3 Books that Will Leave You Feeling Financially Empowered

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At the end of October, I attended a financial blogging conference called FinCon in Dallas, Texas.  As a first-time attendee, I was incredibly nervous about meeting piles of new people and the conference gist in general. 

 

In the end, though, it wasn't so scary.

 

By the end of the conference, my mind was whirling with new information - almost so much so - I worried I wouldn't have the brain power to remember it all.  I absorbed all that I could and wanted to find a way to implement everything.

 

With this new focus, I was convinced…I had all that I needed to take over the world.

 

Yes, me.  I would stand on my soapbox, totally inspired and filled with hope, and I, Kelley, could become the blogging superstar I knew I could be.

 

I'm sure I'm not alone. 

 

Have you done this?  Attended a conference, course, or workshop that renewed your passion, your motivation, and your personal purpose - whether for your job or hobby.

 

Conferences are especially good for this.  But, why do we need a conference to get moving - why is it so hard to find the same kick in the ass from our home or office, friends or colleagues?

 

In the crux of my personal crisis, I was reading everything in hardcopy or online that related to personal finance.  While most books were somewhat useful, there were some that left me with - similar to the conference effect - feelings of world domination. 

 

I wanted to share them with you here.  In particular, I wanted to share the key insights I took away from reading them.

 

You'll notice that I love those who write with a no-nonsense approach.  The ones who would be the friend to tell, when asked, that, "Yes, you do look fat in that dress." 

 

After all, I don't want to waste my time being told cushy niceties, if the raw goods will help me get to where I want to be faster.

 

 

Book #1

 

I Will Teach You to Be Rich - by Ramit Sethi

 

Ramit's book is intended as a 6 Week Program to get your finances in order and start living a rich life.

 

Here are some ah-hah moments I had when reading Ramit's book:

 

Debating Details - An Excuse for Inaction

 

Ramit details how our consistent need for MORE information (on almost any subject) creates unnecessary confusion, resulting in inaction.

 

He discusses diet specifically.  To lose weight a person needs to exercise more and eat less, yet we go to great lengths to overcomplicate weight loss - buying Fitbits, recipe books, special groceries (low carb, low fat, gluten-free, etc), instead of getting busy and straight to the root of the problem - eat less, exercise more.

 

When looking at those I deem successful, I see one commonality every-single-time.  They are consistent.  Are they hard working?  Generally, yes.  But, every single of them is consistent in whatever it is they're successful at.

 

This follows with fitness, savings, career, education and so on.

 

What I took away from Ramit's point is to focus on the basics and ignore the noise.  And, just get busy, consistently, with no more excuses.

 

In regards to finances, this means, you could pour over whether to use a financial advisor, or not; which is the best investment - stocks, bonds, mutual funds, etc.; how much you should be tucking away; whether to invest in RRSPs/TFSA; whether to pay off your mortgage or save, etc.

 

You get the point, right? 

 

If you want to save, just start saving.  If you want to exercise, just get active. 

 

You don't have to make perfect choices - you'll learn as you go.  It's less likely that you'll regret your decisions and more likely that you'll wish you got started sooner.  Stop using the details and decisions as an excuse for not getting started in the first place.

 

Ramit says, "…Getting started is more important than becoming an expert".

 

Ignore the Latte Factor

 

You've heard of the latte factor, right?  If not, the latte factor illustrates how much money can be wasted by spending money on coffee each day.  Many people looking to straighten out their finances, either by cutting out their daily coffee or buying it while feeling guilty anyway.

 

Ramit thinks the latte factor is skirting bigger issues.  He says that while a person could cut out a latte each day, (potentially saving a few hundred dollars each month), their effort is wasted if they've ignored something as important as their credit score.

 

You see, a strong credit score can impact the rate at which you can borrow money.  Imagine a mortgage or car at a certain percentage.  Well, those with good credit often receive lower interest rates (as they're deemed lower risk).  So, all the while someone reduces their coffee habit to save money, when they might be, unbeknownst to them, flushing money (in the form of interest) down the drain.

 

His point is to focus your financial efforts on the big stuff - the stuff that can truly make or break a person financially.

 

Ramit walks through how to maximize credit scores, reduce the interest rates offered by lenders, and teaches how to use a credit card responsibly.  He is known for offering scripts to follow so you truly have step-by-step suggested methods to follow.

 

Ditch Budgeting, Work with Conscious Spending Instead

 

Although this is totally contrary to how I operate personally, this is certainly good advice for those uninterested in budgeting (and, there are many).  Ramit thinks budgets are crap.  He's right to the extent that only certain personalities are likely to stick to a budget.  There are many people who spend responsibly (incurring no debt) and manage to save too - all the while doing it without a budget. 

 

Likely, for many people, Ramit's conscious spending plan is more effective than cramming budgeting down the throat of those who don't want it.

 

Conscious spending involves planning, in advance, where your money will be spent.  This includes savings, investing, rent (and other expenses), going out (entertainment), etc.  Since most of us spend, then feel guilty - a reactive approach - Ramit's plan turns this approach upside down.

 

If you're interested in getting your finances on track in only 6 weeks and like having an action plan for doing so, I highly recommend I Will Teach You To Be Rich.

 

Book #2

 

Millionaire Teacher by Andrew Hallam

 

I loved this book because the author was a normal, relatable person -  a former High School English Teacher, from Vancouver Island.  In addition, I like that he went to great lengths to make the subject of investing easy to follow - ditching the industry jargon and relating to those keen to learn, but lacking a robust foundation in the world of investing.

 

He details 9 Rules of Wealth he used to become a millionaire by his 30's. 

 

Although I won't outline each rule here, I'll share some highlights as I saw them.

 

Spend Like the Rich

 

Hallam believes that our need for instant gratification is contributing to never-ending debt and limited savings.  Gone are the days of saving first, and buying later.  With quick access to credit, why wait?

 

Access to credit quickly dilutes our ability to know and see 'true wealth'.  Those with bigger houses and elaborate cars may appear wealthy, but are they?  An in-depth US survey outlined the median car price by U.S. millionaires to be $31,367 - likely, much less than those with much much less saved.  Famously, it was noted that, in 2006, Warren Buffett, bought the most expensive car he has ever owned: a $55,000 Cadillac.

 

Fun fact:  Buffett auctioned that same car in 2015 for $122,000 - likely one of the few people ever to have vehicle appreciate rather than depreciate.

 

The point of Spend Like the Rich is that the truly rich aren't driving the Lamborghinis and Ferraris.  And, that's because they've likely had a lifetime, of ensuring they have funds leftover to invest - again and again.  The appearance of extravagance often doesn't always correlate to true wealth.

 

Apparently, Fifth Graders Should be Able to Take On Wall Street

 

Does thinking about the stock market rattle you?  Do you understand it? 

 

I'll admit it, I don't.

 

Apparently, this over complication though is intentional.  Think about it.  There is a lot of money to be made by professionals who 'help you navigate your way through it'.

 

Financial advisors, planners, mutual fund managers, and the like, profit from those of us who are scared of the daunting and complex world of investing and the stock market itself.

 

Hallam, along with Warren Buffett, suggests that focusing on Index Funds is all any person should do to cover all their bases.

 

Where the stock market is comprised of thousands of stocks, an index fund will allow a person to have a small piece of every-single-stock rather than guessing which ones will dive or hit it big.  Index funds remove all the guesswork from complex investing - they purely track the gains and losses of the stock market as a whole.

 

Here is the reason Hallman suggests actively managed mutual funds are detrimental to building wealth:

 

  • Expense ratios reduce returns and are collected whether the funds earn money or not.  Many investors believe they only incur expenses ratios when their fund sees a gain - not so - you'll pay this no matter a gain or loss.
  • Trading fees reduce returns.  Often, the more trades, the more commission paid to an advisor. 
  • Sales Commissions reduce returns - these are generally paid upfront or upon selling.

 

For those in the US and Canada, Hallman actually outlines which big banks have index funds available through their online investing brokerages and he discusses how to determine how much of each index one should buy.

 

If you're interested in learning the basics of investing, I highly recommend Millionaire Teacher.

 

Book #3

 

You are a Badass at Making Money - Jen Sincero

 

As I've mentioned before, I've read a zillion books on personal finance.  Many of them belabor their point to maximize their page count, and I give up after I've gotten through the first third of the book. 

 

Eventually, I start thinking, "ok, I got it…enough already".

 

This book though was different.

 

Jen Sincero, uses crass, no bullshit language, to speak to how mindset can truly shift the outcomes in one's life.  And, in this case, wealth, specifically.

 

This was a book, I struggled to put down.  Here are a few takeaways:

 

Wealth and Philanthropy Aren't Mutually Exclusive

 

There seems to be the notion that those with wealth are greedy, uncaring, jerks.  Jen suggests that one of the obstacles to acquiring wealth is having a similar belief and failing to acknowledge you're worthy of wealth.  In addition, knowing that wanting wealth doesn't make you a terrible, soul-less, person.

 

Riddled throughout her book are powerful one liners that make my mind whirl. 

 

Here are a few:

 

Greed comes from the same lack mindset as poverty.

 

We all have seeds of unthinkable badassery inside of us, yet only some of us will allow ourselves to grow.

 

The action steps at the end of the first chapter ask you to detail how others would benefit should you become wealthy, and to list all the beautiful things that have happened in the world as a result of money.

 

If you don't think you deserve money, it will never manifest itself.  To get started, you have to work on your mindset.  Then, as a wealthy person, you can do great things for the world.

 

Painting a Mental Picture of What you Want Will Allow the Universe to Deliver

 

I've written about this before.  I'm not necessarily spiritual, but I do believe that attitude and intention, when paired together, are powerful influencers of one's reality.

 

Jen speaks to how important it is to let the universe know exactly what it is you want.  If you want money, you need to know why, and for what.  Where do you want to go?  What do you want to do for others?  How would your life be different?

 

If you're interested in learning about a wealthy mindset, I highly recommend You Are a Badass at Making Money.

 

With only three books you can overhaul your finances, learn the basics of investing and reset your mindset. 

 

Read, I Will Teach You To Be Rich by Ramit Sethi for a 6 Week Plan to get your finances in order.

 

Read, Millionaire Teacher by Andrew Hallman to learn about the basics of investing.

 

Read:  You Are a Badass at Making Money by Jen Sincero to learn about 'Mastering the Mindset of Wealth'


 

If you're interested in discussing the best practices for crafting a wealthy life, join us at The Anti Coupon Collective on Facebook.