My favorite personal finance books and how I took actions after reading them

personal finance
Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Share on email

I didn’t believe it when they said, “read books if you want to change your life”. I thought it was just a remark made to encourage kids to read books. It all makes sense now. All the financially successful people make it a habit to read books. Books give you exposure to the experiences that you never had.

Life is very short to experience everything on your own. The next best way to learn life lesson is from other experience is by reading books.

I do not like reading books. My primary excuse is I have neither time nor patience to spend hours reading books. I have a job, wife, and a family therefore my time is limited. I needed to learn from books therefore I found a way to consume the content on these books.

I have a 40-minute commute to work one way. This means I have 80 minute every day of 5-day work week when I don’t do anything than staying behind wheels. I subscribed to Amazon Audible free trial for a month and I was hooked. I was not hooked to the Audible but to the personal finance books that I was listening too. If you don’t want to spend money on Amazon Audible, I have a perfect blog post that explains how you can get your subscriptions without spending your hard-earned money in “How to get all your subscriptions for free for life – Dividend Investing”. Also, most of the audio books are freely available in YouTube. If you are tired of skipping those ads in YouTube (those are kind of annoying while driving), I have a post where I explained “how to subscribe to YouTube for a fraction of cost.

I’ve listed below books on personal finance that I have listened to on my commute to work and learned invaluable information. The list is in no way of any order how you should read it. They simply are in the order of how I listened to them.  

Rich Dad Poor Dad by Robert Kiyosaki

Rich Dad Poor Dad is a personal finance book by Robert Kiyosaki where he presents lessons on Money in the form of story about his two dads. His real dad, who has a higher education (PhD) and works as a government employee, and his friend’s dad, who is a high school dropout but is an established businessman, are Robert’s two dad.

Some facts about the book from Wikipedia:

Rich Dad Poor Dad has sold over 32 million copies in more than 51 languages across more than 109 countries, been on the New York Times bestsellers list for over six years, launched a series of books and related products; and received positive reviews from some critics.” The book has been endorsed by big media personnel and celebrities. All this shows how popular and impactful the book is.

What actions I took from the book:

This was the first book I ever read (in my case listened) on the list of personal finance books. I was not heavily interested in Money and financial freedom at that time therefore, the book helped me make that paradigm shift on my vision toward money. I was one of those who believed in good grades, high paying job, one small house, and easy life. I don’t like to admit it but to some extent I used to think- Money is root of all Evils.

The book “Rich Dad Poor Dad” gave me a new perspective towards money. Even though it did not provide me actionable items on how to become rich, it gave me new set of eyes to look at the Money and the process of getting rich. I did not focus so much on details about why school system did not provide enough financial education, but I understood why financial intelligence is important. Up to that point, I knew how to work for money. After reading the book, I learnt we all need to find ways to make the money work for us. This book was my first step on my journey to financial education and I loved it. It made me want to learn about the Money more therefore I explored more personal finance books.

Think and Grow Rich by Napoleon Hill

Think and Grow Rich is a book on personal development and self -improvement by Napoleon Hill that has sold over 15 million copies. The writer researched over forty millionaires and their habits to determine what made them who they are. The book talks about 14 core principles of success. Anyone following these 14 principles will get a guaranteed success. Getting rich starts with a mindset, grows with a burning desire and faith to the thoughts and results can be realized with the actions and persistence towards the goal.

What actions I took from the book:

The book is self-motivational and personal development type rather than personal finance related. But the ideas discussed in the book is applicable in every part of life. I really loved the concept of auto suggestion explained in the book. The book discusses, with the burning desire to be rich and self-affirmation that you’ll be rich, you must work towards that goal every day. The belief that you’ll become rich that day (Hill talks about setting up achievable deadline) will keep you going. It will motivate you towards working one step towards it every day.

I set out my journey towards establishing this personal finance blog in five years when the blog will be able to support my life without me having to work. I made a promise to myself that, everyday I’m going to sacrifice an hour of my time to work on this blog, with the strong desire that it will support my life in 5 years. I want to retire in 5 years and this blog will be my full-time source of income. I believe it’s doable. I’ve started commuting to work 1 hour early. I get my laptop and a morning coffee and start working on blog articles every day. I’ve given away my excuse that I don’t have enough time. I’m willing to sacrifice my one hour of sleep to work on the blog. I’ve a long way to go and I’m ready for the sacrifice.

I will teach you to be rich by Remit Sethi

I will teach you to be rich is a personal finance book that is both information pack and witty at the same time. It breaks the traditional advice of cutting back on your expenses and focus on budgeting and provides new perspective on how personal finance shall be handled. The writer says “buy all the lattes you want” to focus on spending money on things you love and becoming merciless on cutting costs on things you don’t. Remit believes in creating a system to generate income and escape 9-5, time and location constraint job and goes on explaining the importance of setting up your own business to have all the things you want in life.

What actions I took from the book:

I liked the idea of automating your finances and setting up a high interest low maintenance banks to help manage your money, described in the book. The writer has a concept of using only 90 minutes of your time every month to manage your finance. Setting up automation to your finances are the best way to get results. Immediately after reading the book, I opened up an online bank account to track all income and expenses from our business (me and my wife own an online business). If you want to learn more about online banks, you can check out my post on online bank account.  We also setup an online bank and named it as “Home improvement” and contributed $100 each every monthly through direct transfer from our banks.

In addition to this, I also setup a monthly $600 transfer from my personal bank to my investment account. Once I received a paycheck from my work, all the money were distributed into different accounts automatically. These online accounts are my loaded weapon that’s ready to fire whenever I need them. The fact that these transfers are seamless and automatic, I do not even realize I have all these money. Occasionally I logged into these individual accounts and be amazed at how much money I’ve accumulated over time.

Cashflow Quadrant by Robert Kiyosaki

Cashflow quadrant is another very informative book by Robert Kiyosaki on personal finance. I would consider this book as an extension to Rich Dad Poor Dad because he discusses about the cashflow quadrant in that book as well. The cashflow quadrant book explains about different ways of generating income. You can either be Employed, self-employed, Businessman or Investor. He also goes on to explain the features of each income quadrant and why our ultimate goal should be to move to the right side of the quadrant. The path to become rich heavily depends on how we earn the money.

What actions I took from the book:

After learning the importance of being on the right side of the quadrant (Investor and Businessman), I’m focusing my life more into working towards that goal. I’m started focusing more on our (me and my wife’s) online business. I always went on setting up my own online store where I sell digital product, simply because digital product gives more freedom. I’ve started investing in myself to learn more about my personal finance and how money works. I’ve reading more book on personal finance than before.

4-hour Work week by Tim Ferris

4-hour Work week is a book by Tim Ferris who breaks all the tradition stating you only need 4 hours a week to get your job done. He introduces term like new rich in the book which refers to the people who are rich not because they have millions dollar in their bank account but because they can work from anywhere in the work, and take all the mini vacations they want. Their work is not time constraint geo-restricted. Just like everyone, he hates 9-5 job and states how in the world everyone needs exact 8 hours a day to do their job. The writer discusses about the pareto principle which is 80/20 rule. He goes on explaining the 80/20 rule is applied everywhere. In marketing 80% of the results are observed by the 20% of the actions. 80% of a country’s wealth is generated by 20% of the people. Therefore, Tim goes on to say, 80% of the results can be achieved by working 20%

What actions I took from the book:

I love the idea of improving on the things that’s working out for you and giving your best to it rather than trying to improve on the areas where you’re terrible at. He says “Emphasize strengths, don’t fix weakness” I also like the concept of validation of a business before going all in. It’s better to lose money by going all in that testing the water first to make sure there is a demand for it while starting a business. The book talks about the time management, decluttering and limiting time to the most important work. It has a really good source of outsourcing mundane work so that you can focus on the essential task. This concept taught me and my wife to no try to do everything in our business on our own. Outsourcing some of the tasks will free out time to focus on product development, improvement and research.

I’ve been listening to these audiobooks on a repeat. My 80 minutes of wasted time on my commute has proven to be the most valuable time. I can listen to the full audiobook and once I’m done, I listen to them again later. This helps me sink in the concepts that I was not able to grasp in the previous listen. As per my plan, if I work for another 5 years, I will have 104,400 minutes to listen to these audio books and grab as much knowledge as I can. Please let us know, the personal books that are your favorite and I will add that in my list to listen. I’m seeking additional personal finance books which has great information and hope to expand this post.

[convertkit form=2533719]