We asked the Rocket Dollar team what their favorite books are and we got a myriad of answers from cautionary startup tales to applying risk assessment principles in everyday life. Check out their recommendations below:
Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou
Reader: Brendan Walsh, Business Analyst
Bad Blood is a cautionary tale about investor due diligence, product design, and startups dealing with regulation. Elizabeth Holmes and Sunny Balwani hyped and defrauded some of the most prolific investors and government leaders with Theranos. (Larry Ellison, Tim Draper, the Walton family, Henry Kissenger, James Mattis, and more) Theranos blood-testing technology that was promised as revolutionary but would take an incredible amount of innovation to be delivered. If you aren't an expert in an area you are going to invest in, make sure to verify those with more experience. Review investment documents and hard evidence instead of taking words at face value. Don't get sucked into hype or fear of missing out on an investment without verification.
Theranos utilized a fast and loose philosophy that had worked for much of Silicon Valley before but did not prepare for the challenges of medical regulation. Holmes cozied up to key government employees instead of building a proper compliance strategy. As questions from the US Military, doctors, and nurses piled up, the investigative reporter that authored this book was able to build a case to expose the company and a fantastic read.
Black Swan: Second Edition: The Impact of the Highly Improbable by Nassim Nicholas Taleb
Reader: Rick Dude, Co-founder and Chief Technology Officer
In his book, Nassim Taleb introduces the concept of "Black Swan" events, which are events highly unlikely, highly impactful, and novel in their nature. These events are intrinsically impossible to predict, and yet must be accounted for as a certainty. The application of this idea in finance is that no investment can be wholly shielded from risk, and that very great opportunities which present themselves must be acted on decisively, as you may have never seen them before and you may never see them again.
The book promotes the idea that the "long tail" (statistical occurrences far from the mean), and not the statistical average, has more influence over the long term as their presentation is rare but violent. Modern examples of Black Swan events that I personally have lived through and seen their impact are 9/11 and the 2008 Financial Crisis. While not specifically a finance book, the Author Taleb spent years working at trading desks, a place where respect for "Black Swan" events on the street can be seen in the fact that even way out-the-money options have a market to opportunists looking to capitalize on the unforeseen at a minimal cost. I highly recommend this book as it brings to light unique ideas that are important in navigating today's modern financial markets.
Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! By Robert T. Kiyosaki
Reader: Thomas Young, Co-founder and VP Marketing
Rich Dad Poor Dad is a story about Robert Kiyosaki and his two dads, his real father (poor dad) and the dad of his best friend (rich dad) and the ways in which their respective views about money and investing shaped Robert’s life.
This book was given to me in high school by my uncle, and it forever changed my view about money. A big takeaway for me personally was the statement that the poor and middle class work for money, while the rich have money work for them. Once that sank in, it wasn’t about how much money you earned, it’s about how much money you keep, that you put to work for you.
One of my favorite quotes from the book is, “Often in the real world, it’s not the smart who get ahead, but the bold.”
An Economist Walks Into A Brothel By Allison Schrager
Reader: Mark Peck, Director Business Development
The true and honest assessment of risk is very difficult for most people to understand and apply to their daily lives. Allison Schrager explores the characteristics of risk and how measured and proactive risk-taking can lead to better decisions. Her economic training enabled her to write this book from an academic and found financial basis; but it's her real-world, real-life experiences that lend color and depth to her statements. The book focuses on the different expressions of risk, and how all walks of life experience and account for it. By better understanding, our own behaviors and how they prepare or disadvantage us against risk is a universally useful lesson.
Whether you're a teacher, a financier or stay at home parent the points made here can help your choices; and how each and every one of them generates risk and results. By understanding and assessing these risks clearly we can make better decisions to achieve our goals, no matter your aims.