In this article, I want to introduce you to six personal finance books that have greatly influenced my life in recent years. These books have completely transformed my perspective on money and time management.
I'll provide a key takeaway from each of these books so you can get a sneak peek into the valuable insights they offer.
1. I Will Teach You by Remit Sethi
Number one: "I Will Teach You" by Remit Sethi. This book's core message is that it's not just about how much money you earn; it's about how you manage and utilize that money that truly matters.
You might have a high salary of 70,000 or 80,000 dollars a year, but if you don't know how to handle your finances, you'll likely find yourself struggling to make ends meet.
One common frustration I've noticed is when people with financial expertise use complex jargon when explaining things to those without a financial background. Sethi avoids this pitfall. He uses straightforward language that anyone, regardless of their background, can understand.
His advice is quite unconventional. He suggests enjoying your daily lattes, leveraging credit cards to your benefit, and not getting too hung up on small expenses. Instead, focus on managing larger financial aspects.
The book's chapters provide actionable steps, such as where to open bank accounts, how to tackle debt, and how to allocate your money among fixed costs, savings, investments, and guilt-free spending.
If you're seeking a practical and actionable finance book, Remit Sethi's book is an excellent choice.
2. The Four Hour Work Week by Timothy Ferriss
Next up is "The Four Hour Work Week" by Timothy Ferriss. This book has played a significant role in my life. If you have even a slight interest in entrepreneurship or business, I strongly recommend reading it.
Ever since I picked up this book, I've gained a crystal-clear vision of my goals and how to achieve them. It's the kind of book I wish I had read a decade ago because it would have influenced many of my decisions.
This book has inspired me to think creatively and question everything I know about productivity, time management, and money. Many of us follow a conventional path: go to school, graduate, secure a great job, work tirelessly, earn a lot, and eventually retire.
But this book challenges that entire system. Why should we work until we're 65 or 70 when we might not fully enjoy that money or have the health to do so? Instead, it suggests spreading those 20 to 30 retirement years throughout our lives.
Ferriss calls this approach "mini retirements" and introduces the concept of the "new rich," which means having control over when and where you work. He explains that the new rich typically have passive income streams that allow them to work as much or as little as they want, from anywhere they choose.
In this book, he offers practical steps for creating these passive income streams, enabling you to live the new rich lifestyle. He also provides advice for office employees on how to achieve this lifestyle while maintaining their corporate jobs.
I've received questions about how I balance side hustles with my full-time job in banking, and a significant part of my success is thanks to the lessons from this book. It's filled with tips and tricks for efficiency, including outsourcing to remote workers, automation, and batching tasks to boost productivity. These strategies have allowed me to explore numerous ideas without burning out.
3. Rich Dad Poor Dad by Robert Kiyosaki
Next on the list is "Rich Dad Poor Dad" by Robert Kiyosaki. You've probably heard of this book many times, and it's a best-seller for a good reason. I included it here because it was a pivotal moment for me, shifting my mindset from being an employee focused solely on income to adopting a business-oriented perspective aimed at generating and building wealth.
The book revolves around two dads: Robert's own "rich dad" and "poor dad," each with distinctly different mindsets when it comes to money. Through the book, Robert explores the financial philosophies of these two fathers.
The "poor dad" had excellent grades, numerous qualifications, and a high-paying job, yet he lived paycheck to paycheck. In contrast, the "rich dad" had a different background and an entirely different approach to money - how he talked about it, how he managed it, how he utilized it, and how he made it grow.
The book takes you on a journey into the financial mindset of these two individuals, making it abundantly clear what distinguishes one from the other in terms of wealth. It underscores that conventional schooling often fails to teach us critical financial lessons - why it's essential to go beyond a day job, the tax implications of entrepreneurship versus employment, and the importance of financial literacy.
The book's most crucial takeaway is the distinction between assets and liabilities. The wealthy invest in assets, while the poor and the middle class often acquire liabilities. Liabilities not only cost money to purchase but also to maintain. In contrast, every dollar invested in an asset becomes a worker for you, generating income even when you're not actively working.
The ultimate goal is to increase your income significantly above your expenses so that you can invest the surplus into assets, which in turn generate more income. This creates a virtuous cycle of increasing cash flow and accumulating more assets over time.
4. The Cashflow Quadrant by Robert Kiyosaki
Next in line is "The Cashflow Quadrant" by Robert Kiyosaki. Consider this book a sequel to "Rich Dad Poor Dad," but it's a bit more advanced.
In "The Cashflow Quadrant," Robert shares the transformative steps he and his wife took to move from homelessness to achieving wealth and early retirement. The book delves into four distinct ways of earning money, which Robert categorizes into four quadrants: employees, self-employed, business owners, and investors.
Many of us are conditioned to become employees or self-employed, as that's how the system is structured. Unfortunately, traditional schooling often fails to teach us about business or finance, and few people learn how to become entrepreneurs or effectively invest their money.
Robert argues that true wealth is found in the "Business Owner" and "Investor" quadrants because of the freedom they offer, primarily through the creation of passive income streams.
Since I graduated, I've primarily been in the "Employee" quadrant. However, I'm increasingly exploring the other quadrants. I've noticed that those around me who have achieved financial freedom and passive income are typically in the "Business Owner" and "Investor" quadrants.
This book emphasizes the importance of being intentional about which quadrant you want to operate in. Just because you're in one quadrant now doesn't mean you can't make a shift, and it doesn't necessarily require a long time to make that transition.
The key is to use your time and money wisely, enabling you to cross over into another quadrant if that aligns with your goals. "The Cashflow Quadrant" equips you with the necessary skills and mindset shifts to make this shift successfully.
5. Think and Grow Rich by Napoleon Hill
Now, let's talk about "Think and Grow Rich" by Napoleon Hill. This book has sparked some controversy due to its somewhat fluffy and airy-fairy reputation, akin to concepts like "The Secret" and the Law of Attraction.
However, I firmly believe that if your mind can conceive it, and you take the right actions to support your beliefs, you can achieve it. The first step in reaching any goal is to possess an unwavering self-belief that you're capable of accomplishing anything.
Over the span of 20 years, the author, Napoleon Hill, conducted interviews with individuals who had amassed substantial fortunes from scratch. He identified commonalities among them and outlines a blueprint in this book for how anyone can achieve financial success.
This book highlights the idea that making money isn't solely about having money to begin with; it's about cultivating the right mindset. Napoleon Hill suggests that becoming wealthy hinges on three crucial elements: desire, a well-thought-out plan, and unyielding focus.
These three principles are timeless and have stood the test of time. While many believe they need the latest gadgets or groundbreaking ideas, it truly boils down to these fundamental principles.
For some, the book's approach might seem a bit fluffy, but it underscores that wealth is primarily about your mindset and less about grasping complex financial concepts and actions. "Think and Grow Rich" has the power to rewire your thinking about finances, making money management and wealth-building a fascinating endeavor.
6. Lean In by Sheryl Sandberg
Lastly, we have "Lean In" by Sheryl Sandberg. The books I've mentioned so far have focused on managing your money and making it work for you to secure financial independence and abundance. Managing your money is essential, but to accelerate this process, you also need to increase your income and revenue.
For many of us, our day job is a significant source of income, serving as the foundation of our financial stability. That's why I recommend "Lean In" by Sheryl Sandberg. While much of today's discourse revolves around entrepreneurship, it's important to recognize that many of us work in traditional jobs. Thus, we need to maximize our opportunities and ensure we receive fair compensation for our efforts.
This book offers valuable advice on advancing in your corporate career. It encourages women to take risks, set ambitious professional goals, build confidence, demand equitable compensation, and aim for leadership positions. "Lean In" is relevant not only for women but also for men who want to support their partners in achieving their career aspirations and understand what it takes.
I'm open to reviewing more non-personal finance books that have significantly impacted my thinking. If you're interested in such reviews, please let me know, and I'll create more articles like this one.
Thank you for reading, and I look forward to seeing you in my next article.