When I was growing up, my ideas about money were limited. I figured the keys to financial success were:
- Get a good education
- Get a good job
- Buy a house, since it’s an investment
- Save money in a bank account (or perhaps a company retirement plan)
- Work at said job for 30 or 40 years
- Retire and work no more
Since then, I’ve changed my outlook a little bit. I first started changing the way I think about things when I realized that I didn’t want to work at a 9-5 job. That’s when I first decided to go back to school and get a Master’s degree in something that would allow me to work from home.
Now I’m a freelance writer who makes a living from home. My husband is a university instructor, so he doesn’t work “traditional” hours, either. Along the way, as I was writing about money and trying to decide how to improve my financial situation, I read some books that changed the way I think about money.
Not everything in each of the books is something I agree with, but there are nuggets that changed my thinking in each of the following 5 books:
1. Rich Dad, Poor Dad by Robert Kiyosaki
This is a book that you have to take with a grain of salt. What I did get out of it, though, was that a primary residence — especially one bought with a mortgage — is not the same thing as an investment. This book encouraged me to stop thinking of my primary residence as an investment. Even though we bought a house in 2007, I never once expected it to be a money-maker. And, of course, it hasn’t been. We have to pay for maintenance and property taxes and the interest on the loan. These costs are are only partially offset by the fact that, in the United States, I get a tax deduction for some of them.
I stopped thinking it necessary to buy a house, and instead started thinking about what I could do with the money instead. If we move again, my hope is that we find a nice place to rent, and that we invest the money we save instead.
2. The Millionaire Fastlane by M.J. DeMarco
I really enjoyed this look at the way that many millionaires make their money. It’s not about working at a job for decades while you put money away in an account. DeMarco encourages you to take charge of your own financial future by not relying on a day job (that you can be fired from) and creating your own source of income. While I had already left the rat race by the time I read this book, it opened my eyes to the fact that much of the advice we get from gurus isn’t designed to help us get ahead now. In fact, DeMarco points out that many gurus didn’t earn their money from following their own advice. If all you do is use the savings account, you’ll never grow your wealth fast enough to truly enjoy it while you are young enough to.
3. The 4-Hour Workweek by Tim Ferriss
Reading this book got me thinking seriously about the type of lifestyle I want to live. When I read this book, I was already prioritizing my spending, and switching to a plan in which the most important things were paid for, while the other things were dropped out of the picture. But reading this book made me think more in terms of “What do I need to do to make this happen?” rather than coming up with reasons that I couldn’t accomplish what I wanted to accomplish. The 4-Hour Workweek put into perspective the fact that I can use my money as a means to an end — and that end can be a lifestyle I like.
4. The Intelligent Investor by Benjamin Graham and 5. The Little Book of Common Sense Investing by John Bogle
These two book changed the way I thought about investing. I thought investing was too hard, and that stock picking was a huge gamble — but I didn’t realize there were other ways beyond just going with your gut. These two books helped me see that you can invest, and find long-term success, and they changed the way I save for the long haul.
What books changed the way you think about money?