5 Life Changing Personal Finance Books

5 Life Changing Personal Finance Books

Many people spend more time planning their vacation than their financial future. This is why too many end up nowhere. Self-control, education, saving, investing, and trading are paths to building net worth. We earn money by creating value for customers, a company, or ourselves through education and experience. Our net worth is the difference between the products we consume and the value we create for businesses.

Financial Peace:  Dave Ramsey taught me to break free from the burdens of consumer debt and live beyond my means. 15-year mortgages can save you six figures in interest, new cars cost you thousands of dollars as you drive them off the lot, and credit cards can be a prison without self-control. Staying out of debt is a path to freedom, regardless of economic status.

Rich Dad, Poor Dad: Robert Kiyosaki taught me that the employee quadrant was not the only way. There are also the self-employed, business owner, and investor quadrants that people can operate in. Cash flow from assets is a better way to create an income than selling yourself to an employer.

Your Money or Your Life: This book explains that no “Job Charming” exists. The best plan is to free ourselves from needing a job by having assets that pay our bills without selling our time to someone who will profit more than we will.

The Millionaire Next Door: This book shatters the perception that people with nice houses and new cars are rich. The vast majority of the “Joneses’” that so many try to keep up with are high-income earners who live paycheck to paycheck and spend every penny they make on their lifestyle. Many are up to their eyeballs in debt. The actual millionaires are often the methodical middle class that dedicates themselves to building capital and success. They are successful due to their self-control and work ethic.

Trend Following: Michael Covel taught me the power of trends in capital flow and to follow the path of least resistance with my trading and investing capital. Reacting to what is happening instead of predicting or having opinions about what will happen is the easiest path to building capital in the financial markets.