Name: I read 40 books on money. Here's what will make you rich
Uploaded: 2024-08-04T08:32:32.000Z
Duration: 13 min 19 s
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Past simple

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.

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So in this video, I'm going to break down the key things I have learned and taken away from all the books that I've read.

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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 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.

It 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 Cashflow Quadrant.

So there are hundreds of ways to earn money beyond the conventional nine-to-five 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 a nine-to-five job and how you don't have to be tied 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 Cashflow Quadrant that he discusses represents the four ways to earn money.

It's being an employee, so working a nine-to-five 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 Four-Hour Workweek by Tim Ferriss.

So when I read this, or even when I saw the title, I was initially quite sceptical.

I mean, a four-hour workweek sounded too good to be true.

But as I got deeper into the book, I realised it wasn't at all about working less.

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.

Cashflow Quadrant opens your eyes to the possibilities of earning money outside the traditional job setup, and then The Four-Hour Workweek gives you the tools to make that happen.

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 often.

He talks about the three paths in financial life.

The first path is the sidewalk, and it's 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 a slow game, and you're ultimately trading your time for money.

And then there's path 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.

This is one of the books that tends to have different opinions.

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 beliefs and figure out what was 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 but, 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 former 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 video when it comes to the getting rich part.

Next, we have another classic which is The Psychology of Money.

So I have a whole video 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 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 Housel, 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 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.

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?

Where should our money be channeled into to multiply its value?

Alex Hormozy 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 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 intelligent 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 that.

Then there's a little book of Common Sense Investing written by John and he invented index funds.