Personal Finance Book List: Edition #3
I love to read and recommending books to others is a privilege. Today I want to introduce you to some more fantastic books that I’ve read recently, to read on your personal finance journey. They cover a range of topics from understanding the role your emotions play in your financial life, to getting started with investing for the very first time.
Financial Freedom: A Proven Path to All the Money You Will Ever Need by Grant Sabatier
I’ve read bits and pieces from Grants blog Millennial Money over the years, and this book is a fantastic extension of his prior work. Grant takes you through the steps he took to go from broke on his parents couch to financially free in five years. An amazing feat, with plenty of lessons and stories to share from along the journey, this book is perfect for the ambitious young person looking to take control of their financial future (and not necessarily follow the conventional path).
I didn’t want to worry about money all the time or depend on a boss who might decide to fire me at any minute, just so I could pay my rent. I wanted to be in control of my own income and time. I didn’t want to put off travelling the world because I couldn’t afford it or I was allowed only 10 days of vacation a year. I wanted to be able to have enough time to really explore the world. I realised that if I wanted something different, I was going to have to do something different.
His plan is broken into seven key steps which are explained throughout the book:
Figure out your number
Calculate where you are today
Radically shift how you think about money
Stop budgeting and focus on what has the biggest impact on your savings
Hack your nine-to-five
Start and profitable side hustle and diversify your income streams
Invest as much money as early and as often as you can
When you have enough money, you have more space and time to explore the world, to connect, to reflect, to grow, and to feel alive. You have the freedom to create the life you want. A life with more time for the people and things that make you happy. A life with less stress and more options. A life you love.
Invested: How Warren Buffett and Charlie Munger Taught Me to Master My Mind, My Emotions, and My Money (with a Little Help from My Dad)
Invested provides you with a 12-month plan to financial freedom, and breaks down how to build your own investment portfolio. Danielle and her Dad discuss the basics of investing in companies in a light hearted way, and Brest it down over 12-months so it’s easily digestible. It’s interesting to read points of view that focus on building wealth through investing in individual shares, rather than passively investing in ETFs.
Allocating your money according to your values and supporting companies worthy of your investment, is reason enough to learn this practice and this method of investing. It’s a way to vote with your money, for the future you want.
On Fund Managers — The only incentive they have to do a good job is to be able to bring in more clients by showing as good a track record as their competition and not doing so badly that they lose clients. They feed you this fairy tale that you’ll make market-beating returns by paying their fees, and with rare exceptions, while a few people do make good returns for their clients, they only do it for a short time and the rest of the time they’re content to shadow the market. It’s not about making high returns, it’s about holding onto clients.
The Behavioral Investor — Dr Daniel Crosby
I first picked this book up because I was planning to interview Daniel for the How To Money Podcast and wanted to get some background info, however I ended up reading the entire book. Not only is it written in an interesting and conversational style, but Daniel manages to incorporate some really fascinating studies and stories into his book.
Financial news this design for clicks and eyeballs, not dollars and cents.
The Behavioral Investor is an in-depth look at how sociology, psychology and neurology all impact investment decision-making. I have included a few of my favourite snippets below, and I definitely recommend this book if you’re trying to understand how your behaviour and emotions impact your investments.
We have evolved to hang on to information that is scary and unusual, especially when presented in narrative form, as the media does so well. We live in a time when information is more available than ever, but the availability of information says nothing of its usefulness.
Become an Informed Consumer of Investment Media (excerpt from page 87)
Evaluate the source — does this individual have the appropriate credentials to speak to this matter or were they chosen for superfluous reasons such as appearance, charisma or bombast?
Question the melodrama — while volatility can be the enemy of good investing, chaos and uncertainty are a boon to media outlets hungry for clicks and views.
Examine the tone — does the report use loaded language or make ad hominem attacks? These are more indicative of an agenda than an actual story.
Consider motive — news outlets are not charitable organizations and are just as profit-driven as any other business. How might the tenor of this report benefit their needs over yours as a decision-maker?
Check the facts — are the things being presented consistent with best academic practices and the opinions of other experts in the field? Are facts or opinions being expressed and in what research are they grounded?
Feel free to let me know your favourite personal finance books in the comments below.
Until next time,
The information on this blog and website is of a general and educational nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision, as we are not an advisory service. We recommend you consult a licensed financial adviser in order to assist you. The information is based on assumptions or market conditions which can change without notice, and this will impact the accuracy of the information provided. This website and blog occasionally provides links to third party sites, aimed at helping you gather the information required to make an informed decision — we may receive payment for these referrals.