Over the last few years I have read
almost every book that exists on money
and investing from the classic books
that cover the fundamentals like Rich
Dad Poor Dad to the psychology focused
ones like Think and Grow Rich to the
books that go into investing like one up
on Wall Street so in this article I'm
going to break down the key things I
have learned and taken away from all the
books I've read some of them really
surprised me because they contradicted
what I learned from my day job in
Investment Banking and I'm curious to
know if you share the same perspective
so let's start off with the basics and
the most popular one and that is Rich
Dad Poor Dad this is the classic of
Classics and I can definitely see why
it's so popular it covers the
foundations for finance and money that
isn't taught to us in school the premise
of this book is based around the
author's Two Dads his biological father
who recommends getting a secure job
taking the traditional path and retiring
with a pension and then there's a second
dad who is his best friend's father and
he was a high school dropout he built a
business Empire and was all about
independent thinking and buying assets
that make money for you and this book is
what introduced me to the concept of
assets and liabilities assets as it
explains are things that put money into
your pocket this could be anything from
Investments like stocks and shares real
estate side hustles or businesses that
bring in extra income on the other hand
liabilities are things that take money
out of your pocket and they lose value
over time and these are the things you
want to avoid especially in the years
that you're trying to build yourself
self up he says that when you think of
your home as a primary investment you
end up paying more for it and buying
more house than you need and that sucks
up a lot of your money in monthly
installments that could have been used
more profitably somewhere else so this
is a really good book to begin your
personal finance Journey explains the
Core Concepts in a very digestible way
and emphasizes the importance of giving
each pound or each dollar a purpose and
viewing it as an employee that is
constantly working for you so this
mindset clarifies the trade-off between
present expenses and future income
because every dollar or every pound
spent today is one that ultimately won't
be able to work for you later down the
road then he has a follow-up book which
is the cash flow quadrant so there are
hundreds of ways to earn money beyond
the conventional 9 to-5 job most people
think that a stable job is the only
legit and realistic way to Financial
Security but this book will paint a
whole new picture it makes you really
understand the limitations of an I25 job
and how you don't have to be tied to to
a desk for the rest of your life in
order to make money and be financially
free in fact it takes that one step
further and says how relying purely on
your job might just be the worst thing
you do when it comes to making money and
seeking Financial Freedom the cash flow
quadrant that he discusses represents
the four ways to earn money it's being
an employee so working a 9 to-5 job
being self-employed or having a small
business so for example if you're a
dentist a freelancer and then there's
being a big business owner and then
finally being an investor and in this
book he talks about how you can use this
concept to Achieve Financial Freedom and
which of these paths are most likely
going to lead you down that road it's a
good book to get your mind ticking with
ideas but when it comes to actionable
takeaways and things you can Implement I
would recommend this book and that is a
4-Hour Work Week by Tim Ferris so when I
read this or even when I saw the title I
was initially quite skeptical I mean a
4-Hour Work Week sounded too good to be
true but as I got deeper into the book I
realized it wasn't at all about working
less it was purely about working smarter
he talks about how anyone can live a
retired millionaire Lifestyle by
building their own business automating
it and then collecting their income as
they go and live their best life or the
life that they would usually wait for
years and years and years to live when
they retire when you read the book it
illustrates how something that is
initially very far-fetched and seems
like it's completely out of reach is
actually a lot more achievable than you
think so these two books go hand in hand
cash flow quadrant opens your eyes to
the possibilities of earning money
outside the traditional job setup and
then the 4-Hour Work week gives you the
tools to make that happen then we have
the millionaire fast lane the point that
the author makes in this book is that
there is no such thing as get rich easy
but there is such thing as get rich
quick which is really interesting
because you don't hear that very often
he talks about the three paths in
financial life the first path is the
sidewalk and is one where you spend more
than you earn repeatedly which keeps you
trapped in a cycle of being paycheck to
paycheck the second path that he talks
about is the slow lane and it's about
taking the safer path in life getting
good grades getting a good job saving a
portion of your paycheck every month and
then putting that into Investments and
eventually being able to retire at 65
plus years old and the issue with this
is that it is the slow game and you're
ultimately trading your time for money
and then there's part three and that is
the fast lane and that is leveraging
your time to create passive income so in
other words investing your time in work
that generates passive income by
creating a product or a system that's
capable of earning an income long after
your original time investment has been
put into it and it expands your income
potential so what I really like about
this book is that MJ the author while
saying there is such thing as getting
rich quick which can sound a bit scammy
he keeps it very real in that it isn't
possible without a lot of hustle a lot
of hard work and a lot of discipline you
need to be incredibly committed and even
though it might be or might look like
that you get rich really quick it's
actually accumulation of years and
experience and knowledge that gets you
to that point next we have Think and
Grow Rich this is one of the books that
tends to have different opinions you
either love it or you hate it there's
hardly a middle ground with this book
I've come across people who felt that
this book was all fluff and didn't
really deliver on what it promised they
expected a clear actionable road map to
wealth and so they were quite
disappointed when they didn't find that
and on the other hand there are people
who credit this book with transforming
their mindset and their financial lives
for them it was like this light bulb
moment that helped them unlock their
limiting money belief and figure out
what was holding them back so what's my
take on it when it comes to success I
believe mindset is everything if you
approach life with a scarcity mindset
thinking that there's never enough and
that money is hard to come by then that
is what you'll experience whereas on the
other hand if you believe in abundance
and that you're capable of achieving
wealth your actions will align to those
beliefs and Lead You towards success but
and there is a big butt mindset alone is
not enough you can have the most
positive abundance orientated mindset in
the world but if you're not taking any
action you're not going to get very far
it's like having the best tools in the
world but never using them to build
anything you need both the right mindset
and then also consistent focused action
so if you're looking to improve the fora
and you're open to exploring your
beliefs and digging deep into your
mindset then this book is for you if
you're not a fan of the philosophical
approach and you're looking for a
step-by-step guide to Building Wealth
then you might want to skip it and go
for some of the other ones that I
mentioned later in this article when it
comes to the getting rich part next we
have another classic which is the
psychology of money so I have a whole
article dedicated to this book and the
lessons I've learned so I'll link that
over here ultimately money is as much
about psychology as it is about maths
it's about how our minds perceive and
interact with money our feelings towards
money our past experiences with money
and these things often overshadow the
raw Financial knowledge that we have the
most interesting part of this book for
me is in relation to the fact of how
often we misattribute the role of chance
or luck in our financial lives so howel
the author talks about how most of us
learn what to do and what not to do
about money by studying the most
exceptional financial success stories
like the Bill Gates of the world and we
think that we can replicate it but the
more exceptional the story The more
likely it is that luck played a bigger
role in the outcome and so the fewer
lessons you can actually take from it
and Implement into your own life so he
actually recommends paying attention to
the patterns and not to the people so if
one person took Route a to get success
but 10 people took Route B to get
success chances are route B is what's
going to work for you because it's more
likely that chance or luck played a role
for the person that took Route a when it
comes to money there are some key
patterns and fundamentals that can apply
to absolutely everyone and it doesn't
require a whole amount of chance or luck
and I've got a free guide that goes into
this and on page 32 of that guide it
goes through the most likely things that
will guarantee your success when it
comes to investing these are the things
that have been proven Time and Time
Again by investing experts that have
trodden the path before us and things
you need to consider again that guide is
completely free if you want to check it
out it's in the description box below
there are also some fundamentals that I
think most of the money books fail to
mention and I'll go into that in a
second but firstly now that we covered
the basics about how to manage your
money what about the getting rich part
how do we do that where do we put our
money where should our money be
channeled into to multiply its value
Alex hosi introduced this concept of
ignorance debt when it comes to
Gathering knowledge he explains that the
difference between your current level
and earning 100 million is just the
information that you haven't yet learned
it's the fact that you don't know how to
make 100 million and we can use this
ignorance debt concept when it comes to
investing as beginners we tend to think
we understand the topic a lot better
than we actually do we may think that we
have grasped all the intricacies and
we're prepared to make really big
decisions when it comes to money
investing but this premature level of
confidence can mislead us if we don't
have a strong enough Foundation when it
comes to our understanding so what are
some of the books that can help us
tackle this ignorance debt and that can
start you on your investing journey two
books the intelligent investor and girls
that invest are great places to start
the intelligent investor is a book
Warren Buffett read when he was 19 and
he still calls this the best book on
investing that has ever been written the
principles of this book are Timeless and
it illustrates how investing over the
long term does not require any
specialist knowledge it doesn't require
being super intellig ENT or having
really deep Insight on anything it just
requires two things and that is one a
rational framework to make a decision
and secondly not letting your emotions
override your rational framework he
covers how the market behaves the basic
fundamentals of finance and how to
maintain control of your psychology then
the girls that invest is written by a
friend of mine Sim another really good
book for the ultimate beginner who wants
to understand why they should invest the
basics and the terminology of investing
and how to find your investing
personality type and create a portfolio
that matches it then there's a little
book of Common Sense investing written
by John Bogle who is the CEO of Vanguard
and he invented index funds so naturally
he argues how the winning strategy for
beginner investors is simple invest in
index funds and do it indefinitely he
talks about why index funds outperform
primary Alternatives and talks about the
ideal asset allocation of stocks to
bonds depending on your age I personally
think this book is a little bit outdated
for a number of reasons and I think that
bogul is a bit conservative when it
comes to asset allocation so a good
follow-up to this book is the dandor
investor and one up on Wall Street they
both follow similar principles when it
comes to the best investments and it's
that the best investments are often
right under your nose in the sense that
they align with what we already know and
engage with in our daily lives and based
on this we actually have a huge
advantage over Wall Street Pros I do
agree with this to some extent so for
instance I had inves line treatment done
on my teeth about 5 years ago and at the
time I was super impressed with the
product I was able to straighten my
teeth without needing to wear silver
braces the treatment was disre and I was
really happy with the results so I
decided to look into the company further
and I found that it was publicly listed
I looked at the company's reports and I
decided to buy the stock that investment
turned out to be the investment that
I've made the biggest return on out of
everything that I've invested in and it
was purely from me being a customer and
seeing the impact firsthand so I do
somewhat agree that the average investor
has the potential to one up
professionals but it isn't as simple as
just okay be a customer it requires a
lot more research to do before investing
in that stock one common thread amongst
all of these books and across all legit
genuine Finance advice is that there is
no shortcut to success and that there
are no shortcuts to getting rich it
requires discipline it requires
persistence and the ability to control
your emotions when it comes to money or
when it comes to most things in life
what I have found that at least from the
money Focus books very few touch on the
importance of putting money towards
yourself before investing in the stock
market and I guess those are two very
different topics but the truth is
investing in most cases is a very long
and very slow game whereas investing in
yourself whether that's your ability to
manage money your ability to make more
money through a business through a side
hustle that is more important when it
comes to the shortterm although it does
require a lot more work and discipline
and knowledge if you want to go down
this rout I have plenty more articles that
can get you started Ed and I've made a
playlist that I'll link up over here
that you can look at and I'll leave you
with that but before I close this article
off can you do me a favor over 75% of
people who read my article haven't
subscribed to the channel and that is
abnormally high so if you read some of
my article and you get value out of them
please don't forget to subscribe it does
help me out so thank you so much and
I'll see you next week
Aucun commentaire:
Enregistrer un commentaire