ONE CLICK: Jeff Bezos and the rise of amazon.com By Richard L. Brandt – Reviewed

I buy 99.9% of my books through amazon, and have done for many years. Most of my friends and family use amazon for most of their book purchases. It’s amazing to think that such a huge and pervasive company is less than twenty years old.

This short book charts the history of amazon and its founded Jeff Bezos, from his work for a hedge-fund in New York to his starting the company with two programmers in a house in Seattle, and his determination and optimism that his company would be the biggest in the world by doing one simple thing: giving the customers a good service.

At two hundred pages the book doesn’t have room to go into a mass of detail, it charts the company’s rapid rise amid the dot-com bubble, its brief profit to appease investors and its massive investments in future growth and expansion which see profits shrink every year, despite vast sales. Investors in amazon have had a rough time, despite it being the biggest online retailer in the world.

Brandt doesn’t offer much insight, and a Bloomberg Game Changers Special gives you almost as much information, but the book is interesting. Brandt’s crisp journalistic style makes for easy reading, but as the Kindle and ebooks begin to revolutionise the publishing industry, amazon’s major competitor’s in books fall by the wayside, and as the company continues to plough new fields, you can’t help but think the story is far from over.

An interesting book, but without the personal insight into Bezos or the financial and business management insight into the company.

Credit Crunch: A Survivor’s Guide – Savings Accounts

Before you even think about savings you need to remove your debt. It’s highly unlikely you will be able to earn more interest on your savings than you are losing on your debt. Except for student loans and mortgages all debt is bad, it’s a drain on your resources and by resources I mean money.

Think of your money as little workers. Each pound is a little worker. Obviously some of your workers have to go out and never come back, these are the guys paying your bills, they keep you in light and warmth.  You really want your workers to do a good job and come back with some friends who want to join your team, this is what happens when you save money and invest money. Interest, dividend, growth.

The ideal is to live below your means. That’s what Warren Buffett does. Who’s he? My hero and at one time the richest man in the world. He still does pretty good!

Once you’ve sorted out your debts, and you have some money to save go to moneysupermarket.com and find out which savings account is best for you. You’ll need to decide whether to put away a lump-sum or regular payments. The easiest way to save is to set up a direct-debit that takes the money every month on the day you get paid, that way it’s gone before you even realise it. You can build a tidy sum over a couple of years.

Just make sure you pay off your debts first!

Credit Crunch: A Survivor’s Guide – Overuse

Do you wonder who recommends you change your toothbrush every three months? It’s the manufacturers. Those who would benefit most from you changing your toothbrush four times a year. Do you believe them? Until I see scientific evidence to the contrary I am happy to use my toothbrush for a year, or more if it’s still looking good. I use an electric toothbrush and I do take care of it, when you have a £150.00 top of the range Oral B, you look after it! It actually gets treated better than my girlfriend! (She didn’t cost so much!)

Water filters are another thing that can be used more than the manufacturers recommend. Of course they say four weeks will use up the goodness contained in their little filters. Well, that’s based on the filter being used by an average family of four. I’m certainly not average, and I’m definitely not a family of four. I’ll use those filters (instead of bottle water which is about twenty times as much!), for at least six weeks, depending on actual consumption.

Try to overuse things and squeeze the value from every product you use and save those pennies.

Credit Crunch: A Survivor’s Guide – Downgrade your expenditure

There are two simple ways downgrade your grocery shopping.

The first is by downgrading your supermarket. If you shop at Waitrose (you rich bastards!), you need to start shopping at Marks and Spencer. If you shop at Marks you need to start shopping at Sainsbury. If Sainsbury then Tesco. If Tesco then Asda. If Asda then move to Morrisons. Morrisons to Iceland, Iceland to Lidl/Aldi/Netto. If you have the misfortunate to shop at Lidl/Aldi/Netto you need to get a big stick and start mugging homeless people!

Ok, Morrisons might be above Asda, and its unlikely you’ll have all of those options in your area, but remember online shopping.

If you haven’t got the choice of which supermarket you can go to then you can always downgrade your label. A store-branded product can replace a brand name product. All the major supermarkets are getting in on the store value-brand now, even Waitrose. Both Tesco and Sainsbury have three levels of products, Tesco Finest and Taste the Difference being the top level, and the nicest, although sometimes only slightly. But also the most expensive.

The thing to remember when purchasing your food if that no matter how nice and yummy and delicious it is when you put it in your mouth, it all comes out the same at the other end. If that doesn’t induce you to purchase a Tesco’s value lasagne for 89p than I doubt anything will.

But seriously, downgrading your shopping should be taken slowly. Dropping down from a regular Tesco’s Finest menu to the value range will leave you feeling hard-down-by. Ease yourself down the range in small easily manageable increments.

Also, look at other things that can be downgraded. Your mobile contract can be downgraded as long as you are far enough into it, normally about 9 months. If you’re not using your current allowance give your mobile company a ring and reduce your contract.

Insurance can be downgraded, although check carefully that you are still covered for the things that you want to be covered for.

Downgrade your car. Sometimes this can work the opposite way too. A friend of mine purchased a newer car that had a slightly smaller diesel engine, the lower cost of insurance, lower tax and lower fuel meant that it cost £14.00 a month less to run than the older car. That’s including the more expensive hire-purchase costs. Obviously I cannot recommend getting into higher levels of debt, but in this case I can see the advantage. But debt is still bad.

Start downgrading now.

Credit Crunch: A Survivor’s Guide – Seepage, Wastage – Being switch-conscious

Did you know it takes about 40-90 minutes to charge your phone? How long do you leave it plugged in? Once it’s fully charge, which most phones display, you’re just throwing money at the electricity company! Don’t overcharge! This goes for rechargeable batteries (which are much better value than regular ones so invest in some if you use a lot of batteries), electric toothbrushes, iPod (although you’re more likely to plug those into a PC.

Switch off at the plug, seepage means your electricity is draining away. For multiple plug sockets, videos, dvd players, microwaves, kettles that light up, internet routers/modems, anything with a display that is left on, will move that little electricity meter and cost you more money. Unless you use it your plugged in device as a clock turn it off! At the plug! Never ever use standby, it uses almost the same electricity as full power.

You can buy special plug sockets that power down certain PC accessories for you when you’re not using them. But how about not switching on your PC speakers when you’re messing around on myspace or downloading porn! If you don’t need it on then don’t plug it in!

And remember when you’re switch-conscious you are not only being good to your pocket but also to the environment.

Credit Crunch: A Survivor’s Guide – Debt: The Enemy

Most of us have some form of debt.

If you don’t think debt it bad then think about this: the whole entire world went into recession in 2008/9, the main cause of this was debt. Too many people owed too much money and couldn’t afford to pay it back. Debt is always, and will forever be, the enemy.

The list below is not comprehensive, but it gives you an idea of the vileness of the debt. Each one is another layer further into the rings of hell. We start off with the cheapest form of debt, only two of which can be considered acceptable. After that you’re on the rocky road to hell!

Student Loans – From the Student Loans Company or a similar body. The rates on these are based on the rate of inflation, so they cost very little. Unfortunately you are limited by the amount you can borrow per year and you have to be a studying full-time. You don’t have to pay these back until you have a certain monthly income, rather than having to start paying it back as soon as you finish your studies.

Mortgage – Likely to be the largest amount of debt you will ever have (hopefully!). Although it may actually cost you £300,000 to pay off a £150,000 house, mortgages are generally the cheapest form of debt available. But, by overpaying your mortgage you can save thousands. By changing your lender and getting the best deals you can save hundreds of pounds a month, which you can use to pay it off faster, hence saving you several years of debt.

Unsecured Loans – Loan agreements vary, depending on the length of time, the amount you want and the lender. 7-15% is normal for a high-street leader. You can get them for home improvements or buying a new car. Also popular is consolidating credit-card debt.

Credit Card – Get back hellbeast! With rates of 18 to 35% normal, you could be paying off an iPod for 20 years if you only pay the minimum payment. Credit cards are basically a way for banks and merchants to lull you into a false sense of security, and slowly and methodically rob you of all your hard-earned wages.

There is only one reason to use a credit card, and there is only one sensible way to deal with the debt: pay it all off every month. Use a card that has added benefits, such as cash back or airmiles, or BA miles, but always always always pay off the credit card balance every month.

If you already have credit card debt (and don’t worry, it happens to us all) this is the biggest obstacle to have to deal with, and you do that by transferring your balance to 0% interest card for the length of the 0% period and trying to pay off as much as possible, and then moving the balance again once the period is up, preferably to another 0% on balances card and continuing to pay it off. If it’s too large for you to ever be able to pay it off in 18 to 24 months then it would be worth looking at an unsecured loan.

Storecards – The actual devil! I kid you not! Rates for storecards have come down a little in recent times, but 20 to 50% is not unheard of. Some of them do nice introductory offers, which might be worth looking in to, but read the fine print and know what you are signing up for. It could well be your soul you’re signing away! The storecard is the ultimate enemy!

You have to try to work your way out of the debt. The way to do this is to work your way out of the hole. The less you pay to service the debt (overdraft fees, interest, etc), the better off you are.

Try to never get into debt. Having debt means your money is not your own. If you’ve budgeted and you have £400.00 left and you have a load of credit-card bills then that £400.00 won’t last long. Most of what you will be paying back will be interest, which just means you’ll be paying nearly the same amount next month and the month after and the month after that! Don’t fall into the debt trap, and if you do, try to escape as soon as possible.

If you have debt what you are basically doing it throwing your money at your bank manager, or credit card company, or loan company. Throwing it, picking up big piles of cash and throwing it away.

Don’t do it, it’s wrong.

THE SNOWBALL: WARREN BUFFETT AND THE BUSINESS OF LIFE By Alice Shroeder – Reviewed

Despite this being an epic book, I expected more.

How can you sum up the Oracle of Omaha? The most successful investor in the history of investing?

For a man over seventy years old, having his life described in a little over 700 pages gives us about a 100 pages per ten years. Even though the first page is so awash with description (of Buffett sitting in his office) that it’s difficult to read, what we don’t get in the full Warren Buffett. We get a version, the tight-fisted, thrifty, intelligent, teacher, who’s more at ease with numbers than he is with human beings, and certainly more comfortable dealing with a class room full of students than he is with his own children. A man obsessed with making money and keeping it. To the point where much of the time his family acted almost, but not quite, as a distraction, and Buffett doesn’t particularly like distractions.

The failure of this book is the lack of detail about some of Buffett’s investments. Probably the most important part of his life, not only for him but also for most of his readers. We get the glamorous stuff, and we also get the dirty stuff, but where’s the detail of the stuff that made him his money?

Most of the information contained in the book can be found on Buffett’s wikipedia entry. The details of his earlier life are interesting, and the milestones he achieved in his early years are quite extraordinary. But I want a map. I want to see what he invested in, at how much and why: I want a description of how he made his billions. I don’t understand how a book so huge and detailed about Buffett’s life but be so bereft of such important details.

For a financial analyst Shroeder doesn’t seem very interested in the money.

This is certainly an interesting book, and Warren’s life as a self-made man certainly holds your attention. But the missing details of his investments, the things that are skipped over, or just not even mentioned, serve to give us only half an image of this great investor.

Buffett is still my hero, with the knowledge gained from this book even more so. We share much in common, he had a paper-round, as did I. Buffett was making money as a child, as did I, once getting in trouble at school for telling my friends toys. Buffett also skirted a bit too close to the law, well, I’m refusing to comment on that! He was also buying shares before he was sixteen. I bought shares in my mother’s name because I was too young to have them in my own. Unfortunately, and I really don’t know what happened (perhaps discovering horror novels), but our paths diverged and I’m not a billionaire.

This is a personal and probably the most detailed of the books on Buffett, and yet it still doesn’t manage to capture the complete man. It does capture most of him, and it’s a moving story, but I almost feel short changed.

Amazing book, and yet still slightly disappointing.

Credit Crunch: A Survivor’s Guide – Shopping Intelligently: Part 2

We’re talking about groceries here, if you’re even thinking about any other kind of shop you need to stop right now. Unless you can’t eat it or drink it, or need it for washing, then don’t buy it.

Never ever go shopping without a list. Big mistake. Also, have something to eat and drink before you go, so you won’t be tempted to buy yourself a snack (this is my biggest problem, I go to buy myself some lunch and eat up with £20.00 worth of crisps, biscuits and chocolate!).

Stick to the list!

You will need to buy essentials, food, drinks, cleaning stuff, washing powders, you know the type of thing. Check out the offers, half price and buy one get one free (BOGOF) are the best. If they have something you will use, shampoo, shower gel, frozen pizza, toothpaste, get double you normally would. If it’s something you use all year-round such as shower gel, then stock up when it’s BOGOF. I recently bought sixteen bottles of Original Source Shower Gel in Tesco when they had a BOGOF offer which will keep me going for several months, at half the cost.

It’s important you don’t get carried away with offers. Never buy anything you might use just because it’s on sale, only things you will definitely use and are on your list.

If you do internet shopping it’s much easier to check all the offers, it’s how I choose half my shopping.

It’s also worth changing your supermarket once in a while. The big supermarkets will often send you a discount voucher to use online to entice you back, if you haven’t been there for a couple of months.

Shopping intelligently is about not buying more than you need, making offers work for you, and adding value to every purchase.

Credit Crunch: A Survivor’s Guide – Shopping Intelligently: False Economy, it’s not cheaper!

Don’t buy smaller than you can use.

A small tub of butter/spread is more expensive than a large one in terms of weight (per gram the smaller tub is more expensive). If you’re going to use a kilo tub before it goes off, which is fairly likely, then you are better off buying the larger one.  Buying the smaller one because it’s cheaper (although more expensive per gram, and therefore worse value) is false economy.

This works for almost all products, and supermarkets are now being quite helpful by giving the price of items and the grams, rolls, sheets, litres, cost.

Buy sixteen or eighteen rolls of toilet paper rather than four. (Can save £2.00 a month on average)

Buy a five-litre bottle of mineral water, or a six-pack instead of individual bottles. If you need to use smaller bottles for work or ease of use, buy a big one and a funnel and pour it in. Ok, so it’s slightly more work, but it’s less money. The average family can save over £100.00 a year by giving their kids small bottles filled with water from larger bottles. (Of course investing in a water filter jug and several filters will be even cheaper, it costs about 2p a litre. If you live in London and have to drink the hideously cloudy and foul-tasting recycled liquid, it may take a while to get used to it after Evian [trust me!]).

This also uses less packaging, which is good for the environment. Good for the environment can be good for you!

Use this technique for everything that doesn’t have a short shelf life, soft drinks, bottled water, toilet rolls, butter/spread, tinned goods, frozen goods. Doesn’t work so well for short-life products like milk, but work it out. If you can use a six pint bottle then it’s still better value than a four and a two pint, or three two pints.

You can save hundreds of pounds shopping this way.

Credit Crunch: Saving money without going without. The no pain savings plan.

You need to start thinking about how your money is spent and being aware of waste. Most of the things I’ll mention are just common sense. All of us waste money to a certain degree, and don’t think you don’t. If you are paying more than you should for something then that’s a waste. If you’re using something you don’t need to use then that’s a waste. If you can cut out as much waste as possible and live more efficiently then you will save money.

Get loyalty cards for everywhere that offers them for free, Sainsbury, Tesco, Iceland all offer loyalty cards. What better way of saving money than getting something for free, even if it is only one week’s worth a shopping a year, it all adds up!

Turn the light off when you leave a room (providing no one else is in there!). This can save you upwards of £5.00 a month.

Use Energy Saving light bulbs, good for the environment, good for your wallet! (can save you another £5.00 or more a month).

Reuse plastic bags, particularly in Sainsburys (where you can receive nectar points for using them) and Tesco (where you get clubcard points). (Can gain you £1.00 or more a year depending on how many shops you do a month).

Put on a jumper when it gets cold. Ok, so when it gets really cold you need to put on your heating, but only use your central heating to heat, then turn it off until the temperate gets low again, then turn it back on. Set your timer for the minimum time you need it and make sure you never have it on when nobody is home. (can save £20.00 or more).

Never put things on the radiator to dry! It will suck the into the wet towel and the room will not be as warm as it should be!

If there are rooms you don’t use, such at the hallway or spare room, shut those doors and turn off the radiators. Don’t heat rooms you don’t need to. It might also be worth turning it off in the kitchen, normally when you are in there (whilst cooking) it’s warm enough.

Go to bed early. Not only will you benefit from all that extra sleep, but you can turn off the lights and heating while you’re in bed.

You think that’s all a waste of time? That little lot could save you over £500.00 a year!