Since last summer, my financial picture has drastically improved. I’m making more, saving more, paying more back, and on the road to being debt free.
These three books motivated me at different times, in different ways. They made me look at why I was broke, why my business was broke, and helped me discover my path for investing in the future.
Book 1 – You’re Broke Because You Want To Be by Larry Winget
When I read it: summer 2008
Main Takeaway: Your success is up to one person: You! How bad do you want it?
This book is an easy read. It’s short, and broken up nicely.
This book is NOT easy to read. It will really make you feel like crap. It will beat you down and expose every excuse you use to remain broke.
And it motivated me more than probably any other financial book I’ve ever read. At the time I read it, it was exactly what I needed. I had recently got my bankruptcy discharged, and was well, pretty darn broke. I wasn’t living on the streets broke, but I was broke.
The book doesn’t break any ground technique wise (spend less than you earn!), but the presentation gets the message through. You’re broke because you want to be. You’re broke because you spend too much on shoes, or fancy food, or tech gadgets. You’re broke because you won’t get a second job, or take a risk and start your own business.
This book isn’t for everyone, but it hit me at the right time and every few months I go back and look at some of the worksheets.
If you need some motivation financially, this is the book for you.
Book 2 – The E-Myth Revisited by Michael E. Gerber
When I read it: Fall 2008
My Main Takeaway: Build a business that can run and profit with YOU
If you own a business you must read this book.
If you are thinking about starting a business, you need to read this book.
This book pushed me to really step back and look at where I was spending my time at work, and where I needed to be spending my time.
It taught me most importantly how to systematize and document everything. I didn’t realize how much of my work I could have others (employees, contractors, accountant, etc) do and not feel guilty about that, until I read this book.
Book 3 – Killing Sacred Cows by Garret B. Gunderson
When I read it: Winter 2008
Main Takeaway: What you’ve been fed about saving for retirement is bunk
This book will rock your world if you’ve ever thought that maybe “buy and hold” wasn’t the best strategy for you. 
This book rocks the boat of:
- The Sacred 401K (Gunderson would tell you not to participate, even with a employer match)
- Insurance (He recommends Whole life vs. Term and spends a chapter explaining why)
- Savings (He argues cash sitting in an account not being touched is exactly what banks want)
The book has a lot of New Agey themes that could have been toned down a bit, but if you can gloss over those, there is some fantastic content here.
This book taught me to value cash flow (investments that produce cash…dividends, rent receipts, ect) over any other investment. It lines up very well with small business owners who see the value in investing in things they can control, rather than gambling your broker or some CEO to have a great quarter so your stock skyrockets.
Screw stocks. That’s the basic premise. And as someone who fell into the trap of believing stocks would make me wildly rich, I whole heartedly agree.
Invest in what you can control. Anything else is just gambling.
What finance books rocked your world?
I don’t mean what financial or business books did you like. I mean, which ones dramatically improved your financial life or changed how you approach investing/money?
{ 8 comments… read them below or add one }
Good looking books… I haven’t read any of them! But as for the latter: money that sits in a savings account at a bank is definitely what banks want, but not for any conspiratorial reason – yes, they make profits off of it by re-lending it to others…. but those others also include businesses and people just like us… so, it sounds to me like he’s either narrowsighted there or just taking a cheap shot to get attention with a pseudo-polemical point. In a bread and butter economy, there has to be savings sitting around in banks, or we end up with….. securitization, CDOs and all the other strange things that took the system down in Sept. 2008….. just saying this based on what I understand….
I love Larry Winget! I am not one to sugar coat anything, and am a believer in tough love so you can imagine that I watched his show every saturday when it was on. Money, to me at least, isn’t a thing to take lightly and people in debt definately got lofty with their money (I know I did!). So, Larry basically smacks us back into reality. Don’t take it too personally, just get back on track and follow his advice!
Also I have the Killing Sacred Cows book. I wasn’t too thrilled with it, as i’m not big on investing, but I think the key principle to the book that I do agree with is stop putting your money in with the stocks! Had he offered alternatives to where to use 401(k), I think I would have understood that book better.
I also like Suze Orman’s books/shows – she puts everything in simple terms and makes her advice “idiot proof”. Granted there are some things people don’t agree with, but not everyone’s advice is fit for everyone.
The cow book sounds like what comes out of the cow (not talking about the beef either). Last time I checked I can still control my 401k and where my money is being invested. When you’re young, mutual funds loaded with stocks produce income over a period of time. Later in life you have to start considering shifting to something safer to secure the growth during the prior 20 years of maturing. Many resources say invest 15% of your income, so if you can put up to 6% in a 401k and get the employer match, go for it. That still means 9% has to go somewhere else, like a Roth IRA or some other savings vehicle. I don’t buy gold either because it’s very expensive and the only ones making money are selling it, not buying it. Never put all your eggs in one basket, you can’t go wrong with that one.
Whole life is a good way to screw yourself later on. Since he seems to hate investing in traditional ways of course he wants a ‘cash’ vehicle like whole life. Term insurance, for 10 or 20 years is enough to get people covered should something happen to them during their prime earning years. You can get a term policy for way less than a whole life policy. Insurance isn’t always about getting something out of it. When’s the last time you got anything out of your homeowners/renters insurance? Do you frequently have accidents and use your car insurance?
You want to read something that will really make you think about retirement, go check out “The Wisdom of Great Investors”: http://www.nezperce.org/content/081024%20Davis%20Funds%20Wisdom%20ofGreat%20Investors.pdf The advice in this has far more value and common sense than anything you can read in a book. I trust the advice coming from people who have built wealth.
Read “I Will Teach You To Be Rich” by Ramit it was the best book I could have read. I actually performed two actions he recommended while reading the book, so it directly helped me out a lot from just reading it.
Rich Dad Poor Dad was the first book to really open up my mind to how I thought about money. From there, I have read many many many books and learned something from each one. The E-myth Revisited is one of my favorite books too as it teaches how to create systems instead of being the system. I am also a big fan of The 7 Habits of Highly Effective People, Mavericks at Work, and Economics in One Lesson. Check them out if you haven’t read them yet! Great, fascinating books!
The only one to rock my world is “Your Money or Your Life.” It actually changed my actions (for a couple of years anyways). But I’ve taken nuggets out of several others. “Rich Dad Poor Dad”, “Millionaire Next Door” & “Total Money Makeover” to name a few.
I think that Rich Dad Poor Dad, is full of a lot of fluff, no offense personally meant to the poster above. The book that really got me to change the way I thought about money and make some financial goals for myself, was: The 4 Hour Work Week. Great read.
The one book that changed my view about money was not a book, but rather a very short e-booklet called “10 Unwealthy Habits”, and it’s yours as a free download at: http://www.changethis.com/27.06.UnwealthyHabits . The one thing, which stuck with me the most from the e-book was the fact that though money can’t buy happiness, it can take happiness away from you (getting into debt from over-spending). Everyone should have a look at this e-booklet of about 20 pages, or so.