As I was arranging the numerous personal finance books I've
accumulated over the years, I couldn't help but wonder how I can put
everything together in such a tiny little space. Then I asked myself, if
I had a very small book shelf that can accommodate only 10 of these
books, which books would I choose? I had to think really hard because I
love reading books and I've learned a great deal about life and money
through ALL of them. These 10 books are special in that they have
completely altered the way I view money and life! They have inspired me
to learn more about money and pursue financial freedom! May these same
books help you achieve your financial dreams!
Here are Rich Money Habits' top 10 best personal finance books of all time!
#10. 8 Secrets of the Truly Rich by Bo Sanchez
This
one is special because it's written by a preacher - and a famous
Filipino preacher at that! Bo Sanchez is a best-selling author of
inspirational books in the Philippines. This is his first book that
openly talks about money, business and investing.
What I
particularly like about this book, is that it tackles one of the most
critical obstacles in making money - that is, how to reconcile money and
religion. Living in the only predominantly Catholic country in Asia, it
is very important for me to align what I believe in whether it be on
religion or money. Otherwise, I'll just be confused and end up going
nowhere.
The book is full of stories on how daily money habits
make you rich or poor. It describes the most common perceptions we have
about money. We were taught that money is the root of all evil. When we
watch our favorite TV shows, rich people are often portrayed as greedy.
They only got rich through "drug" dealing or some other "illegal" means.
Due to this stereotyping, some us unconsciously don't want to be rich!
Who would want to be the "bad" guy in our own soap opera called life?!
:)
As a result, there is conflict inside of us. Some of our internal dialogs are
"I
want to be rich...BUT not so rich that my friends would hate me and I
would no longer have friends." err...who wants to be loner?! :)
Or the most common,
"I want to be rich...and I'm so desperate the only way for me to get rich is by winning a million dollars through lottery."
The
great tragedy is never realizing that you don't have to be a crook, or
be greedy, or become unfriendly, or win a lotto ticket to be rich - you
only need to build rich money habits!
#9. Multiple Streams of Income by Robert G. Allen
This
is one of the books I bought when I was in the US. Since I love reading
personal finance books, I ordered a bunch of them online. I was able to
get them cheaper because I looked under the "used" books section.
Surprisingly, most of them are in relatively good condition and look
almost new!
The book was my first exposure to having multiple
streams of income. For someone who worked as an employee most of his
life, I thought I could only earn from one stream of income - my job! I
realized having only one stream of income is not a very good idea
because there's also only one way money can come to me - through my
paycheck!
Having multiple streams of income is NOT necessarily
having a second job, or even a third! Multiple streams of income
building systems so that money can flow through your life. It means,
investing both your time and money to learn how to build those systems.
One
way could be through real-estate investments where you get a "stream"
of income from the monthly rental of your tenants. Another "stream"
could be getting portfolio income like "dividends" or "interests" from
your stocks or bonds investments. And yet another "stream" could be from
royalties you receive from publishing a book or a music recording if
you're a singer. Having a LOT of "streams" where money can come to you
is certainly better than relying on just your "job" to make money. The
challenge is how to utilize what you have like time, skills, and money
to setup these streams of income.
#8. Secrets of the Millionaire Mind by T. Harv Eker
The
great thing about the book is it makes you realize what money habits
you have developed since the day you were born. It brings out those
subconscious thoughts that are hindering you from achieving financial
success. Some of the internal dialogs with yourself could be.
"I am not good enough. I'll never be amount to anything financially."
Or you might say
"I'm
poor because my parents are poor...and my grandfather is poor...and my
great grandfather is poor...so I will always be poor..."
You might
not be saying it out loud. You might only be thinking about it. Worse,
you might not even be aware of it. And you wonder why you'll not getting
anywhere. As T. Harv Eker aptly put it
"...if your subconscious
'financial blueprint' is not 'set' for success, nothing you learn,
nothing you know and nothing you do will make much of a difference."
#7. The 4-Hour Workweek by Timothy Ferriss
The
book speaks about the "New Rich", a group of people who have the time,
money and mobility to spend only 4 hours a week to generate money and
live the life they want. The rest of their time is spent on things they
love to do like dancing in Buenos Aires, scuba diving in Panama or
basking in the Hawaiian sun.
Who wouldn't want to spend only 4
hours of his time working instead of the usual 40 hours a week? Who
wouldn't want to have the luxury of time to do the things you really
love? Who wouldn't want to take a very long vacation in the beaches of
Hawaii while your business is taken care of and money is still coming
in?
For employees, it offers practical tips on how to negotiate
with your boss for a work-at-home arrangement. It also provides ideas on
how to plan your own "mini" retirements so the money is still coming
in, without you around. It even discusses how you can "outsource" your
life!
The 4-hour workweek is easy to read. The ideas are presented
in a simple and uncomplicated manner that you think you're reading a
comic book. The book is conversational and funny. Reading it is like
speaking with the author face to face. You might even find yourself
occasionally laughing at his jokes. (I know I have) :)
#6. Rule #1 by Phil Town
I
picked up this book out on a whim when I was at a bookstore in
Malaysia. The book explains investing in a very simple and
understandable manner. It is not intimidating in any way. After reading
this book, it made me realize that I did not need to be afraid of
investing. I just need to learn how to do it right.
Rule # 1 is "Don't lose money."
Whether
the market is going up or going down, don't lose money. Whether it is a
bear market or a recession, don't lose money. Whether you have billions
or just a couple of hundred dollars in investment, don't lose money.
The
book discusses some of the basic myths about investing and provides
simple strategies for successful investing while spending only 15
minutes a week. It tells about the five key numbers that really count
when determining the value of a stock or business. It even mentions
valuable internet tools and the advantages of managing your own
investments to achieve your investment goals.
I know there may be
other books on investing out there, but so far, this is the only one
I've come across that made me understand the world of investing a little
bit better.
#5. The Richest Man in Babylon by George S. Clason
I
came across the Richest Man in Babylon from reading Rich Dad, Poor Dad
by Robert Kiyosaki. It tells about the ancient secrets of money. The
book coined the phrase "pay yourself first". In ordinary terms, it means
- SAVING. But it is more than that. The book tells that in any trade
you're in, you CAN still "pay yourself first". Once you have "money" in
savings, you can then have that "money" work for you.
But how can
you save when your little money is not even enough to survive on? How
can you set aside 10% of your income when you're living on 110% of it?
How do you "pay yourself first" when the creditors are coming after you?
Paying
yourself first is certainly not easy. It takes tremendous discipline.
That's one of the reasons why it is not popular. But once you get the
rich money habit of controlling your money instead of it controlling
you, your confidence builds up, you'll think that if you can do this
then you can do anything. And as with anything related to money, it
touches everything. Your health improves. You become successful in what
you do. People will wonder why you're always brimming with confidence.
You become the richest man in every sense of the word.
Isn't it
better to walk into a store knowing you can buy anything you want
because you have the money (saved)? Doesn't it give you peace of mind
knowing that if some emergency occurs, you can readily rely on your
saved "emergency fund"? Would it be nice to be able to help your family
or those closest to you "financially" for a change? That's the dream.
And it starts with paying yourself first.
#4. The Millionaire Next Door by Thomas J. Stanley Ph.D. and William D. Danko Ph.D.
The
book is based on a comprehensive research on the money habits of
millionaires. The results are surprising in the sense that majority of
those millionaires are not what we commonly expect them to be. As aptly
described in the book,
"These people cannot be millionaires! They
don't look like millionaires, they don't dress like millionaires, they
don't eat like millionaires, they don't act like millionaires - they
don't even have millionaire names. Where are the millionaires who look
like millionaires?"
Many of the "next door" millionaires are
first-generation. They did not inherit their riches, they built them.
Few of them do not spend more than $100 for a watch. Others don't even
wear a suit to work! They engage in types of businesses which could be
classified as dull-normal. Some are welding contractors. Some are rice
farmers. Some are pest controllers. Others are coin and stamp dealers.
What
separates the "next door" millionaires from the rest is their money
habits. They are frugal in nature. They value money. They invest at
least 20% of their income. They even have a "go-to-hell fund" which can
provide for their expenses for at least 10 years without working at all.
I
think the most important lesson from the book is not that we know who
the actual millionaires are, but the realization that it could be YOU!
If they can do it, so can you! It's time to build your own rich money
habit and be the "millionaire next door"!
#3. Your Money or Your Life by Vicki Robin and Joe Dominguez
I
bought this book out on a whim. I was actually looking for the book
"Outliers" by Malcolm Gladwell when I saw this book at 20% off.
The
book tells about managing not only your money but looking at it in
totally different way. Your money is only part and parcel of what your
life is. There is also time. There is also your dream! What do you enjoy
most? How do you spend your money? What do you do with your time? Would
you still do what you do even if you have all the money in the world?
The
book emphasizes managing the resources that you have like money and
time. It offers very specific tips like monitoring your spending and
whether each of those is contributing to your goals or not. It also has
some ideas on how to identify exactly what you like to do and manage
both your money and time so you can do more of what you love to do and
less of what you don't like to do. It even has some charts to help you
picture out and plot where you are and when your freedom day will be.
I think the main message of the book is not to choose money over your life or the other way around - it is to have BOTH.
#2. Rich Dad, Poor Dad by Robert T. Kiyosaki
As
mentioned in my personal finance story, this is one of the books that
made me realize I really need to develop rich money habits to achieve
financial freedom. The book is a story of growing up learning about
money from two different dads: one is rich and the other one is poor.
The story unfolds to describe the different money habits of the rich dad
and the poor dad, each one producing a different financial result.
The
book makes the very complex world of money and business seemingly
simple. It is so simple that the ideas can be explained to a child using
only sketchy drawings. The drawings illustrate how cash flows from your
pocket to the bank when you pay your bills, and how it flows from your
company to you when you get your paycheck.
What you do with the
money after your receive it determines whether you become rich or poor.
Do you use the money to buy assets like real estate investments or setup
businesses? Or do you use it to buy liabilities like a brand new LCD TV
in 12-easy-monthly-payments-with-zero-interest!
The reason I
liked the book is because it inspired me to become better and to view
business and money in a totally different way. It expanded my
understanding of how money really works! Most of all, it gave me the
confidence to dream again!
#1. Think and Grow Rich by Napoleon Hill
Think
and Grow Rich is one of the first books I've read about money. The main
message of the book is that you have to "think" about money first
before it becomes real. It is a direct translation to the phrase "what
your mind can conceive, your body can achieve". When you really think
about money and you have this "burning desire" to make it real, all the
universe conspires to build the means to bring it to you.
Money
is, first and foremost, only an idea. It is not real. The money you hold
when you buy a bag of grocery is only as real as the "mutual" agreement
you have with other people that the paper you're holding is worth
something of value equal to that you're buying.
The book doesn't
say "Work Hard and Grow Rich". Working hard means different things to
different people. For an employee who doesn't like what he's doing and
only get paid very little, everything is "hard work". For someone who
love what he does, "working hard" is not in his vocabulary.
As Henry Ford said,
"Thinking is the hardest work there is, which is probably the reason why so few engage in it."
There you have it! Rich Money Habits' top 10 best personal finance books of all time!
P.S. How about you? What are the best personal finance books you've read?
Cheers!
Allan Inocente
Rich Money Habits
