest. Click To Tweet The financial markets are very unkind to the ego: Those who have illusions about themselves have to pay a heavy price in the literal sense. Click To Tweet

Our Critical Review

There are many words of skepticism and criticism that we can say about “The Alchemy of Finance.” Soros is subjective when it comes to the arguments with which he disagrees, he fills the book with illogicalities and does not take proper account of work done by psychologist and philosophers in part of the areas that he writes about.

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Fraud 101 Summary

Fraud 101 SummaryTechniques and Strategies for Detection

Fraud has always been present. However, in the past years, it has spread all over the business world, including large companies.

So how can you make sure that your company avoids being a victim of fraud?

Start by reading our summary “Fraud 101” in which we will cover most of the terms that the book offers. You will learn the kinds of fraud, the difference between auditors and criminal investigators, and the changes in fraud targets that occurred during the past years.

Prevention is better than cure. So, we advise you to read on.

Who Should Read “Fraud 101”? And Why?

According to authors Howard Silverstone and Howard R. Davia during recent years, fraud has moved from the margins of the business world to the core of it. In other words, it started appearing in the largest companies out there.

The cases of WorldCom and Enron prove the authors are right.

We recommend “Fraud 101” to every businessperson out there because you can never have taken too many precaution measures.

About Howard Silverstone and Howard R. Davia

Howard SilverstoneHoward M. Silverstone is the founder of a forensic accounting firm. He has written numerous articles on financial fraud.

Howard R. Davia was an author and a certified public accountant.

“Fraud 101 Summary”

No business can entirely isolate itself from fraud.

In fact, companies that think they have immunity, give fraudsters a significant advantage.

Okay, so if that is the case, what makes fraud possible?

Although you may think that some people (or companies) are predetermined to fraud, circumstances are the ones that make fraud possible (or impossible).

For example, the current reform legislation focuses managerial attention on accepting that there is a risk of fraud, and implementing preventative controls and hiring practices.

A while ago, most of the cases of fraud happened in small companies. However, over the years, this has completely changed, and an increasing number of large corporations are a subject to fraudulent behavior.

To be more precise, frauds have gotten more prominent ever since 1997, when earning restatements increased to billions of dollars. Even large public companies got involved in fraud, a fact that now influences almost all industries.

What about fraud victims? What are the costs they bear?

Well, money losses are, believe it or not, the smallest problem. Victims suffer from both direct and indirect costs. When we mention direct costs we talk about the cash lost because of fraud. Indirect costs, on the other hand, can be much more significant. They include job losses, bankruptcies, investors’ losses, and even destroyed communities.

There are three kinds of fraud fighters: criminal investigators, internal and external auditors. We know, they all seem the same to you. So next, we talk about the differences between them.

Criminal investigators are reactive; they are sure that fraud has occurred, and work to gather enough evidence to prosecute a criminal case. Auditors, on the other hand, are proactive and approach their jobs knowing that fraud is possible, but are not judgemental about whether it has occurred.

Sadly, auditors miss fraudulent behavior for many reasons.

First, they may misunderstand the difference between an audit and a fraud investigation. They may be unable to grasp their responsibilities. Furthermore, they may fail to get enough evidence during their inquiries.

They may even face management that has done whatever it could to conceal the fraud.

An audit has the purpose of finding reasonable assurance that a company’s financial statements do not contain material corrections. Hence, audits’ scope is limited, and auditors approach their work assuming that management is honest.

Investigators, on the other hand, begin with a higher dose of skepticism about it all.

Key Lessons from “Fraud 101”

1.      Mistakes Companies Make that Help Perpetrators of Fraud
2.      Stages of Fraud Investigation
3.      Most Important Types of Fraud

Mistakes Companies Make that Help Perpetrators of Fraud

  • Failure to eliminate conflicts of interest in contracts or to segregate responsibilities.
  • Failure to keep careful track of money expenditures.
  • Failure to reconcile accounts.
  • Failure to give auditors and fraud investigators enough resources.

Stages of Fraud Investigation

  • Identify the fraud: search for indicators of the fraud. Once you identify what kind of fraud is in question, choose a relevant transaction and examine all of the documentation connected to it. Track it to its source. If the deal you picked does not show signs of fraud, pick another one and continue the process.
  • Investigate: some types of fraud are hard to discover by merely studying documents. To search these kinds of fraud, you may have to investigate by other means.
  • Gather evidence: When you gather evidence, keep the findings discreet.

Most Important Types of Fraud

  • Duplicate payment fraud
  • Multiple payee frauds
  • Shell fraud
  • Defective delivery fraud
  • Defective shipment fraud
  • Defective pricing fraud

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“Fraud 101” Quotes

The objective of a fraud investigation is to make an absolute determination about whether fraud exists, regardless of whether it is material or immaterial. Click To Tweet An effective internal audit function, with adequate staff to carry it out, is an essential part of any internal control system. Click To Tweet In almost all instances where contract rigging fraud is suspected, contract changes are the keys to the perpetrator’s success. Click To Tweet

”Perpetration Click To Tweet the appearance of legitimacy.” username=”get12min”]

Remember, fraud is first and foremost committed by people, and no amount of internal controls will ever completely remove fraud from a business. Click To Tweet

Our Critical Review

In “Fraud 101” they categorize and explain the different types of fraud, as well as the circumstances that make them possible.

They fill the pages with anecdotes, which makes the book not only intelligible and accessible but also entertaining.

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Fast Stocks, Fast Money Summary

Fast Stocks, Fast Money SummaryHow to Make Money Investing in New Issues and Small Company Stocks

Economy, stocks, brokers, the market. They don’t quite sound like a walk in the park, do they?

But what if we told you that there is a book that makes all these terms a lot more interesting?

Don’t believe it?

Hop in!

Who Should Read “Fast Stocks, Fast Money”? And Why?

Are you a broker? An investor? A businessman? Or perhaps somebody who is interested in and wants to know a bit more about small-cap stocks?

Congrats, you’ve made the right choice!

About Robert Natale

Robert NataleRobert Natale is an expert, a managing director, as well as a portfolio manager. He used to edit the Standard & Poor’s Emerging and Special Situations newsletter for over ten years.

“Fast Stocks, Fast Money Summary”

Are you a businessman looking for some new issues to invest in? Great! Because now is the perfect moment to put your money into some small-cap stocks. You wonder why?  Well, they have never been cheaper in the past thirty years and compared to the large caps the risk is not much higher.

However, you should always take into account the possible risk of an investment, especially if you are willing to take some bigger steps forward.

What’s more, if you are in possession of some stocks, keep in mind that it’s always better to have them in different industries to reduce the possible danger of losing money.

The stocks’ financial value depends on three things: PE ratios, profit, and increasing values.  According to the Rule of 20, you shouldn’t buy any stocks if PE ratios are over twenty, and the interest rates are rising.

But that’s not all.

You should be careful while investing initial public offerings (IPO) because it brings greater risks. However, if you decide to do it anyways, don’t forget that, it’s better to buy in the first three months of the IPO process, or to buy the first IPO of a specific industry.

If you want to make a good deal always take into consideration the pros and cons of the IPO you are interested in. For every IPO there is a prospectus giving you the necessary information, both positive and negative ones, so don’t miss to read it.

To avoid adverse outcome while purchasing stocks, stay away from blind pool IPOs. The problem with these is that there is no clear plan for the money raised from the investors.

So, here is the thing.

More people are interested in buying shares than there are shares on the market. So, if you want to be great at what to do, it is imperative to have a good connection with as many brokers as possible.

It is also essential to make some smart decisions while buying growth stocks. For example, you should always look for growth at a reasonable price (GARP). This means that you should find a company with a constant increase in earning money which is not overvalued.

How to know if the company is worth the money? Just use the Graham and Dodd stock-valuation formula. How to use it?

First, you need to multiply the coming year’s profit per share with the doubled yearly growth rate. Then you multiply this result by 4.4. Finally, divide the result you got with the possible growth rate for the next few years. The final result can help you predict the eventual outcome.

When it comes to buying value stocks, remember that in the long run, it is better to invest in them rather than in growth stocks.

Important to mention is that you shouldn’t always follow the opinion of the market regarding business. Sometimes, some companies deserve to be taken into consideration even though the market doesn’t believe it is a good deal.

That’s why you should always search for businesses which have potential in bringing you money shortly.

Key Lessons from “Fast Stocks, Fast Money”

1.      The risk is inevitable
2.      Everything has its positive and negative sides
3.      The right people can get you the real money

The risk is inevitable

Being an investor is not an easy job at all. Like every other business, it requires a lot of work and knowledge. What is more important is that you need to be ready to take the risk if needed.

This is maybe one of the most uncertain jobs because there is always a possibility to lose everything. Unfortunately, there is nothing you can do about it. You can help yourself by always being prepared for the worst-case scenario.

Everything has its positive and negative sides

While buying stocks don’t forget that even the smallest details about the matter. So, if you don’t want to get yourself into trouble while investing, you should always pay attention to everything, especially to the given risk factors.

If there are more pros than cons, then probably you are on the right track, and you should give it a try. If not, then maybe you should wait for a better opportunity.

The right people can get you the real money

In this business with investing and buying stocks, if you have the right people beside you it is more likely to have a better outcome, just like in every other job. A good relationship with the people who know the best the field can help you grow much more quickly than if you do everything by yourself.

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“Fast Stocks, Fast Money” Quotes

If your time horizon is more than five years, history tells us that small stock ownership is not all that much riskier than owning stocks in general. Click To Tweet Value beats growth over the long run because investors systematically overvalue the growth of well-positioned companies in rapidly expanding industries. Click To Tweet The key to beating the market averages is making small sector bets and picking the right stocks within each industry. Click To Tweet The quality of the lead underwriter(s) is a major clue as to the overall quality of the deal. Click To Tweet The key to successful growth stock investing is not picking the biggest winners but avoiding the big losers. Click To Tweet

Our Critical Review

Even though “Fast Stocks, Fast Money” offers some pretty good advice, it seems like the book is rather intended for newbies, than for experienced and already proven “players”.

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Fundamentals of Enterprise Risk Management Summary

Fundamentals of Enterprise Risk Management SummaryHow Top Companies Assess Risk, Manage Exposure, and Seize Opportunity

One of the most important things you need to know in business is how to manage risk. It is impossible for a company to survive in a completely risk-free environment. In fact, some risks are worthy of taking.

But how can you know which ones? And what does risk management really imply?

Because, we tell you, insurance is not all there is to it.

Continue reading and find out why and how smart companies employ ERM techniques.

Who Should Read “Fundamentals of Enterprise Risk Management”? and Why?

Managing corporate risk entirely and adequately is more than just ensuring against floods, fire, and other environmental catastrophes. Companies frequently have exposure to loss from rapid technological advancement, financial instability, fierce competition and regulatory sanctions.

That is the reason why entrepreneurs started accepting enterprise risk management (ERM) into their operations.

ERM allows them to flexibly define, assess and respond to the corporation’s sum of risks,

Not all risks are dangerous, many of them are worth taking. Companies that have adopted ERM can find out which calculated risks would bring them increased profit and sales, with minimal hazard.

John J. Hampton presents the “Fundamentals of Enterprise Risk Management” and gives you a customizable model of ERM, which can fit each company, no matter its size.

We recommend this to all managers and entrepreneurs out there, who want to find out how they can work smarter, differentiate good from bad risks, and cope with risky scenarios as best as they can.

About John J. Hampton

John J. HamptonJohn J. Hampton teaches business and is a director of graduate business programs at St. Peter’s College. He is a former director of the Risk and Insurance Management Society.

“Fundamentals of Enterprise Risk Management Summary”

Amid the 70s, organizations extended their risk management practices from guaranteeing against risks to propelling inside loss control activities. For instance, they assessed safety changes at assembly plants to decrease accidents happening in the working environment.

Furthermore, a few organizations began to substitute the broader corporate title of risk manager for the more traditional title of insurance manager.

In ensuing years, corporate leaders have continuously put more consideration on corporate risk. Corporate risk does not exist in isolation, but rather an organization’s aggregated vulnerability.

By the late 90s, some enterprises had begun to direct enterprise risk management (ERM).

They did so through reassessments of identified dangers, scans for poorly defined threats and regular examination of commercial possibilities that held more benefits than negative potential.

Nowadays, risk management covers moderating the risk of physical perils, following government regulations, and keeping up internal controls and reviews. However, apart from these elements, powerful ERM frameworks can take up a wide range of forms.

This means that the ideal approach to managing corporate risk is different from firm to firm.

As a result, dealing with the uncountable variety of dangers in the business world is one of ERM’s most noteworthy difficulties. Even inside the same industry, no risk-control formula successfully works for each organization.

Another important thing you should note is that not all risks are the same. There are risks you can accommodate, and there are ones that you should avoid.

To figure out the kind of risk it is facing; an organization must assign an interior monitor, which can be either an individual or a group, to play out the “central risk function.”

What exactly do we mean by that?

This activity includes recognizing and evaluating every one of the hazards the organization faces. The interior monitor conveys material findings to executives and managers, and to those who are doled out to test specific dangers in their area of expertise.

It is vital to create cooperative energy, outline and execute an ERM framework that lines up with your firm’s current division of managerial assignments, so it blends into the business as opposed to troubling its managers with new requests.

Make sure you structure your ERM framework to utilize a similar procedure to survey all risks and to guarantee responsibility among assigned workforce for the way they oversee specific dangers.

Finally, for an ERM framework to work, the top executives must take a role of dynamic leadership during the process of risk determination and management.

Key Lessons from “Fundamentals of Enterprise Risk Management”

1.      Software for ERM Applications
2.      Five Risks That Call for a Team Approach
3.      The Dynamic Risk Landscape

Software for ERM Applications

Big companies frequently install software to support ERM before they implement it in practice. Some ERM software programs enable organizations to create a visual image of risks on the screen, as a helpful tool for monitoring and prioritization.

Managers can use such tools to assess which risks are worthy of taking, to determine the interrelationships among hazards, to mitigate exposures to losses, and document their progress.

Five Risks That Call for a Team Approach

  • Strategic risk
  • Leadership risk
  • Subculture risk
  • Business cycle risk
  • Horizon risk

The Dynamic Risk Landscape

Risks continuously change in size and shape. Some established risks decrease in importance as new ones appear. The emergence of the internet permits new types of misbehavior that expose companies to harm, including malicious hacking into business computer systems and the spread of malicious viruses. Regulatory changes also have altered the risk landscape.

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“Fundamentals of Enterprise Risk Management” Quotes

Enterprise risk varies with the line of business, the nature of the entity, political and economic issues, and other factors. Click To Tweet Organizations must implement ERM to prove its value, but management often expects the value to be proven prior to implementation. Click To Tweet External risks are largely uncontrollable, as they arise from the competitive environment, economic factors, acts of regulatory bodies and other outside sources. Click To Tweet Is risk management an art or a science? Taleb says it is an art because execution is involved. We can replicate scientific efforts. Risk management varies with each challenge. Click To Tweet Strategic risk covers a lack of vision, faulty planning, emerging or aggressive competitors, and the inability to respond to changing conditions in the business environment. Click To Tweet

Our Critical Review

ERM will not entirely eliminate risk. In fact, nothing can completely get rid of risk. However, John J. Hampton notes that a detailed, disciplined approach is critical if you want to make an ERM framework work and give results.

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Supply Chain Cost Management Summary

Supply Chain Cost Management Summary

The Aim & Drive Process for Achieving Extraordinary Results 

It’s rarely a problem when you have a sales increase, but what about your costs?

It’s best if we start from the beginning.

We briefly summarize Anklesaria’s methods and proudly present this comprehensive outline of “Supply Chain Management.

Who Should Read “Supply Chain Cost Management”? And Why?

In reality, the embodiment of team success is finding the gap in a system that creates “tension.” As soon as you overcome that problem, the company should be able to perceive things from a different perspective.

With this in mind, we warmly advise management students, and knowledge seekers to read “Supply Chain Cost Management.”

About Jimmy Anklesaria

Jimmy AnklesariaJimmy Anklesaria is an author, and also a cost-management expert, who over the years shared many insightful tips with the audience on cost-reduction. He was hired by many innovative companies to conduct seminars in order to reveal some of the fundamentals on the subject.

“Supply Chain Cost Management Summary”

Nowadays, companies spend more time trying to figure out a way to reduce costs, then attempting to increase sales.

Such approach isn’t entirely clear, so let’s hit the books and investigate why. In general, we believe almost any person is aware, that cost control is not an optional process, not only it’s mandatory but highly essential.

However, not many enterprises have mastered the technique to control and ultimately reduce them. Regardless of the type, it’s only logical to aim at the decrease, and consequently earn higher profits.

How it all started at IBM:

Right after, things began to get a little rough, Lou Gerstner and Gene Richter both experts in various fields were brought to the company to inspire every organizational layer to apply a new system by which all sectors will become cost-centric.

This resulted in an immediate turn for the better.  The real question is – What was this strategy all about?

The goal was to follow one highly efficient and simple program – the five-step plan known as “The Cost Reducer” because in every step there was the same objective.

Afterwards, the procurement team of experts had no other choice than to really indulge this method, designed by the supply chain expert Gene Richter.

IBM took over the market by increasing their profits and gaining a competitive edge.

Here’s the deal:

Don’t go running around if you don’t have the expertise; it’s always better to rely on outside help, in order to reduce costs in the long-run. The real issue most companies have is slightly linked to their ignorance about the cost structure.

Are you aware that one mistake pulls others, a misleading information can produce supply chain issue and so on?

For that purpose, we present or in this case – Jimmy Anklesaria gives you the “Aim & Drive” process. A great way to start working on cost-reduction – an eight-step process ready to take your supply chain knowledge, to the next level. The ultimate goal is linked to satisfied end-customers at a smaller price!!

Let’s start counting:

  • Agreeing” to foresee and thereby reduce any unexpected costs with a practical supply-chain attitude.
  • Identifying” when new costs give birth to others, and you develop a strategy with your suppliers to collectively deal with this mess.
  • Measuring” also categorized as second-class costs, in other words – not so important.
  • Defining” understanding the cost drivers driven by previously defined strategic options.
  • Reducing,” revamping those processes or activities that are responsible for these costs.
  • Implementing” The new foundation, that you’ll build on – the action plan.
  • Verifying” Approval of the strategy and begin monitoring any unwanted cost fluctuations.
  • Eternally” redesign the cost structure and process selection.

The team of experts especially those in charge of the supply chain, should begin analyzing the project’s feasibility and define goals.

Which directions should you follow?

There are several things that you should not consider doing. For example, what is the purpose of lowering supply chain costs, if in the near future you’ll pump up those numbers by accepting inferior goods or commodities at a greater expense? You have to have a vision.

“Supply Chain Cost Management” suggest each company to track the progress in a specially designed worksheet, where anyone with access can gain insights and up-to-date information.

Key Lessons from “Supply Chain Cost Management”

1.      The recreation of a map
2.      Several ways to measure success
3.      Think twice about cost-reduction

The recreation of a map

First and foremost, any company should focus on mapping those processes which are the greatest contributors to the “cost-table.”

Only then, you can consider about removing some of them, or embark on a full-scale remodeling journey.

In either case, listing all these elements will give you the upper hand in the struggle to cope with cost increases!!  

Several ways to measure success

Generally speaking, to launch an evaluation process, the company must own, possess, installed or have in store, at least one of two systems – allocation or management – based system.

It’s not forbidden to use others, but most firms depend on these.

Allocation systems, on one hand, are highly dependable of applying cost-figures to company’s products or services, while management systems are more open to various types of evaluation models, plenty of alternatives.

Think twice about cost-reduction

Don’t be surprised to know how many companies come to a stage, where they can really put their skills to the test, and then hesitate to act.

Even though they have all the help in the world from both suppliers and customers, they do nothing.

If you wish to avoid a similar scenario, you need to create an effective plan and stick to it, no matter what. Make sure it’s realistic, and feasible so that it speaks on everyone’s behalf – in other words, verify that all employees are comfortable with it.

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“Supply Chain Cost Management” Quotes

The journey of cost management...never ends. I have yet to see a company that sends a message to its supply chain saying, ‘We are making too much money, please stop managing cost. Click To Tweet As strategies are completed...document, to the best of your ability, the monetary savings. Click To Tweet Customer-supplier relationships can become partnerships or strategic alliances where there is a common focus on improving yields at the customer’s site. Click To Tweet The key question to ask about improving a cost driver...is: ‘Will the technology, quality, safety, cycle time, or total cost of the product or service be jeopardized if you achieve the theoretical limit. Click To Tweet The real power of cost management is to know from the creation of a new part, product or service what the true purchased costs are. Click To Tweet

Our Critical Review

This book emphasizes the importance of a relationship, neglected by many – the bond between companies and suppliers. In our opinion, cost-reduction is the topic of the century, so in this case, we believe that “Supply Chain Cost Management” has the perfect material in store – on this problematic.

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