Reading is essential for those who seek to rise above the ordinary.
Jim Rohn
Rich Dad Poor Dad
Written in 1997 Rich Dad Poor Dad is becoming a classic. A lot of fans call it the “purple bible” and it is often the number one book recommendation of real estate investors according to the Bigger Pockets podcast. The author Robert Kiyosaki tells his story growing up about his real dad who is highly educated. His highly educated dad however is not the rich dad. The rich dad is his friend’s dad who specializes in business and entrepreneurship.
The stories are interesting and easy to read. It is often a book that makes a light switch turn on for people. It explains difference between assets and liabilities and the common traps that people fall into. The book is also a great motivator to pursue financial freedom.
The Richest Man in Babylon
The book is a collection of parables set 4,000 years ago in ancient Babylon. It is a story of a poor scribe who went on to become the richest man in Babylon. It was written almost 100 years ago and it reads with an ancient style.
The book has great principles that still hold true today. The richest man in Babylon, Arkad, tells his story to his old friends about how he became rich. The two friends perform back-breaking work each day but over time find themselves with no savings—a situation that a lot of people face today.
He explains the following Seven Cures for a Lean Purse:
- Start thy purse to fattening: save 10% of income
- Control thy expenditures: spend less than you earn
- Make thy gold multiply: invest your money to earn compound returns
- Guard thy treasures from loss: don’t fall for get rich quick schemes and use insurance
- Make of thy dwelling a profitable investment: buying versus renting your primary residence
- Insure a future income: retirement plans
- Increase thy ability to earn: increase skills to be paid more
Think and Grow Rich
A classic in business and personal finance. The book does not necessarily give financial tips or tricks, but it does give you the right frame of mind to have for acquiring large sums of money. It is more of a philosophy book, published during the Great Depression.
The author follows individuals who at the time amassed fortunes and he tells all about their habits and states of mind. They are laid out in the 14 principles of the book by chapter.
Bob Proctor loves the book and says he reads it every day. He keeps on reading and listening to the book over and over. It is the reason he is successful and he now teaches the principles to businesses.
The Automatic Millionaire
This book is for the set it and forget it type. Even if you are more hands on, the book teaches you some great tips. Automating your finances will ensure that you don’t miss payments—this helps your credit score and overall financial health.
The author David Bach talks about the “Latte Factor” and shows how you can have a great retirement by cutting out some wasteful spending. The book uses similar principles as the Richest Man in Babylon like saving and investing, but it gives a more modern approach. The automation is really key especially in today’s fast paced environment where it is easy to miss a payment here or there.
The Simple Path to Wealth
J.L. Collins lays out a simple plan to amass wealth in someone’s lifetime. He has a great voice so if you are more inclined to listen to a book than read, he will not disappoint.
The book lays out simple ways to invest money so you have more time focusing on the important things of your life. The financial world today is complex and often times it is by design as to take advantage of the uninformed.
Set for Life
A newer book written for a younger generation. The author Scott Trench is the CEO of the popular real estate investing website BiggerPockets.com. He offers a new way of looking at personal finances that makes total sense and is not really mentioned in some of the older classics. The idea of cutting out coffee, and having beers with friends to get ahead in life seems boring. Instead of cutting out the fun stuff, why not focus on cutting the top 3 biggest expenses: housing, transportation, and eating out.
The book will not sit well with most people over 30 to 40 because the idea of renting all your rooms out or having a bike instead of a car won’t be that appealing. It is great for someone out of high school or college though and can make a big impact for younger generations. Still, the ideas in the book are great and building up a financial runway might help you leave the current job you hate and give you a shot at making more money.
The Millionaire Fastlane
The Millionaire Fastlane is for the higher speed individual. MJ Demarco tells the story of how he used the fast lane to become rich and how most people are in the slow lane or even the sidewalk. The fast lane is for someone who wants to get rich faster than the traditional 30 to 40 year route.
One of the biggest takeaways from this book is how a lot of the people that sell you the slow lane are actually in the fast lane. They sell products and services to you teaching how to save money, invest in your retirement account, and hope you make it at the end. While they are selling you the slow lane (traditional financial advice), they are actually in the fast lane by running a business and getting more money to reach financial freedom faster.
Conclusion
Reading books about personal finance create opportunities for yourself. The more knowledge you have the more aware you are of what is happening with your finances. If you do not pay attention, someone else will gladly put the money from your pocket into theirs. Also there is a lot of money printing going on today so it is even more important to pay attention before you find yourself later in life wondering where all your money went that you spent a lifetime earning.
