I made one some years back for hiding weed. All you need is a scalpel or box cutter, a thin guide, such as a piece of square wood or plastic, and some of that white glue that sets transparent.
First you want to glue the last 5 or 6 pages together, and glue them to the back of the book, then with your guide and cutter you cut in from the end of the book working towards the start of the book.
You cut out all the squares except the last 5 or 6, and glue them to the front cover, that will be used as a cover. Alternatively, you could leave the first 20 or 30 pages without cutting, so that you can show it off as a working book with pages that turn.
You will need to be patient, as you will be cutting about 500 pages for it to be big enough, and if you rush it, the holes wont line up and it will look ugly. A precise millimeter ruler can be used to make sure your guide is in the same position every time.
Some books work better than others, ideally hard backs with a wide spine. If you use the wrong kind of book it can make it go all out of shape.
EDIT: be sure to not apply too much glue, as it will separate the pages too much, and make the book thicker and strange looking. Ideally, you wont use any glue on the outside edges of the book.