7 Must-Read Finance Books
It doesn’t matter whether you work with a fee-only financial planner, feel confident in DIYing your own money management, or are somewhere in between and just trying to figure it all out — these 7 books belong on your reading list.
When You’re Just Starting Out
Get a Good Grasp of the Fundamentals with Work Your Wealth: 9 Steps to Making Smarter Choices With Your Money
Okay, so maybe I’m a little biased on this title. But if you need some objective third-party opinions, check out that 4.8 out of 5-star rating and the customer reviews on my debut book.
Work Your Wealth covers 9 important foundational pieces of your financial life, and explains how to approach each to set yourself up for long-term success.
If you want to cut through the clutter, skip the fancy technical jargon, and just get to the point of what it takes to do the right things with your money, start here.
Dip Your Toes into the Investing Waters with The Random Walk Guide To Investing: Ten Rules for Financial Success
Burton Malkiel made the famous claim that a “blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”
His point? There’s endless research that shows active investment management (like stock-picking) fails to outperform passive management (like investing your money into an index) over time. One of his best-known books, A Random Walk Down Wall Street, is a great read for when you want to build your own investment portfolio to build long-term wealth.
But it’s also extremely in-depth and adds more complication than you need when you’re in learning and information-gathering mode. So pick up The Random Walk Guide to Investing: Ten Rules for Financial Success instead for a simpler, condensed, and extremely readable book.
You’ll get the dos and don’ts of getting started with investments so you can take the first step with confidence.
When You Want to Make the Complex Simple
Focus on What’s Important to You and Just Get Started with The One Page Financial Plan: A Simple Way to Be Smart About Your Money
Most people feel completely overwhelmed at the thought of tackling financial planning. It’s hard enough to know what you’ll want in 5 years. How are you supposed to know what you’ll want in 30 years — much less how to actually get there?
Carl Richards believes most financial plans are way too complicated and cause people to overthink their money and goals to the point of analysis paralysis.
His book, The One Page Financial Plan, explains that instead of trying to create this complex plan that details what you’ll do from now until retirement, you should focus on understanding what’s important to you. From there, you can write down meaningful goals that are based on what you value — not on how much money you think you should have in the bank by age 65.
And then, says Richards, you make your best guess about how to get there. Because no one knows what will happen tomorrow, the best any of us can do is align our money with our values and make the best decision we can right now, with what we know and understand today.
Reconnect with Timeless Wisdom with The Richest Man in Babylon
Originally published in the 1920s, George Samuel Clason’s The Richest Man in Babylon dispenses simple — yet powerful — pieces of financial wisdom in parable format.
He tells stories of characters who face challenges and choices to make in both business and personal finances, and those tales remain as relevant today as they were a hundred years ago (or even in ancient Babylon).
Take this snippet from one of the stories:
Thou do not all earn the same, [yet each man claims to have a lean purse or no money]. Some earn much more than others. Some have much larger families to support. Yet, all purses are equally lean. Now I will tell them an unusual truth about men and the sons of men. It is this: That what each of us calls our necessary expenses’ will always grow to equal our incomes unless we protest to the contrary.
Sound familiar? It should: today, we’d call this lifestyle inflation or lifestyle creep and we’d talk about the importance of keeping our expenses in check (even when we start earning more).
It’s a good reminder that personal finance is simple and straightforward. That doesn’t mean reaching financial success is easy. But we don’t have to make it harder on ourselves by adding in complication, either.
When You Are (or Want to Be) a Business Owner
Keep Your Business Finances Efficient with Profit First: A Simple System to Transform Any Business from a Cash-Eating Monster to a Money-Making Machine
Entrepreneurship adds a layer of complexity to any financial situation. Unfortunately, being good at “business” doesn’t automatically make you good at money management — for yourself or for the company you run.
Don’t try to fly by the seat of your pants, or wing it with informal, messy bookkeeping and sloppy money moves. Get Mike Michalowicz’s Profit First so you can learn a system for accounting that explains what to do with the earnings that your business generates.
The important thing to note here is to be sure to consult with your CPA on the tax percentages you’re setting aside. Michalowicz’s gives a great framework, but percentages (especially taxes) should be tailored to your specific situation.
Create a System for Saving with I WIll Teach You to Be Rich
Ramit Sethi’s style can be polarizing. But there’s no denying he’s a successful businessperson — in large part because he focused on nailing the personal finance side of his life from the get-go.
I Will Teach You to Be Rich explains how anyone can set up systems and processes to increase savings and consistently grow wealth.
This is a critical read for entrepreneurs because it’s so easy to justify spending more when you have a business. You can easily burn through far too much of your earnings in an attempt to “invest” in your business.
Yes, growing and scaling up may require some capital. But making sure you have a system for personal financial success in place first will help you better manage and allocate the money coming in through your business.
Learn to Work Your Wealth — as an Entrepreneur
Wishing you had the same kind of fundamental guide for finances as I wrote with Work Your Wealth, but specifically written for entrepreneurs?
If you’ve ever wondered about things like:
- the logistics of creating a startup and operating budget
- how much to pay yourself as an entrepreneur
- what your pricing should be
- how you should handle your own retirement planning as a business owner
..then you’ll want to stay tuned.
NBA Player Carl Landry Demonstrates the Value of Persistence in Life and Work
Written by: Jon Sabes
When you meet Carl Landry, stand-out college basketball player and nine-year NBA player, you imagine that becoming a professional basketball star was a straight forward run for the 6-foot-nine-inch power forward.
However, when you go deeper into Carl’s background, becoming a NBA professional was less than certain and little came easily to the 33-year-old from Milwaukee:
- He was cut from his high school team as a freshman and averaged less than ten points a game when he did play as a senior.
- He started his college career not at Purdue, but a junior college where it was not clear he would play.
- When he finally got to Purdue, he tore his ACL in his knee his first year and reinjured it the next year.
- While his family held a party for him the night of the NBA draft, he slept in the Philadelphia airport after missing a flight following a workout for the 76ers.
- In the NBA playoffs, Carl had a tooth knocked out, but came back in the same game to make a game-winning blocked shot as the Rockets beat the Utah Jazz 94-92.
Landry, who I interviewed on my podcast, Innovating Life with Jon Sabes (www.jonsabes.com), is a remarkable example of the value of “persistence.” In a time where technology creates the image that anything is possible at the touch of a button, persistence is an under-appreciated trait. When I spoke with Carl, I clearly saw someone for whom success has only come through a force of will that made him a NBA player, but it also made him a better player every year he played. That’s the kind of personality that has produced greatness in business as well as sports.
Carl was, in fact, drafted that night he spent in the airport. The Seattle Supersonics chose him as the 31st overall pick and then traded him to the Houston Rockets where he rode the bench for much of the first half of the season. When All-Star teammate Yao Ming was injured, he stepped in and played a key role in the Rockets astonishing 22-game winning streak (the third longest streak in NBA history). And, that season, after sitting on the bench for 33 of the first 36 games, he was named to the All-Rookie second team.
Carl was the first in his family to go to college. “I told myself that this was my ticket out, so I did everything I possibly could to be the best person in school and also on the court,” he said.
His family life in Milwaukee showed him what he didn’t want to do. “Just being honest with you, seeing some my cousins, peers, they went to work for jobs paying six, seven dollars an hour or they didn’t go to work at all and then living off welfare. I didn’t want that.”
When he was first injured, he had to contemplate the end of a career before it even got started. “When you have an ACL tear, it’s over…no more basketball,” he told me. “I said, God, give me health again and I’ll do everything I can to leave it all out on the line and be a successful individual.”
On my podcast, Carl pointed out another interesting lesson he learned in the NBA: Not doing things just to fit in.
“Fitting in was easy,” he said. “Doing everything that everybody else does was easy. If I stood out in some type of way, I’m going to have different results. I’m going to have stand-out results.”
That’s called the “Law of Contrast” and it produces that exact effect of changing the outcomes that everyone else is experiencing. Carl is smart, he recognized that differences make a difference, and doing whatever it takes is what is required to make real, meaningful differences.
Every off-season for the last 11 years, he has run a camp for kids in Milwaukee where he tells youth his story of hard work and persistence. “I always tell the kids to apply themselves and always be persistent,” he said. “If you dream, apply yourself and be persistent. With hard work, man, the sky’s the limit.”
When Carl says the sky’s the limit he means it. He is smart to recognize that it’s important to dream big, because if we don’t – we may be selling ourselves short. “You have to dream bigger than your mind could ever imagine,” he said. “I wanted a nice house. I wanted a nice car. I said, and I got all of that. So, what do I do, do I stop now? Maybe I didn’t dream big enough.” That’s a big statement coming from a kid who grew up to be the first in his family to graduate college and go on to be not only a top NBA basketball start, but a good businessman, father and someone who gives back to the community.
I’m convinced that in whatever he takes on as a basketball player or in his post-hoops career, Carl Landry is not going to stop getting better at whatever he does, and in the process of doing so, make the world a better place.
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