Best Personal Finance Books Of All Time (5 BOOKS THAT CHANGED MY LIFE)

if there's one thing I will always spend money on without hesitation it's books I've learned more about money and personal finance from books then I learned in college as a finance major and it was all at a fraction of the cost in this video I'm gonna talk about the five best personal finance books of all time I'll summarize the main takeaways of each book and I'll also list my reasons for why I think you should read it each of these books had a major impact on my life changed the trajectory of my career life and money choices and I honestly don't know where I'd be without these books probably broke in depth and barely scraping by not a pretty picture the list I'm about to share with you isn't in any particular order but I've tried to list the books more or less in the order that they came into my life each book gave me key life learnings along the way and represents different milestones in my financial journey that I'll tell you a little bit more about so I hope you enjoy give this video a like and let's dive right in so the first personal finance book I've ever read was in my early teens Rich Dad Poor Dad what the rich teach their kids about money that the poor and middle class do not buy Robert Kiyosaki in this book Kiyosaki talks about the money lessons that he learned from his to Dad's his real father who was his poor dad and his best friend's father who was his rich dad his poor dad despite being hard-working and highly educated never really got ahead financially and his rich dad on the other hand didn't even finish high school but his rich dad understood the rules of money and became one of the richest businessman in Hawaii so here are some key takeaways from the book Kiyosaki says that in order to become wealthy you need to understand the difference between an asset and a liability I think this is by far the most important lesson from the book because the wealthy buy assets whereas the poor and middle class buy liabilities an asset is anything that puts money in your pocket such as stocks bonds rental property and a liability is anything that takes money out of your pocket so cars houses watches designer Baggs things like that liabilities cost money to buy and they cost money to maintain so they really prevent you from building wealth because the cash flow direction is out of your pocket versus into your pocket on the other hand every dollar you invest into an asset becomes kind of like an employee that's working for you 24/7 to create more income even when you're on vacation this is the whole idea behind passive income and I actually have a whole video about investments that throw off passive income so check it out right here if you're interested but essentially the idea is that assets throw off income or cash flow even when you're not working for it the goal is to get your income as high above your expenses as possible so that you can invest this excess income into assets and then these assets throw off more income and then they create this virtuous cycle of increasing cash flow and increasing assets when you have enough income from your assets to cover your monthly living expenses that's when you become wealthy according to Kiyosaki in the book he also differentiates between your job and your assets so your job is not an asset because if you stop working the money stops coming in but if you take the income from your job and then you turn that into assets that's what's really gonna make you wealthy and enable you to leave the so called rat-race another point I thought that was super important to highlight is that financial literacy is everything financially ignorant people make decisions based on fear and greed whereas financially literate people make decisions based on rational analysis for example the fear of losing money prevents financially ignorant people from investing in stocks even though that's what would make them wealthy in the long term the more financial literacy you have the less influence you'll be by your emotions and the better decisions you can make finally the book also talks about the importance of understanding the tax code to minimize your taxes taxes are going to be your single biggest expense over your lifetime and Kiyosaki says that financially intelligent people know how to use the tax code to make themselves wealthy for example business owners earn they spend as much as they can and then they get taxed on what's left on the other hand employees earn they get taxed and then they spend only what's left so the wealthy take advantage of businesses corporations and other legal structures that allow them to deduct all their expenses before they pay any taxes unfortunately the school system isn't designed to teach you this stuff so it's up to you up to us to obtain the financial education on your own so I grew up in a very traditional Korean family and the only life advice I ever got was to go to school study hard and get a good job if I hadn't come across this book I probably never would have realized that there was another better way so I consider a Robert Kiyosaki as my Rich Dad and I really learned so much from him that you typically wouldn't learn from your parents or in school to open your eyes to a whole new world of possibilities please do yourself a favor and read Rich Dad Poor Dad it's the best-selling personal finance book of all time so I seriously can't recommend this book enough I will say though that the teachings are pretty high-level and there isn't a whole lot of actionable detailed advice so if you're looking for a more practical step-by-step guide then this next book is for you my next book is another one by Robert Kiyosaki cashflow quadrant and it's basically part two of Rich Dad Poor Dad in the book Kiyosaki tells the story of how he and his wife Kim used to be homeless and then he tells the story of how they got out of it and became financially free in just a few short years it's an incredible story and very inspiring and he lays out the seven steps to financial freedom which are the exact steps he and his wife took to get out of being homeless to retire young and retire rich he talks about the cash flow quadrant which has four quadrants e s B and I e stands for employee and E's main source of cash flow is their paycheck B stands for businessperson and these get the bulk of their cash flow from the businesses that they own S stands for self-employed and S is get most of their cash flow from working in their businesses SS are lawyers doctors that have their own practice freelancers consultants and anyone who works for themselves so they don't have the freedom of a B because they are their business if they stop working the money stops coming in the fourth quadrant i stands for investor and i's get most of their cash flow from investment income such as dividends interest and rent most of us are conditioned to become e's nobody learns in school how to become an entrepreneur how to invest their money things like that however Kiyosaki says that true financial freedom lies in the B and AI quadrants the B's and eyes take a lot of risks but they also have passive income that enables them to work only if they want to B's an eyes tend to value freedom whereas e's tend to value job security he also talks about how bees and eyes pay the least in taxes because there's a lot of loopholes available to bees and eyes whereas ease and SS have a lot less to work with this book is all about being intentional about which quadrant you end up in so I come from a family of ease but after graduating college I realized that what I really wanted was to become a bee and an I corporate life just wasn't for me I wasn't cut out to be an employee even though that's what I thought I had to become based on what my family would tell me all the time so you don't have to stay in the quadrant that you're in now however it will take a lot of dedication and learning to jump over to a new quadrant and this book tells you exactly what kind of skills you need to learn and the mindset shifts you need to make to change quadrants it's been like seven years since I lost read this book and I'm currently rereading it again and seriously it's just blowing my mind just as much if not more than before I've read every single one of Robert Kiyosaki's books and it's so hard to convey how much I've learned from them so do yourself a favor and pick up a copy of the cash flow quadrant now the next personal finance book that changed my life is the 4-hour workweek by Tim Ferriss I came across this book in my freshman year of college in New York and this was at the Barnes & Noble in Union Square and the title and the cover of the book caught my eye I had taken a gap year before college to backpack around the world and I was totally looking for a way to go traveling again I was deep into my freshman year really missing that travel life and you know life got pretty busy for me because I was studying to get a finance degree and I was also working full time to put myself through college so reading the 4-hour workweek inspired me to just think out of the box from the traditional nine-to-five you know get a nine-to-five job after school kind of life and it really encouraged me to dig deeper and look for other ways so the biggest takeaway from the book is the idea of time and location freedom when you have total control over when you work and where you work you're part of what Tim Ferriss calls the new rich the new rich don't necessarily have a ton of money although sometimes they do but they have automated streams of income passive income that allows them to work from anywhere and to work only as much as they want to so in the book he gives you a blueprint for creating passive income streams that enable you to live the new rich lifestyle and he even has some tips on how regular office employees can also live the new rich lifestyle by becoming hyper efficient with their time and priorities and by getting their bosses to let them work remotely he also talks about how to take mini retirements which is the antithesis of the traditional idea of retirement where you work for 50 years and then you retire when you're old all in all it's a really cool book that challenges you to rethink everything you believe about productivity time and money before reading this book I thought that if I wanted to travel the world again my only options were to either be a broke vagabond backpacking traveler or to work long hours at a high paying job and just have two weeks of vacation once a year oftentimes Society trains us to think that we can really only choose between A or B but there's always an option C where you can have the best of both worlds I recommend this book for anyone who wants to design their life intentionally and make time to do the things you want to do now not decades later when you're old and retired fourth on my list of best personal finance books of all time is I will teach you to be rich by remet safety he gets pretty unconventional advice like don't keep a budget by all the lattes you want and to use credit cards to your advantage and his book is basically the ultimate guide to financial adulting in a way that we would want to follow not to mention he has a kind of weird sense of humor that totally cracks me up he gives specific recommendations on where to open your bank accounts what credit cards to use how to use your credit cards where to open your Roth IRA how to get out of debt as well as how to bucket your money between fixed costs saving investing and guilt-free spending I actually did a video recently called budgeting for beginners it's right here if you want to check it out but a lot of the system that I use came from advice that I got from his book it's not the exact same but it's very similar in the sense that he doesn't really advocate keeping a line-by-line strict budget it's more about paying yourself first telling your money where to go and then after you've done all that then you can spend guilt-free his whole idea is about automating everything and by automating everything you bypass the need to exercise willpower when you're saving and managing your money it's a really really awesome book and every time I read it I get some new ideas on how I can better optimize my finances I also love his tip about opening multiple savings accounts for different savings goals so at the moment I only have one savings account that I use for everything but he advises you to find a bank that lets you open sub savings accounts that you can nickname for example you can have an account called down payment on a house another account called emergency fund and another account called Yolo you know and I really think putting a name to your finances makes it more motivating to save money for it I really wish I'd found this book right when I graduated college because would have helped me save money at my first job get out of debt faster and just invest more with my salary instead because I didn't know about this book I was just spending money and feeling guilty and just kind of always feeling this low-level stress about my finances so whether you're just out of college or you've been working for a while do yourself a favor and get this book it will 100% help you organize your financial life and set yourself up for success the fifth book on my list of best personal finance books of all time is thinking Grow Rich by Napoleon Hill this book is the granddaddy of personal finance books because it's the ultimate on money mindsets and wealth consciousness over the course of 20 years Napoleon Hill interviewed a bunch of people who had built huge fortunes from scratch people like Andrew Carnegie and john d rockefeller and he found commonalities among them and basically found the blueprint for how anyone can become rich the premise of the book is that it doesn't take money to make money that money starts in the mind he says that getting rich first starts with a keen desire plus a plan and unwavering focus so with these three ingredients you can create all the riches that you want you know this whole idea that it doesn't take money to make money that was pretty foreign to me at the time because I thought you just needed a lot of money to invest and to make more money if you've ever heard that old saying it takes money to make money well this book is saying that it's not true so about four years out of college I wasn't happy at my job on Wall Street and I was looking for a way out and I really wanted to learn about real estate and invest in real estate but I didn't have the money to do it I also had a bunch of student loans and you know all that's good stuff even so I never totally gave up on my dream of one day owning real estate and rather than giving up on it I just started reading and studying all about real estate investing I even called a few brokers to look at some property listings even though I didn't have any money to buy anything and by chance through all these efforts I ended up meeting a very successful New York City real estate investor and I asked if I could start shadowing him so that I could just learn the ropes and see what he does and that actually turned into my next job and I ended up adding so much value to his business that he gave me sweat equity in to Brooklyn apartment buildings sweat equity is where you own a piece of the properties or of the business or whatever without putting your own money in so basically I got a small percentage of ownership in real estate that I could never have afforded on my own all thanks to the mindset principles I learned in Think and Grow Rich it really doesn't take money to make money it starts with a desire so this book basically teaches the law of attraction and how once you make the decision to get rich all kinds of people ideas and opportunities will come to you to help you get there so it might be a little booboo for some people but the more of these books I read the more I realized that money and wealth is pretty much 90% about mindset and less about knowing a bunch of complex financial information because even if you know stuff if you don't have the mindset then you're not going to take the actions on that information and you're not gonna do what's required schools don't teach you anything about personal finance and I didn't have parents who really talked to me about money it was more or less a taboo topic in the household so I'm truly grateful for books and everything we can learn from them it's amazing that we can learn everything we need to know about money from a stack of books that altogether costs less than $50 I really hope you'll check them out so now I want to hear from you which of these books are you planning to read and are there any other personal finance books that I didn't mention here that have made a big impact on your life let me know in the comments now once you've read these books and they help you with your mindset budgeting getting out of debt and saving money you might be wondering what comes after that so the answer is investing no one ever got rich by saving money in a bank account because in order to reach financial freedom you need to invest and you know what investing is easy to learn you can find everything you'll ever need to know about investing inside the pages of my favorite investing books so in next week's video I'm gonna talk about my favorite investing books of all of all time I've read tons of investing books so this is gonna be a highly curated beginner friendly list I learned more about investing from these books then I learned in my four years at college getting a finance degree so you definitely don't want to miss this list don't forget to subscribe to my channel hit that notification bell so you don't miss that video thanks so much for watching I appreciate you and thank you for joining me on this journey I post new money and investing videos every Wednesday so I'll see you [Music]

Channel: Investing With Rose

Views: 184,674

Rating: 4.962667 out of 5

Keywords: best personal finance books of all time, best personal finance books, personal finance books, money books, financial books, personal finance 101, books about money, books i recommend, personal finance book recommendations, financial education books, beginner personal finance books, life changing books, life changing books about money, life changing personal finance books, investing with rose

Id: G_tfDonqIt0

Length: 17min 47sec (1067 seconds)

Published: Wed Feb 12 2020