In these 3 books, to improve your financial literacy. I am going to share with you the most important takeaways of the three books that are regarded as the best in financial literacy.
Almost 2 months ago, a friend of mine suggested I should start writing reviews of self-help financial books. Since at this moment a lot of us have more free time, I thought it would be a great time to give a short review of my three all-time favorites.
I’ll, later on, write a more in-depth review of each book. For now, I just wanted to introduce these books in a nutshell. I am hoping this article will be the first of a series to come.
Even though this article won’t cover these books entirely, I believe you’ll find the most important takeaways, at least in my opinion. Besides, my goal is to awaken your interest so you can pick up these books, read them, analyze the information and apply it to your life.
The 3 books you should read to improve your financial literacy are:
– Think and Grow Rich by Napoleon Hill
– Rich Dad Poor Dad by Robert Kiyosaki
– The Richest man of Babylon by Georges S. Clasen
1. Think and Grow Rich
Who’s the author behind this book? Right, the author behind this amazing book is no other than Napoleon Hill.
Mr. Hill was an American author in the era of the new thought movement. He was one of the earliest producers of the modern genre of personal success literature. He is widely considered to be one of the greatest writers on success. His most famous work, Think and Grow Rich (1937), is one of the best-selling books of all time.
1.1 Takeaway of Think and Grow Rich
1.1.1 Control your thoughts
If you don’t see riches in your thoughts, how can you expect to see it in reality? all achievements and riches start with thoughts. All the great leaders of the world are/ were dreamers. To be successful, you have to align your thoughts with your goals.
“If you fail to control your own mind, you may be sure that you will control nothing else” Napoleon Hill
1.1.2 Understand the difference between wishes and desire
According to the author, wishes will never help you live your dreams and reach them, but a burning desire will. A burning desire will push you into taking action. He also gives 6 steps one has to follow in other to transform dreams into reality.
1. Specify the amount
2. What are you going to give in return?
3. Specify date
4. Create a plan and right away
5. Write 1-4 into a statement
6. Read the statement twice daily
So shortly put, Mr. Hill believes in other to make your dreams a reality, you have to be specific with what you want when you want to achieve it, be prepared to make sacrifices and be ready to create a plan to guide you along the way.
1.1.3 Learn to deal with failure
Mr. Hill is blunt with this point “A quitter never wins, and a winner never quits”. He studied Andrew Carnegie, one of the richest men that ever existed and other successful people. He found out that successful people deal differently with failures. They don’t take it personally. Usually, they learn from it and move on.
1.1.4 You should dominate the six ghosts of fears
1. The fear of poverty
2. The fear of criticisms
3. The fear of ill-health
4. The fear of loss of a loved one
5. The fear of old age
6. The fear of death
1.1.5 The sixth sense
The sixth sense is your gut feeling, intuition, grit. One of the best ways to develop or strengthen the sixth sense is through meditation and tuning into your subconscious mind. Your subconscious mind is your connection with the infinite wisdom of the universe.
When we tune into our subconscious, which in turn tunes into the universe, we get answers to questions we will never be able to reply to.
2. Rich Dad Poor Dad
Rich dad poor dad is a classic among self- help financial books and it’s author, Robert T. Kiyosaki, is also well know in the financial realm.
Mr. Kiyosaki is an entrepreneur and educator whose perspectives on money and investing fly in the face of conventional wisdom.
He is a blunt talker, no bullshit. This book is going to challenge the life path most of us perceive to be the one and only way to be successful, which is, go to college, get good grades, then find a good job and save for retirement. Right, according to Kiyosaki this path is BAD.
2.1 Takeaways of Rich Dad Poor Dad
2.1.1 The Rich Work for Money
Let’s start with these 2 questions: have you ever had a job? I assume most of us will reply yes.
Now the last question: be honest with yourself, why did you work or are you currently working?
According to Kiyosaki, you should work to learn, not for money. “Most people have a price, and they have a price because of human emotions named fear and greed. First, the fear of being without money motivates us to work hard, and then once we get that paycheck, greed or desire gets us thinking about all the wonderful things money can buy. The pattern is then set.”
“The pattern of get up, go to work, pay bills, get up, go to work, pay bills… Their lives are then run forever by two emotions, fear and greed. Offer them more money, and they continue the cycle by also increasing their spending. This is what Kiyosaki calls the Rat Race.”
“Money without financial intelligence is money soon gone.” Kiyosaki
Don’t let your life being run forever by fear and greed. You should learn to control your emotions and develop your financial intelligence.
2.1.2 Why does he teach financial literacy?
Kiyosaki is concerned too many people are too focused on money and not their greatest wealth, which is their education. If people are prepared to be flexible, keep an open mind and learn, they will grow richer and richer through the changes they’ll make. Kiyosaki is afraid of the rough ride ahead for those who believe money is the number one solution to their problems. In his belief, intelligence solves problems and produces money.
2.1.3 Understand the difference between an asset and a liability
Kiyosaki’s Rule Number One: You must know the difference between an asset and a liability and buy assets. In a nutshell, assets put money in your pocket, while liabilities take money from your pocket. If you want to be rich, this is all you need to know. It is Rule No. 1. It is the only rule.
2.1.4 Mind Your Own Business
According to Kiyosaki, the secret to wealth is to “Mind your own business.” Financial struggles are often directly the result of people working all their lives for someone else. Many people end up with nothing at the end of their working days.
Your job is not your own business.
Ray Kroc, the founder of Mac Donald, for example, is a salesman. At one time he sold mixers for milkshakes, and soon thereafter he was selling hamburger franchises. However, while his profession was selling hamburger franchises, his business was the accumulation of income-producing real estate.
Start minding your own business: Don’t let your profession define you. You could start by maybe learning forex trading, investing in the stock market or taking a skill of yours and turning it into a side-hustle. Whatever you choose, make sure it is something you can manage long-term.
2.1.5 The Rich Dare to Invent Money
We all have tremendous potential, and we all are blessed with gifts that when put to use could yield amazing results. Yet, the one thing that holds all of us back is some degree of self-doubt. It is not so much the lack of technical information that holds us back, but more so the lack of self-confidence. Some people are more affected than others.
At the end of the day, it is your “gut”, “daring”, “grit” whatever you call it. This has a great impact on your success in life.
3. The Richest Man of Babylon
About the author: George S. Clason, was a soldier, businessman, and writer. What are you going to learn from Mr. Clason? This book is going to teach you the ability to grow your prosperity from what you already have.
3.1.2 Pay Yourself first
Whatever you earn, you should keep some for yourself. Before paying your landlord, utility bills, child support or debts, you should pay yourself above all.
4.1.2 Save at least 10% of whatever you earn
This lesson completes the previous one. Saving every time you earn money will help with self-discipline and money management. However, keep in mind though that this advice serves as an indication. For those who are already well seasoned in saving, you could challenge yourself by saving a few percent more.
If you are a newbie in this arena, it is best to start slow, even with 5%. Once you get a hang of things, you can then gradually increase as you go.
3.1.3 Invest Your Savings
Most times, after 6 months or so of saving, we start getting tempted to spend the money we have accumulated. For some of us, it might be wanting to purchase the newest iPhone, designer clothes, booking expensive vacations or showing off at the club by buying expensive drinks. Now, here comes the not so fun part about savings.
According to Georges S. Classen, your savings should be invested. Meaning you should put that money to work and to make more money for you. Doesn’t sound so bad after all, does it?
3.1.4 Invest in What You Understand
This one is a critical step to be taken seriously. It’s not smart to invest in something you don’t understand. The fintech sector, for example, changed the game, nowadays buying and selling stocks (or Forex) has become very easy and accessible to almost everyone for instance.
That mixed with social media platforms, such as Instagram, filled with get- rich- quick schemes have gotten a lot of investors into ugly situations that
Investing without knowledge can be classified as gambling. As a rule of thumb: “Invest only in what you understand”
3.1.5 Be able to delay gratification
Let me tell you a little story that will demonstrate how being able to delay gratification can pay off in the long run. Lebron James, who was the most hyped young basketball player of the decade had a choice of signing a contract with many shoe companies.
Among them was Nike who offered him a contract of $87 million and Reebok who offered him $115 million. Guess who he chose? Nike!
Why? According to Brian Windhorst, James sided with who he thought would be a better long-term partner. His most recent contract with Nike is reportedly a life deal that could exceed $1 billion.
The moral of the story is to think long-term.
I hope you guys have learned something from this post. I am looking forward to publishing the review of each book quoted above.
Which book among the 3 would you like for me to review first? Let me know in the comment section.