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This is part four of my time with 10 Days to Faster Reading, a book on the Personal MBA Quick Start reading list. If you haven’t read the previous entries, part one, part two, and part three.

Day 4, Revving Up Your Concentration

This day’s text begins with “This chapter is going to be a lot of fun.” It wasn’t. But, it was much more important to me than being “fun.” It was enlightening. It was during the reading of this chapter that it occurred to me that faster reading, along with better comprehension, is definitely possible for most people.

By practicing the techniques outlined in the first four chapters of the last month, my reading skills have improved. I’m reading a little quicker, and maintaining, if not improving slightly, my level of comprehension. Last month!? But doesn’t the title say something about “10 days?” Of course it does. But I’m not so sure that a tool per day is an appropriate amount of time to practice each of the tools mentioned at the end of each chapter. So what is? Well, it depends on the person obviously, but I believe the knowledge gained from each lesson should be put into practice for a sufficient amount of time before moving on to the next. Possibly a week, or at least a couple of days of reading using the methods described.

Topics in this chapter include stopping on key words, eye exercises, and reading for thought groups. The “stopping on key words” is the most interesting to me. I believe the following explains this the best:

Think about what would happen to your reading if you could read, or stop your eyes on, five words out of eleven while still understanding what you read. The result? At least a doubling of your reading speed.

Take the following sentence for an illustration on key words: “The task is defined by a series of steps and elements.” All key words are italicized. The usually longer and important words provide most of the meaning of a sentence. Focus on these words and improve your reading speed. What this also does, and is probably even more important for me, is it helps keep you concentrated on the reading material.

The tool of the day is referred to as “the two finger pull.” For this tool, place both of your index fingers on opposite sides of the text. As you read, slowly, but continuously, move your fingers down the page of text.

I’m liking this tool so far. Anything that engages and prevents the mind from wandering is a great thing (in any task).

This is day 3 of my time with The Lazy Person’s Guide to Investing. If you haven’t already, you might also want to read day 1 and day 2.

Part Three: Six More Boring, Lazy Portfolios for America

This book is beginning to get boring. We’ve already covered the main topics. Save. Diversify your investments while avoiding market timing. Buy and hold those investments. And now we’re driving point of basic portfolio management. In part three, Paul Farrell shows that many other “lazy portfolios” are merely derivatives of the Couch Potato Portfolio discussed in detail in part one.

There are two pieces I want to re-print here, two that I found incredibly important. The first is a recollection of an old story from Napoleon Hill’s Think & Grow Rich:

As I recall it, the members of the parish were delighted that they had a new preacher. But after a few weeks, they were getting worried. The reverend had delivered the exact same sermon his first three Sundays at the pulpit. And after the third time, nervous eyes darted back and forth across the aisles as parishioners wondered if they’d made a mistake. Telephones were ringing off the hook as rumors kept flying — did we hire someone with some kind of memory problem?

Finally one of the deacons got tapped for the uncomfortable task of confronting the new minister. He arranged a private meeting in the parish rectory. He was mighty anxious: “Reverend, I … that is, we … well, sir, you see … the deacons were wondering if you were aware that you’ve been repeating the same sermon the last three Sundays?”

“Yes, I am,” the new minister replied through piercing eyes, “and I’ll keep doing it until they get the message.”

That story makes me giggle. Simple concepts take so long to truly understand. If they didn’t, one should easily be able to stop reading after the first part of this book. And the next piece, Scott Adams’s one-page book on personal finance:

1. Make a will.
2. Pay off your credit cards.
3. Get term life insurance if you have a family to support.
4. Fund your 401(k) to the maximum.
5. Fund your IRA to the maximum.
6. Buy a house if you want to live in a house and can afford it.
7. Put six months’ expenses in a money market account.
8. Take whatever money is left over and invest 70 percent in a stock index fund and 30 percent in a bond fund. Buy them directly from the fund company and never touch them until retirement.
9. If any of this confuses you, or you have something special going on (retirement, college planning, tax issue), hire a fee-based financial planner, not one who charges a percentage fee based on your portfolio’s size.

The rest of part three explains why Vanguard is such an awesome company for index fund investments (HINT: LOW EXPENSE RATIOS!).

It’s okay to be an average investor. Try to do better and you’ll do far worse. Some will take the challenge and learn enough about investing and be magnificent enough to truly beat the market. Those are the exceptional few. Many others will also take the challenge and let their emotions or intellect get the best of them, only to fail like so many before them. Sometimes it pays to be average. Investing is one of those times.

For the adventurous, you can have a piece of each pie. The common practice is to allocate 90% of your investment money to safe, diversified investments. The other 10%? Speculative ventures. If you’re in the group that believes you can beat the market, use that 10% for 10 years to discover how you fair. You’ll know then if you should reallocate and change up your overall investment strategy. Otherwise, keep to the 90/10 ratio.

Part two of The Lazy Person’s Guide to Investing discusses the “six laziest strategies” to “find more time for the important things in life.” Each strategy is discussed in a separate chapter. The discussions include examples that clearly demonstrate the effectiveness of each. The six strategies discussed are:

1. Market timing: avoid it.
2. Saving and frugality.
3. Compounding: there is no greater power known to man.
4. Diversify. Yes, it’s okay to be average.
5. Buy and hold. And hold. And hold. And hold.
6. Do it yourself.

The investment aspect of personal finance really comes down to just a few simple steps. Research index funds for investments that you would like to hold forever (and only draw out of for retirement). Save as much as is comfortable for the investments. Do it regularly; every paycheck, or every month, and make investing automatic. And start now. Like, right now.

You can read more about my thoughts while reading The Lazy Person’s Guide to Investing on Day 1.

Introduction

The Lazy Person’s Guide to Investing, “a book for procrastinators, the financially challenged, and everyone who worries about dealing with their money.” I’ll refer to The Lazy Person’s Guide to Investing from now on as TLPGTI. TLPGTI was written by Paul B. Farrell, J.D., Ph.D., a columnist for CBS MarketWatch. This day 1 post covers part 1 of the book (chapters 1-4).

Investing is very, very easy

TLPGTI teaches us that “investing is very, very easy.” The first part of the book is dedicated to “America’s three laziest portfolios”:

1. The Couch Potato Portfolio
2. The Coffeehouse Portfolio
3. The No-Brainer Portfolio

I’ve long been looking for a book with straight-up investing advice. Individual stock recommendations are a bad idea, but index funds? YES! Diversity and proper asset allocation make smart (and lazy) people rich (slowly, and in the long run). Too many parenthetical notes? Maybe. (Index funds are cool.)

The point that TLPGTI makes is obvious: investing is simple. Don’t make it complicated. Start now if you aren’t already. And if you already are “investing” and you have a complicated portfolio of common stock and you’re constantly worried about the value of each? There’s a simple little acronym I subscribe to: KISS (Keep It Simple Stupid). Get out of your stocks (when it makes sense to) and learn a little about no-load index funds as discussed in TLPGTI and referenced in the portfolios below.

The Couch Potato Portfolio

The Couch Potato Portfolio was created by Scott Burns, a syndicated financial columnist with the Dallas Morning News.

1. 50% — Vanguard 500 Index (VFINX)
2. 50% — Vanguard Total Bond Market Index (VBMFX)

Introduced in 1991, the Couch Potato Portfolio was back-checked from 1973 through 1991. During that time, it performed with a 10.29 percent average annual return, an incredible return given the 1982 bear market and the crash of 1987. From 1991 to 2001, it continued to perform at basically the same rate with a 10.37 percent average annual return.

If want to be more aggressive in your investments, the Sophisticated Couch Potato Portfolio may be what you’re after. Invest 75% in the Vanguard 500 and 25% in the Vanguard Total Bond Market. Less aggressive? 75% in bonds, 25% in stocks. Or, use other similar percentages depending on your situation. It’s damn simple.

The Coffeehouse Portfolio

The Coffeehouse Portfolio was created by Bill Schultheis in 1998. Bill is a former Salomon Smith Barney broker turned financial adviser. He wrote a book on the coffeehouse investing strategy, titled The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life.

1. 10% — Vanguard 500 Index (VFINX)
2. 10% — Vanguard Large-Cap Value Index (VIVAX)
3. 10% — Vanguard Small-Cap Index (NAESX)
4. 10% — Vanguard Small-Cap Value (VISVX)
5. 10% — Vanguard International (VGTSX)
6. 10% — Vanguard REIT Stock Index (VGSIX)
7. 40% — Vanguard Total Bond Market Index (VBMFX)

The Coffeehouse Portfolio returned an annual average of 11.42 percent from 1991 to 2001. While having the highest rate of return among America’s three laziest portfolios, it has the steepest of investment minimums with an amount of $30,000 dollars (more on that later).

The No-Brainer Portfolio

The No-Brainer Portfolio was created by William Bernstein, a financial adviser to high-net-worth individuals, SmartMoney columnist, and author of two books, The Intelligent Asset Allocator and The Four Pillars of Investing. He also happens to be a physician and practicing neurologist.

1. 25% — Vanguard 500 Index (VFINX)
2. 25% — Vanguard Small-Cap Index (NAESX)
3. 25% — Vanguard European Stock Index (VEURX)
4. 25% — Vanguard Total Bond Market Index (VBMFX)

There is also the Coward’s No-Brainer Portfolio (more conservative asset allocation):

1. 40% — Vanguard Short-Term Investment-Grade (VFSTX)
2. 15% — Vanguard Total Stock Market (VTSMX)
3. 10% — Vanguard Small-Cap Value (VISVX)
4. 10% — Vanguard Large-Cap Value Index (VIVAX)
5. 5% — Vanguard European Stock Index (VEURX)
6. 5% — Vanguard Pacific Stock (VPACX)
7. 5% — Vanguard REIT Stock Index (VGSIX)
8. 5% — Vanguard Small-Cap Index (NAESX)
9. 5% — Vanguard Emerging Markets Stock (VEIEX)

Thoughts

There is a small problem in a beginning investment strategy with Vanguard index funds: a $3,000 minimum investment per fund. There is a $6,000 up-front cash need to even begin with the Couch Potato Portfolio.

If you happen to have $30,000 sitting in a bank account that you’re ready to invest, go straight for the Coffeehouse Portfolio. But, if you’re like most people and don’t have a dime invested, here’s how I would begin if I had to start all over:

Save. Don’t be stupid and stuff cash under your mattress. Put your savings in a bank, and not just any bank, and not just any account. Place your savings into a high-yield earning savings account. ING Direct is a wonderful choice.

After saving enough to make the minimum investment into the 50/50 Couch Potato Portfolio, set-up an account with Vanguard and make the investments. Set-up your accounts to invest as much as you can towards your Vanguard accounts automatically each paycheck.

My plan is to transfer my current Roth IRA account to Vanguard when the time is right (I believe I will have to sell off my current investments within the Roth IRA first). When everything is sold off, I’m going to start my Vanguard investments with the Couch Potato Portfolio, at 75% VFINX, 25% VBMFX. I will continue automatic investments into the funds every two weeks — that’s 26 times a year (next year, 2009, the maximum for Roth IRAs will hopefully be greater than $5,000, so this won’t be an issue). Once I have enough money to reallocate according to the Coffeehouse Portfolio, I will do so, selling off portions of VFINX so I can re-invest in the other funds as well.

This is day 2 of my time with Lead the Field. If you haven’t already, you may want to read day 1.

Chapter 2, Acres of Diamonds

If we’re talking about acres of diamonds, then we must look to Russell Conwell. Russell Conwell is responsible for the well-known speech entitled Acres of Diamonds. In Lead the Field, Earl Nightengale sums the moral of the story well. I’ll provide a summary too, but this is the type of lesson most people need to listen and think about many times before they finally fully understand. I know I’m one of those people.

The grass is always greener on the other side, right? Has it ever crossed your mind that it’s because that grass is getting better care? We must fully explore what opportunities lie right before us, else be lost in this world, continually chasing one opportunity to another. We need to take the time to thoroughly explore the working in what we’re now engaged, and to explore ourselves — we may find everything we’re looking for right there.

You can download Acres of Diamonds on Project Gutenberg.

Lead the Field

Introduction

Lead the Field by Earl Nightengale is an audio program about human potential, a how-to on developing yourself into a more successful person with a more fulfilling life. The audio program is part of the Quick Start section of the Personal MBA.

Chapter 1, The Magic Word

Attitude. The magic word is attitude. It is our attitude towards life that determines how we experience the world in which we live. Success or failure is not a matter of luck, fate, or who you know. You determine your own success from your attitude.

Unfortunately, most people act as chameleons. They respond to external stimulus, waking up in the morning with a neutral attitude, only to be swayed from good and bad moods from daily events experienced throughout the day. If something bad happens, they respond with a good attitude. Something bad happens, and they respond accordingly.

But does it really have to be this way? Can’t we just control our own attitude? It should be possible to work through bad events with a good attitude, shouldn’t it?

According to Earl Nightengale, yes, we can control our attitude. If the world you experience is a reflection of your good attitude, then bad events aren’t all that bad, and good events are even better. But how in the world are we supposed to control our own attitude?

Mr. Nightengale gives us an interesting test at the end of the chapter: treat every person with whom you come in contact as the most important person on Earth.

Thoughts

How do we control our own attitudes? How do we accomplish anything that requires skill? I believe the answer is in Mr. Nightengale’s test. Practice!

Ever since I can remember, I’ve never believed much in luck. If luck is what happens when preparedness meets opportunity, then it’s no wonder that I’ve never believed in sitting around, just waiting for things to happen. What I do believe: you are ultimately in control of your life — so get to work and make great things happen.

If we ultimately get what we expect, expect great things. Expect to be successful. Expect to be whatever good thing you want to be. It can’t hurt — not with a good attitude.

This is part three of my time with 10 Days to Faster Reading, a book on the Personal MBA Quick Start reading list. If you’d like, you might start with part one and part two.

Day 3, Revving Up Your Concentration

The third chapter is all about concentration. I forgot everything already because I was too busy thinking about a million other things when I was reading the chapter. Like, what type of ice cream flavor I would get if it were my last. Or possibly what type of hamburger I might like if I were to go to McDonald’s for lunch tomorrow. I must be hungry.

Anyway, let’s concentrate on the topic of concentration. Abby Marks-Beale lists ten top distractors of concentration (you could probably guess most of them — phones, email, reading stupid sites such as this one) and follows up with ten helpful ideas to get you “on the focus track” (you can probably guess most of these too — alone time, classical music, short breaks every 20-30 minutes). So let’s instead get to an important topic discussed in this chapter.

Choose your reading material carefully. You can save a lot of time by reading only what is useful. Why are you reading a particular piece, and what will the information be used for? If you can’t come up with good answers for both — toss it, it’s a waste of time. Your concentration will improve because you’ll be reading only material that has importance to you.

The same can be said for other aspects of life. Keep only what is useful — eliminate clutter. Eat only what is useful — avoid eating too much and avoid junk food. Do only what is useful — stop wasting valuable time doing stuff that has no true purpose. Do you actually enjoy those seemingly meaningless tasks you perform at work? Talk to your boss about it, or have him/her talk to their boss about it. It may be meaningless indeed. But I digress (having trouble concentrating, my location may be too comfy).

The tool of the day is the “right-side pull.” I guess Marks-Beale was stretching for a specific number of tools, because this is the same thing as yesterday’s reading tool, the “left-side pull.” Now you are putting your finger or pen on the right side, slowly but continually moving down the column.

I feel like I should end these entries with something important, like “JustAJot reminding you, help control the pet population, have your pets spayed or neutered.” Maybe. Maybe not. Concentrate.

This is part two of my time with 10 Days to Faster Reading, a book on the Personal MBA Quick Start reading list. If you’d like, you might start with part one.

Day 2, Rebuilding Your Speed Reading Engine

Abby Marks-Beale maintains a racing car analogy throughout 10 Days to Faster Reading. It’s helpful, maybe a little tiring at times, but helpful. This partly explains the title of the second chapter.

Rebuilding Your Speed Reading Enginge discusses the differences between an efficient versus inefficient reader. This is essentially broken down into active habits versus passive habits. An active, engaged reader proves to be more efficient, meaning that the reader moves through material quickly with good comprehension. A passive reader often has many habits that don’t contribute to the efficient comprehension of the material — mind wandering, regression, and subvocalization.

One of the best ways to reduce mind wandering, regression, and subvocalization is — to read faster.

Simply reading faster without knowing how to read faster is going to get you into trouble if you have passive habits opposed to active habits. You almost have to “unlearn to re-learn.” Borrowing Marks-Beale’s racing car analogy, you’ll probably crash if you try to start driving that car too fast without first learning how.

The tool for this section is the “left-side pull.” The left-side pull involves moving your hand down the left-hand side of the page as you read. Keep it constant — that’s it.

10 Days to Faster Reading

Introduction

10 Days to Faster Reading by Abby Marks-Beale and the Princeton Language Institute is a how-to book on speed reading. The book exists in the Quick Start section of the Personal MBA. The Personal MBA is essentially a great list of business books, and books are meant to be read, right? It doesn’t take a genius to put the two together — it’s an excellent starting place for the Personal MBA, and I’m really glad Josh Kaufman included a book on this topic. By the way, there is also an excellent article available by Paul N. Edwards — How to Read a Book (PDF).

I’m still unsure of my opinion on speed reading in general — of whether it is effective or not. Previous dives into the subject of speed reading have led me to believe that reading quickly is more about having interest in the text more than anything else.

For example, have you ever caught yourself engrossed in a good book or article? Notice how fast you were reading? Was it noticeably faster than what you are reading RIGHT NOW? Probably. And this is my point. It is natural to read interesting text faster than the typical crap you are pretty much forced to read.

Anyway, on to what I’ve learned for the day.

10 Days to Faster Reading: Zip Through Books, Magazines, and Newspapers. Understand and Remember Everything You Read! Self Improvement In Only Minutes a Day!

Everything on the front cover of the book seems to be what speed reading is all about: read faster, comprehend better. Abby Marks-Beale explains this further in the introduction. The book doesn’t say that there is one best way to read, instead, it introduces you to a variety of strategies you can use to further improve your reading and confidence in reading. 10 Days to Faster Reading focuses on methods for non-fiction reading, noting that with fiction reading, speed shouldn’t matter.

Day 1, Putting the Key in the Ignition

Marks-Beale begins with a number of benefits to increasing your reading speed:

• Read more in less time
• Improve your concentration
• Understand material with greater depth and accuracy
• Retain information better
• Enjoy reading more

Again, the hallmarks of speed reading. The author also lists personal benefits of reading faster. I’m not going to list those, because I’m sure you can think of a number of things you could do better if you were able to read faster.

One very important idea Marks-Beale mentions is attitude. Like it is with learning any other new topic, attacking with the right attitude is key. You also have to realize that you’re human and aren’t going to be able to learn material as fast as Johnny Five from Short Circuit. And if you haven’t had any reading training since grade-school, it’s that time if you have any interest in improving your reading skills.

Each day (chapter) includes a time trial. I actually took this trial almost a year ago, when I first purchased the book. You know I never finished it. And this is one of my reasons for writing about everything I’m reading in regards to the Personal MBA — to stay on course — to follow through. Anyway, the results for my first time trial were as follows:

• 1 minute, 12 seconds
• 80% comprehension
• 345 WPM

According to the book, good comprehension is between 70 and 90 percent. 200 to 300 WPM is average, 300-400 good, and 400-500 above average. Looks like I’m doing pretty good so far (or at least I was a year ago).

Each chapter also includes a section on tools to help you read faster — pacers. This chapter’s pacer is a white, 3×5 index card, or blank back of a business card. Placing it on top of the lines you read prevents regression and helps you “pace” your reading speed.

This concludes Day 1 — I’ll be posting my thoughts on the next chapters soon.