5 must-read personal financial books to make you a multi-millionaire
Introduction
Imagine, you can read only 5 whole books for the rest of your life, but these books have to make you a multi-millionaire. The question would be: which 5 books should you read?
Think and grow rich
First Published in 1937 by Napoleon Hill, this book has sold over 70 million copies worldwide. “Clarity is power”. When your brain knows a real number, your conscious mind will find a way to take you there”.
Hill spent the majority of his life studying successful people and their habits and urges us to think riches in our thoughts in order to see riches in our bank account.
Let's look at the 2 main lessons from this books
Lesson: 1 Use auto-suggestion to build your belief
The key trait of all successful people is this incredible belief they have about themselves and their goals. By telling yourself over and over and over again, that it is possible for you to achieve your goals, making your dream a reality is when you start to form these beliefs in your subconscious mind.
This builds not only confidence but also lets your goals seep into the subconscious part of your brain until you automatically align all of your actions that lead you towards your goals.
Lesson: 2 Always stick to your decisions
When Henry Ford decided the Model T would be his masterpiece, he knew this would be the one. In spite of people telling him to give up. change the model, come up with a new model, again and again, he stood with his decision. And then what happened?
The first model was produced in August 1908 and sold over 15 million units worldwide till 1927 – 19 years later.
Opinions are cheap. Everyone has one, and it's your decision to keep them or throw them away.
You can buy the book by clicking here.
Rich Dad Poor Dad
First Published in 1997 by Robert T Kiyosaki, this book has sold over 32 million copies worldwide, 40 languages across 40 countries. This is one of the best personal finance books you can read.
The book starts off as Robert growing up with their own Dad whom he calls poor Dad and with his friend's dad whom he calls Rich Dad.
He compares the two on financial terms and tries to learn good advice from both.
Poor Dad is focused majorly on liabilities, loans, debts while Rich Dad focuses on assets to build up his empire. He clearly defines the difference between assets and liabilities with brilliant examples. An asset puts money in your pocket. A liability takes money out of your pocket. My poor dad said, ”I can’t afford it”. My rich dad asked, “How can I afford it”. The book showcases 4 cashflow quadrants. Our lives are so much controlled by fear and greed, people say, ‘Oh, I’m not interested in money.’ Yet they’ll work at a job for eight hours a day.” And Kiyosaki made an acronym for the job: ‘Just Over Broke.’
“There is a difference between being poor and being broke. The broke is temporary. Poor is eternal.” “A person can be highly educated, professionally successful, and financially illiterate.”
The rich buy assets. The poor have expenses. The middle class buys liabilities they think are assets, take, for example, a new car loses nearly 25 percent of the price you pay the moment you drive it off the lot.
“Keep expenses low, reduce liabilities, and diligently build a base of solid assets.” “For most people, the reason they don’t win financially is that the pain of losing money is far greater than the joy of being rich.”
You can buy the book by clicking here.
The compound effect
First published in 2010 by Darren Hardy, this is the New York Times and Wall Street Journal bestseller
The book mainly focuses on how making small choices alone can impact your life explaining the wonder of compounding.
Would you prefer to receive a one-time payment of 10 Lakh rupees or a magical 1 paisa coin that doubles in value for the next 31 days?
For the people who choose 1 paisa, at the end of 31 days, you will be sitting with 1 Cr rupees. This teaches us the power of compounding and the need to start investing early in life. The earlier you start, the greater the time you stay invested, more the compound effect works in your favor.
As I write this, Warren Buffet’s net worth is $84.5 billion. Of that, $84.2 billion was accumulated after his 50th birthday.
Another great idea is the “garbage in garbage out” which tells about the negative things we take in and how our life turns to be negatively out. Don't waste your time watching TV, eating junk, reading useless stuff, consuming negative stories, and more.
There is a difference between learning and studying. Learning leads to knowledge. Studying a topic means you are invested in it and try it out. The world already has tons of knowledge. You don't need to learn more. What you need is to study, practice, and take action on the knowledge you have.
Small choices + consistency + time = significant results.
You can buy the book by clicking here.
The psychology of money
Published in 2020 by Morgan Housel, the book has sold over half a million copies worldwide. In the book, the author teaches us to how to have a better relationship with money and to make smarter financial decisions. emphasizing that one can become rich just by behaving in the right attitude towards money. There is always someone with higher financial status than you, the goal is to compare your present self with your past self.
The books start with the Janitor who had 8 million in his savings account when he died. Saving over time and letting the wonder of compounding do its work.
Be kind to yourself when you make a mistake or end up on the wrong side of risk. The world is uncertain, and it may not be your fault if something goes wrong.
The investment decisions you make on 99% of days don’t matter. It’s the decisions you make on a small number of days when something big is happening like a massive downturn, market crash, speculative bubble, that make all the difference. Warren Buffet has owned 400 to 500 stocks during his life. The majority of his money came from just 10 stocks.
If you’re rich, you have a high current income and bigger opportunities in the short term. But being wealthy is something different, it's the invisible money-hat you have that’s not spent. Being wealthy provides you the flexibility of having freedom, time, possessions, in the future.
As humans, we tend to underestimate how much our long-term financial planning will change over time. We may think we’ll never have kids or a big house when we’re young, so we plan accordingly. But then we find ourselves with a house and kids that the plan didn’t account for. So when thinking about your finance, try to account for the unknown.
People buy mansions and fancy cars thinking they get respect and admiration from others. but what they don’t realize is that people don’t admire the person; they admire the object and think of themselves as having that object. Buying impressive items to gain admiration just doesn't work out.
You can buy the book by clicking here.
The richest man in Babylon
First published in 1926 by George S Clason has sold over 2 million copies worldwide. The book tells financial advice through a collection of parables set 4,000 years ago in ancient Babylon. Let's look into 5 key points from this book.
Pay yourself first when you get your income.
Before you get your salary, before any other expenditure, pay yourself one-tenth of the amount. This was you make sure you always earn money for yourself before slaving for others.
Men of action are favored by the goddess of luck
A procrastinator and doer are faced with the same amount opportunities. What separates them is the number of opportunities they try out. The procrastinator will always come up with excuses. Meanwhile, the doer tries it out and takes many of the opportunities given to him. Therefore, the chances of the doer being lucky and succeeding is way higher than that of a procrastinator. It has nothing to do with luck, it has everything to do with action.
The power of passive income
One day you might not be fit enough to work So set up a system that can generate you passive income. Over time you will accumulate a lot of cash if you obey the rule of saving for yourself first. Putting your hard-earned money to work will work for you while you go to class, hang out with your friends, and even while you sleep.
Invest places that you're knowledgeable
Personally, I have no idea how Bitcoin works and where it will be in 10 years. Most of the people people who invest in bitcoin honestly don’t know how it works either. Invest your money in places that you know about and in places that you can control.
Guard your money against fatal loss
You buy insurance for all sorts of stuff like bikes, cars, houses. This goes for cash also. Don't stuff everything under your bed. Instead, take it to a bank or invest somewhere. And avoid gambling.
You can buy the book by clicking here.
Additionally, you can watch the video on this topic here.