3 books that will change how you think about money
These are three books that I’ve read that will influence your understanding of money. The basis of any personal financial plan must be just that, a plan driven by goals. As I mention in my post “Take charge of your Financial Education!” It’s our personal responsibility to educate ourselves and be clear on our why’s.
“Money is something we choose to trade our life energy for.” – Vicki Robin
Vicki Robin and Joe Dominguez talk to us about how to align your values with your wealth. This book encourages you to think about the difference between MORE and ENOUGH. It’s an important distinction that has profound implications for your happiness and living your values.
Vicki Robin makes an important point that is encapsulated by the quote: “Money is something we choose to trade our life energy for.” If you think about what this means, and the fact that time or life energy is the one thing that no one can get more of, it will force you to think about how you spend that time differently. This concept leads into the discussion around MORE and ENOUGH.
Much of the book goes into the tactical work around budgeting, reducing spending, and calculating your net worth. These are all important exercises, but to me the most important message is about trading life for money.
Key takeaway here is, assess your values, realign your spending habits accordingly, and work towards financial independence. This is an important book for the F.I.R.E. movement (Financial Independence, Retire Early).
Recommended read!
“The goal of most investors should be to stay rich, not to get rich.” – Morgan Housel
Morgan Housel in this book goes into the workings of our financial psychology. Why do we have our beliefs around money? How can we use this introspection to see our risks and rewards differently?
Housel underscores the impact of emotions on financial decisions. Further, he makes the case that we are largely a product of our times and culture. We can’t understand another’s thought process if we haven’t lived through their experiences.
Key takeaways are the power of compounding (See this blog post), learning from our mistakes, and effective risk management. All of this requires a high level of self-awareness that comes from education and introspection.
Another recommended read!
3) “The Black Swan: The Impact of the Highly Improbable”
“The inability to predict outliers implies the inability to predict the course of history.” –Nassim Nicholas Taleb
Nassim Nicholas Taleb, in “The Black Swan” explores how unpredictable and rare events can have high impact and profound consequences on many things. This book isn’t exclusively about financial markets, but he uses money as a key example of his message. There “black swan events”, which are unforeseen and defy expectations, play a significant role in shaping history and human affairs. He challenges traditional wisdom and advocates for a heightened awareness of uncertainty and the real (and often ignored) limitations of statistical models. Taleb urges us to understand the unpredictable nature of human affairs and based on that we can develop better strategies that can withstand the impact of rare and unforeseen events.
Think personal finance here, but I can hear you preppers, and you singularity folks too. The go bag is something we hope to never use, but thank goodness we have it when the fire, storm, or whatever crisis hits. You need a financial go bag my friends.
Yet another recommended read.
All three books recognize the uncertainty inherent in financial planning and emphasize the importance of being prepared for unforeseen events. In blending these messages, from diverse perspectives, we find a deeper understanding and appreciation for wealth. It’s an understanding that encompasses mindful choices, a balanced mindset, and resilience in the face of unpredictable events.
What do you think?
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