Personal Money Management 101 Blog

Cashflow Quadrant is Robert Kiyosaki’s follow-up to the classic Rich Dad Poor Dad. The cashflow quadrant is essentially a cross with the letters E, B, I, S inscribed in each quarter. The letters represent the various ways of generating revenue. On the left are E (employee) and S (self employed), and on the right B (business owner) and I (investor). Read the rest of this entry »

Illusionist Derren Brown recently started a media frenzy in Britain by apparently “predicting” the lottery numbers on live TV. In an alleged explanation of his feat Brown claimed to have averaged the predictions of 24 people, citing Francis Galton’s discovery that the combined estimate of a crowd is often more accurate than any of the individual estimates.

While it’s unlikely this approach can successfully predict lottery numbers, Brown’s trick has introduced a mass audience to the phenomenon explored in James Surowiecki’s The Wisdom of Crowds. Read the rest of this entry »

Wikinomics: How Mass Collaboration Changes Everything by Don Tapscott and Anthony D. Williams describes how the mass collaboration enabled and encouraged by Web 2.0 technologies (including wikis, blogs and the gynormous open-source software movement) is fundamentally changing the way business is conducted.

In the beginning communication was one-to-one, or few-to-few. The advent of mass media (publishing and broadcasting) made it few-to-many. Though cable TV and the advent of the Web (1.0) have been steadily increasing the few, Web 2.0 truly heralds the era of mass communication. Read the rest of this entry »

Black Swan review

On its Spring 2007 release Nassim Taleb’s The Black Swan was hailed as a thought-provoking and radical masterpiece. In the light of recent world events it can be considered prophetic following Taleb’s chapter 14 warning:

” I spoke about globalization… it is here, but it is not all for the good: it creates interlocking fragility, while reducing volatility and giving the appearance of stability… We have never lived before under the threat of a global collapse. Financial institutions have been merging into a smaller number of very large banks. Almost all banks are now interrelated… when one falls they all fall.” Read the rest of this entry »

Nassim Nicholas Taleb

The Hidden Role of Chance in Life and in the Markets

Tempted to entrust your hard-earned dollars to Wall Street’s latest fund management genius? Think twice, warns Taleb, the manager’s success is more likely down to luck than judgement. In fact luck, or rather randomness, plays much more of a role in our seemingly orderly world than we might care to imagine.

Trader and financial mathematician Taleb describes himself as a skeptical empiricist; basically meaning he takes nothing at face value, relentlessly questioning everything dressed as fact. Following his prediction of predicted the current financial meltdown, The Sunday Times called him the “hottest thinker in the world”. According to Wikipedia, Taleb is said to have made a fortune from the crisis. Read the rest of this entry »