I am sure you throw away or recycle your old phone book every year or so. I came across a 2004 edition just today, and decided to put it to another use. With a few hours time, some wax paper, wood glue, a jig saw, drill, and a few bricks you can too.
Start by taking two sheets of wax paper that are a few inches longer than the phone book. You will insert one sheet of paper about 20 pages from the front of the book, and the other 20 pages from the rear of the book. Slide the wax paper sheets so they are all the way back against the binding and extending around the other three edges of the book. Now close the book and position the book on the edge of a surface so that you can paint the wood glue onto the book, and where the excess glue wont damage anything. I used my trusty outdoor picnic table, as seen here before.
With the book positioned on the edge of the table and a large cinder block compressing the book, I paint the wood glue between the areas that are isolated by the wax paper, along all three unbound edges of the book. Apply the glue so that it covers all of the edges but not so much that it is dripping. Now go fix some coffee, and enjoy a few cups and come back an hour later. After an hour the glue has had time to dry and you can remove the cinderblock and extract the wax paper sheets. Use an box cutter type knife or razor blade to trim the edges where the wax paper might be sticking. With this done you will have a center portion of the book that is now almost board like, with some loose pages before and after it. As you can see, Sally the DIY cat is on the job too.
I used a ruler to mark an area on the inside that is approximately an inch and half from all edges. With this square outlined, and the loose pages folded back, drill through each corner of the outline you just made. These drill holes will be the starting points for your jigsaw. With your saw now carefully cut from drill hole to drill hole until the entire center section of the book is free. There is a lot of paper dust from all of this so this is definitely best done out doors. Throw away the loose pages and clean up the dust you have made before you go on.
Now prepare the book for more glue by lying it on another sheet of wax paper, with the bottom of the book down and closed. The top of the book will remain open. You now need to paint the inside edges with the wood glue, compress with bricks, and then paint the exterior edges one more time. This will bond the back of the book to the cut out portion. Have some more coffee and come back in an hour. Remove the wax paper, trim any rough edge material with your knife and you are done.
Now you can stash you small valuables or what have you in a easy to reach book on your night stand, telephone table, or book shelf. This technique should work just as well on hard bound books also.