Category: Money

The Automatic Millionaire Summary

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Reads: 44

The Automatic Millionaire is an actionable, step-by-step plan for building wealth without being disciplined by relying on fixed percentages, small payments, and automated transactions.

Many of the world’s greatest investors have only one advantage over us normal folks: they were exposed to investing very early in their lives and took an interest in it. Warren Buffett bought his first stock, Cities Service, at eleven years old. Ray Dalio bought Northeast Airlines at twelve. Something similar happened to David Bach.

When he was just seven years old, his grandma took him to McDonald’s. Once they sat down and started eating, she told him there are three types of people in the world: those who eat at McDonald’s, those who work at McDonald’s, and those who invest in McDonald’s. Then, she helped him buy his first share of McDonald’s stock. What David learned was that, clearly, being an investor was the best way to succeed in life.

What a powerful story! And what an investor David became. Before eventually starting his own financial consultancy, he worked at Morgan Stanley as a vice president. As of today, he’s published twelve books, nine of them NYT bestsellers, with over seven million copies sold. The Automatic Millionaire is his most practical template for simple and efficient wealth-building.

Here are 3 lessons to help you achieve millionaire status:

  • Saving a little every day will go a long way.
  • Pay yourself first to make sure you take care of yourfinancial future.
  • Automatic payments allow you to invest in a disciplinedmanner without being disciplined yourself.

Would you like to set up your finances so that they run towards your goals on auto-pilot? Then let’s dig into what makes an automatic millionaire!

If you want to save this summary for later, download the free PDF and read it whenever you want.

Lesson 1: The Latte Factor is all you need to get rich over time.

As the saying goes, there are a million ways to make a million dollars. And while some might suggest focusing on only a few things, like earning more, killing debt, and investing as much as you can, others make good use of frugality.

For example, I remember Ramit Sethi rebelling against the idea of denying yourself your precious latte in I Will Teach You To Be Rich. David Bach, however, thinks that this latte money is the exact cash that could make you a millionaire.

He calls it the “Latte Factor.” It means that by saving just a little every day, you could retire early and rich. For example, if you put $10 a day – the equivalent of one $3.50 latte and a $7 pack of cigarettes – into a brokerage account that nets 10% a year on average, you’d have $700,000 after 30 years and $2 million after 40.

David has coached many clients and couples throughout the years, but no other family showed him the power of saving a little as clearly as the McIntyres. They established a retirement plan early on and gradually raised their savings from 4% of their income to 15%.

As a result, they accumulated about $2 million worth of assets by their early 50s, despite never earning more than $40,000 per year!

Lesson 2: The first person who deserves your money is yourself.

One way the McIntyres achieved so much with so little is the idea that no one deserved to get a chunk of their income more than themselves. What does that mean? Well, we all have unavoidable expenses. Bills we must pay. Taxes. And so on. But if we give all these other people and businesses our money first, there’s usually not much left!

So, instead of spending however little we have at the end of the month out of frustration, we should invest a fixed cut of our income into our dreams first. As long as you keep it small, there’ll always be enough money left to pay for everything else.

In the US and many other countries, you can even make use of pre-tax retirement accounts, which take money out of your gross income, not the net. With these, you might even have more money to spend after taxes than you’d otherwise have!

Even if these aren’t available, try to set up a system that automatically takes a certain percentage out of each one of your paychecks. David says that if you can manage to save and invest just 10% of your gross income or roughly one hour’s pay every day, you’ll end up just fine!

Lesson 3: Use automated payments for disciplined investing without willpower.

The good thing about each dollar that never shows up in your regular checking account is that you will neither miss it nor spend it. But why stop there? Don’t just auto-direct how much you want to save, but send it straight to the right places. For example, here’s how you could allocate 10% of your income each month:

5% goes towards an emergency fund until you’ve stored away six to 18 months worth of living expenses in cash.

2.5% goes towards paying down any existing debt.

2.5% goes into stocks and other investments.

The beauty of automating all this is that you only need to adjust the system whenever you’ve reached a certain goal. For example, once your emergency fund is complete, you can pay down debts faster, spend 1% on charity, or look into mortgage rates to buy a house.

Humans are creatures of impulse and habit. Whenever something requires discipline, the easiest way to consistently achieve it is to remove ourselves from the equation and eliminate the need for willpower altogether.

If you can do it with your money it just might make you rich.

My personal take-aways

I used to be frustrated with all this vastly differing advice on personal finance. Now I’m not. I realize there are many ways to manage your money. Which one you choose should not just be based on what your goals are, but also on which method of attaining them makes you feel most comfortable. Some folks are natural savers, others are better at earning more.

If you’ve always been frugal or don’t mind making little sacrifices, The Automatic Millionaire could be a great system for you.

Secrets Of The Millionaire Mind Summary

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Reads: 78

Secrets Of The Millionaire Mind shows you that your financial success is predetermined and hardwired into your brain since birth, and what you can then do to break through the barriers in your mind and adopt the habits and thinking of millionaires.

I first read T. Harv Eker’s name in Hal Elrod’s book, The Miracle Morning, because he was his mentor. Hal sometimes talks about living a “level 10 life” where you’re successful in all areas, not just one, and Harv is who he learned that from.

After riding an emotional and financial rollercoaster in the process of building, selling and losing over a dozen businesses, going from broke to millions and back, Harv started analyzing his own relationship with money and his habits.

As it turns out, there are some habits of the rich, which make or break whether you’ll become financially independent. Secrets Of The Millionaire Mind explains what’s going on.

Here are 3 lessons to get you started on changing your own financial mindset:

You naturally tend to replicate your parents’ income strategies.

If you want to control your finances, you first have to realize you’re the one at the wheel.

Don’t despise rich people.

Ready to flip the switch from pennies to profits? Let’s go!

Lesson 1: You probably try to make money the same way your parents do.

Imagine your Mum makes an awesome chocolate cake (I hope she does!) and you wanted to bake one yourself. You’d probably turn to her for advice and ask: “Hey Mum, how are you making that chocolate cake?”

Your mum would then tell you the recipe and help you get it right. But when you ask her why you’re doing things in a certain way, her answer might be: “Well, that’s the way I’ve learned to do it from your grandma, it’s the way we’ve always made chocolate cake.”

If that sounds familiar, then you’re in for a treat: Now look at how you make your money. Does it maybe also resemble almost exactly what your parents have done for years?

Not only is it very common for sons of doctors to become doctors, daughters of lawyers to become lawyers, but also for us to just take the same approach to our careers overall, that we’ve seen our parents take our entire life. If your dad has a regular job, you’ll probably also get a regular job. If your parents own a business, you’re likely to start one at a young age, and so on.

While entirely natural, replicating the income habits of our parents won’t work for most of us – we strive for more, after all – but what can you do to break old thought patterns?

Lesson 2: Realize you’re the one in charge, to start taking control of your money.

Let’s paint a mental picture. At the beginning of the month, your paycheck arrives. Now imagine every single dollar bill is a passenger on a bus, and over the course of the month, that bus drives along, and everyone gets off at a different stop. Some dollars leave at the rent stop, some leave at the grocery stop, some get off at the dry cleaner’s, and so on.

When you think of this metaphor, do you see yourself sitting in the very last row, just watching all of your precious dollar bills leave the bus, with someone else in the driver’s seat? It’s not uncommon for us to wonder at the end of the month “Where did it all go?” and feeling like a victim, because so many others have taken all of our money.

But the truth is, you’re the one in the driver’s seat, and have been all along. Realizing you’re the one who’s in control of all of your finances is the first step to making a change. Instead of sitting in the backseat, watching your money disappear, while blaming the government, your employer or the economy, step up to your job as a bus driver – you decide who gets off at which stop, no one else!

Stop complaining, analyze where you’re spending too much money and adjust accordingly.

Lesson 3: Don’t despise rich people.

This one struck me, because it was subtle, yet I could see the truth in it. If you hate rich people, you will never get rich.

Having a positive attitude towards wealth and money is a prerequisite of attracting it. That doesn’t mean you should show off all the time, but you can’t envy or mistrust current millionaires, while hoping to become one yourself. Thinking with such a scarcity mindset will block you from engaging with millionaires, learning from their material and truly embracing what they have to teach you.

I’ve done this before. I’d think of problems I’d have once I got rich, such as friends only wanting my money, or that being rich might make me a bad person – this is nuts. First of all, it’s not a problem you and I currently have, so don’t waste time and energy trying to solve it. Second, it’s very unlikely to happen.

So quit the complaints and start objectively looking at what you have to do, then take those steps, so you can start learning from the right people.

My personal take-aways

At first skim the summary of this book seemed a bit fluffy, but it actually has some really good insights, like lesson 3, which makes a lot of sense once you catch on, but is not something you’d think of yourself.

I can definitely relate to the predisposition part, we just adapt what our parents do in every facet of life, it’s natural, so if we want something different, we have to change our thought patterns.

I know the book has 17 “Wealth Files” which describe the habits and mindsets of millionaires in a lot more detail, I’m really interested in picking up a copy now!

Rich Dad Poor Dad by Robert T. Kiyosaki : Summary

Categories *FREE*, MoneyPosted on
Reads: 307
Robert Kiyosaki tells the story of his two Dad’s in his childhood. His own father and the father of his best friend. While he loved both, they were very different when it came to dealing with finances and  both men shaped his thoughts about money and investing. Rich Dad Poor Dad shows you how to start a journey to wealth by teaching you the right mindset, accounting basics and wealth building strategies, even if you’ve had no clue about personal finance until now. This book is a modern classic of personal finance. Although controversial and often heavily criticized, people have decided it’s worth reading – otherwise it wouldn’t have sold over 2 million copies. Rich Dad Poor Dad Lessons Lesson 1: The Rich Don’t Work for Money Lesson 2: Why Teach Financial Literacy? Lesson 3: Mind Your Own Business Lesson 4: The History of Taxes and The Power of Corporations Lesson 5: The Rich Invent Money Lesson 6: Work to Learn—Don’t Work for Money Many of us are too afraid of being branded as a weirdo, in order to exit the rat race. We let two main emotions everyone has around money dominate our decisions: fear and greed. That’s why we still stick to the outdated mantra “Go to school, go to college, get a job, play it safe.” when in reality no job is safe any more. For example, when you get a raise at your job, a wise choice would be to invest the extra money in something that builds wealth like stocks or bonds, which has medium to high risk, but also a very high reward. Maybe you find a good fund with a 60% chance to double your money within a year, but a 40% chance of losing it all. However, most likely your fear of losing the money altogether will keep you from doing so. But when your greed takes over, you might then spend the extra money on an improved lifestyle, like buying a car, and the payments eat up the money – this way you’re guaranteed to lose 100%. This already gives you a glimpse of how important it is to educate yourself financially. Since we receive no financial education in school or college, sadly, this is entirely up to you. Look around and you’ll see plenty of financially ignorant people in your own life. Just take a look at local politicians. Is their city in debt? Your mayor might be a great mayor, but unfortunately, no one ever taught him how to deal with money. For the same reason 38% of Americans don’t save anything for their retirement. The only way for you to counteract this is to start now. Today is the youngest you’ll ever be, so take a close look at what you can and can’t afford. This way you’ll be able to set realistic financial goals, even if it means waiting a few more years for that shiny new BMW. Next, adopt the mindset of “work to learn” instead of “work to earn”. Take a job in a field you have no clue about, such as sales, customer service or communications, to develop new skills – you never know what they might be good for. Set aside 5% of your income each month to buy books, courses and attend seminars on personal finance to start building your financial IQ. The first step towards building wealth lies in the mindset of managing risks, instead of avoiding them and learning about investments will teach you that it’s better to not play it safe, because that always means missing out on big potential rewards. Don’t start big, just set aside a small amount, like $1,000 or even $100, and invest it in stocks, bonds, or even tax lien certificates. Treat the money as if it’s gone forever and you’ll worry less about losing it. As soon as you start your journey towards wealth, you’ll realize that it’ll be quite a long one. That’s why it’s important to stay motivated. Kiyosaki suggests creating an “I want” and an “I don’t want” list, with items like: “I want to retire at age 50.” or “I don’t want to end up like my broke uncle.” Another idea is to pay yourself first each month. Take the portion of your salary you want to spend on stocks or your financial education, invest it and pay your bills afterwards. It’ll create pressure to be creative in making money and show you what you can afford. Use your money to acquire assets instead of liabilities. Assets are stocks, bonds, real estate that you rent out, royalties (for example from music) and anything that generates money and increases in value over time. Liabilities can be cars or electronics with maintenance costs and monthly payments, a house with a mortgage, and of course debt – basically anything that takes money out of your pocket each month. There’s no rush. Just stay at your full time job and “mind your own business”. In this case, your job is what pays the bills and your business is what makes you wealthy. Build your business on the side and use it to invest in assets until your assets eventually become the main source of your income. You can even file a corporation to be taxed only after you’ve earned and invested, instead of being taxed before investing as an employee and trying to live off what’s left. The most important thing is that you start today. You are your own biggest asset, so the first thing you should put some money into is yourself. My Rich Dad Poor Dad Review It is said that that most of the story is made up but that there’s so much criticism around Robert and the book. However, that doesn’t make it less of a good story or advice. The book isn’t too long either, and the initial story is mostly covered in the first 50 pages, so I highly recommend you get a copy of Rich Dad Poor Dad and read it yourself. ? Who would I recommend the Rich Dad Poor Dad summary to? The 9 year old who just got her first allowance, the 42 year old who’s worried about her job being secure and anyone who doesn’t know what the definition of an asset is. Rich Dad Poor Dad Summary “There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.” “Money comes and goes, but if you have the education about how money works, you gain power over it and can begin building wealth.” “People’s lives are forever controlled by two emotions: fear and greed.” “So many people say, ‘Oh, I’m not interested in money.’ Yet they’ll work at a job for eight hours a day.” “Thinking that a job makes you secure is lying to yourself.” “Intelligence solves problems and produces money.” “You must know the difference between an asset and a liability, and buy assets.” An asset puts money in your pocket. A liability takes money out of your pocket. “Illiteracy, both in words and numbers, is the foundation of financial struggle.” “Money often makes obvious our tragic human flaws, putting a spotlight on what we don’t know.” “Cash flow tells the story of how a person handles money.” “Most people don’t understand why they struggle financially because they don’t understand cash flow.” “The number-one expense for most people is taxes.” Higher incomes cause higher taxes. This is known as “bracket creep.” “More money seldom solves someone’s money problems.” “The fear of being different prevents most people from seeking new ways to solve their problems.” “A person can be highly educated, professionally successful, and financially illiterate.” “Many financial problems are caused by trying to keep up with the Joneses.” Once you understand the difference between assets and liabilities, concentrate your efforts on buying income-generating assets. “The problem with simply working harder is that each of these three levels takes a greater share of your increased efforts. You need to learn how to have your increased efforts benefit you and your family directly.” “Wealth is a person’s ability to survive so many number of days forward—or, if I stopped working today, how long could I survive?” “The rich buy assets. The poor only have expenses. The middle class buy liabilities they think are assets.” “The rich focus on their asset columns while everyone else focuses on their income statements.” “Financial struggle is often directly the result of people working all their lives for someone else.” “The mistake in becoming what you study is that too many people forget to mind their own business. They spend their lives minding someone else’s business and making that person rich.” “To become financially secure, a person needs to mind their own business.” “Financial struggle is often the result of people working all their lives for someone else.” “The primary reason the majority of the poor and middle class are fiscally conservative—which means, ‘I can’t afford to take risks’—is that they have no financial foundation.” “One of the main reasons net worth is not accurate is simply because, the moment you begin selling your assets, you are taxed for any gains.” “A new car loses nearly 25 percent of the price you pay for it the moment you drive it off the lot.” “Keep expenses low, reduce liabilities, and diligently build a base of solid assets.” According to Kiyosaki, real assets fall into the following categories:Stocks, Bonds,Income-generating real estate,  Notes (IOUs), Royalties from intellectual property such as music, scripts, and patents. Anything else that has value, produces income or appreciates, and has a ready market “Businesses that do not require my presence I own them, but they are managed or run by other people. If I have to work there, it’s not a business. It becomes my job.” “For people who hate real estate, they shouldn’t buy it.” Kiyosaki generally holds real estate less than seven years. Start minding your own business. Keep your daytime job, but start buying real assets, not liabilities. When Kiyosaki says mind your own business, he means building and keeping your asset column strong. Once a dollar goes into it, never let it come out. “The best thing about money is that it works 24 hours a day and can work for generations.” “An important distinction is that rich people buy luxuries last, while the poor and middle-class tend to buy luxuries first.” “A true luxury is a reward for investing in and developing a real asset.” Kiyosaki’s rich dad did not see Robin Hood as a hero. He called Robin Hood a crook. “If you work for money, you give the power to you employer. If money works for you, you keep the power and control it.” “Each dollar in my asset column was a great employee, working hard to make more employees and buy the boss a new Porsche.” Kiyosaki reminds people that financial IQ is made up of knowledge from four broad areas of expertise: Accounting, Investing, Understanding markets, The law “A corporation earns, spends everything it can, and is taxed on anything that is left. It’s one of the biggest legal tax loopholes that the rich use.” “Garret Sutton’s books on corporations provide wonderful insight into the power of personal corporations.” “Often in the real world, it’s not the smart who get ahead, but the bold.” Kiyosaki sees one thing in common in all of us, himself included. We all have tremendous potential, and we all are blessed with gifts. Yet the one thing that holds all of us back is some degree of self-doubt. In Kiyosaki’s personal experience, your financial genius requires both technical knowledge as well as courage. Kiyosaki always encourages adult students to look at games as reflecting back to them what they know and what they need to learn. “Games reflect behavior. They are instant feedback systems.” “Financial intelligence is simply having more options.” “The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth.” “The world is always handing you opportunities of a lifetime, every day of your life, but all too often we fail to see them.” Richard uses two main vehicles to achieve financial growth: real estate and small-cap stocks. “Simple math and common sense are all you need to do well financially.” “The problem with ‘secure’ investments is that they are often sanitized, that is, made so safe that the gains are less.” “It is not gambling if you know what you’re doing. It is gambling if you’re just throwing money into a deal and praying.” “Most people never get wealthy simply because they are not trained financially to recognize opportunities right in front of them.” “Great opportunities are not seen with your eyes. They are seen with your mind.” “You want to know a little about a lot” was rich dad’s suggestion. “Job is an acronym for ‘Just Over Broke.’” “Look down the road at what skills they want to acquire before choosing a specific profession and before getting trapped in the Rat Race.” “Education is more valuable than money, in the long run.” “The reason so many talented people are poor is because they focus on building a better hamburger and know little to nothing about business systems.” The main management skills needed for success are: Management of cash flow Management of systems Management of people “The most important specialized skills are sales and marketing.” “To be truly rich, we need to be able to give as well as to receive.” “Giving money is the secret to most great wealthy families.” “The primary difference between a rich person and a poor person is how they manage fear.” There are five main reasons why financially literate people may still not develop abundant asset columns that could produce a large cash flow. The five reasons are: Fear, Cynicism ,Laziness, Bad habits , Arrogance “For most people, the reason they don’t win financially is because the pain of losing money is far greater than the joy of being rich.” “Failure inspires winners. Failure defeats losers.” “Real estate is a powerful investment tool for anyone seeking financial independence or freedom.” “A great property manager is key to success in real estate.” The most common form of laziness is staying busy. “Rich dad believed that the words ‘I can’t afford it’ shut down your brain. ‘How can I afford it?’ opens up possibilities, excitement, and dreams.” “Whenever you find yourself avoiding something you know you should be doing, then the only thing to ask yourself is, ‘What’s in it for me?’ Be a little greedy. It’s the best cure for laziness.” Richard has found that many people use arrogance to try to hide their own ignorance. “There is gold everywhere. Most people are not trained to see it.” “To find million-dollar ‘deals of a lifetime’ requires us to call on our financial genius.” A reason or a purpose is a combination of ‘wants’ and ‘don’t wants.’” “Most people simply buy investments rather than first investing in learning about investing.” Richard believes one of the hardest things about wealth-building is to be true to yourself and to be willing to not go along with the crowd. “The rich know that savings are only used to create more money, not to pay bills.” “The sophisticated investor’s first question is: ‘How fast do I get my money back?’” If Richard could leave one single idea with you, it is that idea. Whenever you feel short or in need of something, give what you want first and it will come back in buckets. In the world of accounting, there are three different types of income: Ordinary earned, Portfolio, Passive Recommended Reading If you like Rich Dad Poor Dad, you may also enjoy the following books: How to Win Friends & Influence People by Dale Carnegie Secrets of The Millionaire Mind by T. Harv Eker Think and Grow Rich by Napolean Hill Buy The Book: Rich Dad Poor Dad

Money Master The Game Summary

Categories MoneyPosted on
Reads: 41

Money: Master The Game holds 7 simple steps to financial freedom, based on the advice of the world’s best billionaire investors, interviewed by Tony Robbins.

This book was given to me as a Christmas gift in 2014, right alongside I Will Teach You To Be Rich. Tony Robbins didn’t think he’d write another book after publishing Awaken The Giant Within in 1991. And for over 20 years, he didn’t.

But he felt heartbroken by the losses and suffering that resulted from the financial crisis in 2008 and knew he had to use his gift, his access to the top 1% of people in the financial industry, to help people manage their finances better.

After 4 years of research and interviews, he distilled the very best information he could find into nearly 700 pages of paper. The result? Money: Master The Game, a New York Times bestseller, which sold 1 million copies in its first year.

Here are the 3 biggest things you should remember to get started:

Never underestimate the exponential power of compounding interest.

Pick one of five financial goals to show yourself that financial freedom is within reach.

Diversify your investments by using a 3-bucket system.

Ready to get the financial education no one gave you in school? Let’s roll!

Lesson 1: Never underestimate the exponential power of compounding interest.

If you’ve read more summaries on here from the personal finance category you might think I’m preaching to the choir, but people really don’t understand this.

It’s because exponential growth is so big, it’s hard to grasp for the human mind. The best way to astonish yourself is to look at examples of this, like the folding paper to the moon story or how 10 early years of investing are worth more than 35 years of late investing.

This book makes another great example of this.

When Benjamin Franklin died in 1790, he left $1,000 for both the cities of Boston and Philadelphia, but only after investing it and not touching it for 100 years. Then they could withdraw a portion of it and had to let it sit for another 100 years.

After 100 years, Philadelphia withdrew $500,000 to build the Franklin Institute, a museum. The final balance for the bank account in 1990, another 100 years later, was $2 million.

Boston did an even better job at investing and has turned $1,000 into a glorious $4.5 million.

Insane?

Yes! So please, please NEVER underestimate the power of compounding interest.

Lesson 2: Show yourself you can reach financial freedom by picking one of five goals.

If I asked you what the perfect amount of money is for you to make, 9 out of 10 of you would reply with: a million dollars.

Why a million dollars?

We are drawn to this figure like flies to the light. But it’s just an arbitrary number.

Here’s one that’s much more important: $51,000.

Why?

Because it’s the average annual spending of an American adult.

If you can make $51,000 from investments, you never have to work again. That’s all it takes. A million is 20 times as much.

Doesn’t that make you feel at ease?

This makes it a lot easier to reach your financial goals.

How far you want to go is up to you, and setting specific goals will help you be realistic about what you can achieve in which period of time.

Here are 3 of the goals Tony suggests:

Make enough money from investments to pay for basic living costs: rent, food, utilities, a potential mortgage, and transport.

Make enough money from investments to pay for basic living costs plus fun, like travel, going to the movies, buying new clothes regularly, etc.

Make enough money from investments to be financially independent and never have to work again, i.e. $51,000 per year.

For number 3 you need $640,000 invested so that you’ll get 8% annual return – which is just a little more than the average return of the stock market in any given year.

You can never make a million dollars in your entire life, but still reach a point where you never have to work again.

Lesson 3: Use Tony’s 3-bucket system to diversify your investments.

Here’s a very simple way to allocate all of your investment money (10% of your income is a good portion and will get you quite far, quite fast, without hurting your spending too much).

Tony suggests having 3 buckets.

A security bucket.

A growth bucket.

A dream bucket.

The security bucket contains safe investments, like bonds, which won’t yield a lot of return, but are very unlikely to make you lose money.

The growth bucket is for riskier investments, like stocks, which often beat average returns in the long run, but are highly volatile in the short run, and might take you a while to pan out.

The dream bucket gets some of the profits you make from the other two buckets, for example, 10% of your portfolio value at the end of every year.

Making a lot of money is only meaningful when you actually use the money to live the life you want – so without a dream bucket, what good are the other two?

My personal take-aways

I Will Teach You To Be Rich is for people who aren’t ready to start saving but still want to start investing. Rich Dad Poor Dad is for those who have saved already but haven’t started investing. Money: Master The Game is for both the above, plus those who are already saving, already investing, but might not see the returns they hoped for.

There is something to learn from this book for everyone, from first graders to portfolio managers. You can read it cover to cover, or just pick out the sections which are relevant to you. You’ll learn the exact portfolio allocations of some of the world’s greatest investors, like Ray Dalio or David Swensen. The interviews with the 12 greatest investors of our time alone are worth 10x the price of the book.

The blinks are good to get the basic ideas of investing, but if you’re not willing to spend $20 on this caliber of a book, then you probably don’t deserve to get rich in the first place. Get it!

What else can you learn from the blinks?

Why you have to put money into your investments every single month, even if it’s just a few bucks

The difference between a fiduciary and a financial advisor and why one is better than the other

Two more financial goals you could reach for

When to invest in the first place

How to speed up the process

Why you need patience to win the game of money

Ray Dalio’s “All Seasons” portfolio allocation

How to insure yourself against losses

Who would I recommend the Money Master The Game summary to?

The 9 year old, who just got her first allowance, and has just started learning about the concept of money, the 20 year old, who still has a chance to start early and reap massive rewards 10 years later, and anyone who still lives paycheck to paycheck.

Buy this book–https://amzn.to/2DXg4Nd

I Will Teach You To Be Rich Summary

Categories MoneyPosted on
Reads: 80

I Will Teach You To Be Rich is a personal finance book for millennials and their parents, which shines with a simplified and automated money strategy that’ll ensure you save on autopilot, while allowing yourself to spend guilt-free on what matters most to you.

Ramit Sethi has turned from a geeky little Indian kid into one of the major personal finance gurus of the 21st century. What started as a blog in 2004 has become a multi-million dollar empire, selling courses and classes for tens of thousands of dollars a piece – all via email.

I got his book for Christmas last year, and liked his funny, sarcastic writing style along with his no-BS tips. I re-read the summary on Blinkist today, and want to share 3 major learnings with you:

You’re the only one responsible for your financial problems.

Know how much money you have coming in and then automatically direct it where you want it to end up.

Start investing today, even if it’s just $1.

Let’s go!

Lesson 1: Start taking responsibility for your money

Much like Rich Dad Poor Dad, this book starts with a necessary reminder to start accepting you’re the one in the cockpit, when it comes to your money.

Most people agree that they “should exercise more” or are “supposed to eat less junk food”. Even if they can’t make the change, at least the insight’s there. But have you ever heard anyone say: “I really need to get better at handling my money.”?

Rarely.

Because no one likes to admit that they’re bad with money. Even though a lot of people are.

Yes, there are plenty of people and factors to blame. Like the media, confusing you with all this contradictory information. Or the education system, which never taught you how to spend your money, save it, let alone invest it.

But excuses will always stay what they are: excuses. No matter how right they might be.

Saving and investing money is scary, and you might lose some money, but better to lose it now, rather than tomorrow. The younger you are, the more risk you should take on, because it’s still easy for you to make back the money.

And even though it will take a while to see results, if you can only afford to invest a little, you should never neglect the power of compounding interest.

So stop making excuses, and start taking responsibility for your personal finances. It’s the first step towards getting rich.

Lesson 2: Take fixed cuts off your paycheck and automatically spend them towards your goals

Sitting down every month to see how much you want to spend on what is a hassle. No one wants to do that.

Which is why Ramit suggests a Conscious Spending Plan. What he means by that is: Take cuts off your paycheck and automatically spend them towards the right things.

For example: Use 60% of your income to pay fixed costs, like rent, utilities, food and your credit card bill. Then, invest 10%, for example in stocks, your 401(k), or Roth IRA. Save another 10% for vacations, Christmas presents and unexpected costs.

This leaves you with 20% of your money, which you can spend on whatever you like, guilt-free.

Automate these processes and payments, for example I personally save $50 every month, which is automatically taken out of my bank account on the 1st.

This way I make sure I save at least $600 per year, and there’s no chance I’m spending that money accidentally.

As with any habit, removing the need for willpower makes it a lot easier to get it right.

Lesson 3: Start investing today. No joke.

Investing is hard. You have to read books, talk to people, and educate yourself. But you will regret every single day you waited to start doing it once you’re old.

Why? I found a great example, that puts it in numbers.

If you invest $5,000 every year (which is $417/month) for 10 years, from age 25 to age 35 and then never invest again, you’d still have more money at retirement, than someone who starts at age 35 and invests $5,000 every year UNTIL they retire.

The 25 year old starter invests $55,000 and ends up with $615,000 (given an 8% annual return, which is close to the average return of the stock market per year). The 35 year old invests $130,000 and ends up with $431,000.

Do you realize how insane that is? You can invest less than half and end up with one and a half times as much money!

Just by starting 10 years earlier.

So yeah, you better start today.

I Will Teach You To Be Rich suggests maxing out your 401(k) to get the maximum from your employer (they will usually match your contribution, up to a certain point) and then also investing in a Roth IRA, another form of retirement plan, but one that you control, and lifecycle funds, which invest your money automatically, shifting from riskier to safer investments as you age.

Soon after I read Money – Master The Game by Tony Robbins, which recommended index funds. James Altucher likes stocks and cash.It’s complicated. No arguments there. Which brings me right back to lesson 1.

Start taking responsibility and act today.

Final thoughts

Rich Dad Poor Dad teaches you the investor mindset, once you’re ready to invest. I Will Teach You To Be Rich teaches those who aren’t. There’s plenty of great starting points in this book, for those who struggle with swiping their magic credit card too often and have no clue about saving, let alone investing.

I like that the book makes room for spending on what you enjoy, and eliminating temptations by simply automating as much as possible. Whatever’s left you can spend however you want. The summary is short and to the point, but of course stripped the humor out of the book, so if you like the summary, go for the book.

Buy this book– https://amzn.to/2EgcPBQ

Charlie Munger Summary

Categories Experiences, MoneyPosted on
Reads: 87

Charlie Munger teaches you the investment approach and ideas about life from Warren Buffett’s business partner and billionaire Charlie Munger, which the two have used for decades to run one of the most successful companies in the world.

If you don’t know who Charlie is, I bet you still know his business partner too – because it’s non other than Warren Buffett.

For decades, Charlie and Warren have worked together to build their investment company, Berkshire Hathaway, into the 5th most valuable company in the world. They compliment each other, share strengths and compensate each others weaknesses in the process of picking the best companies in the world and buying them at a discounted price.

Trent Griffin has condensed everything he could find from interviews, company reports, speeches, writings and other people’s comments about Munger into this book, which leaves you and me a rare chance to learn about how a billionaire approaches both investing and life.

Here are 3 lessons from Charlie Munger:

Stick with what you know.

Don’t just do something, stand there!

Try to educate yourself across a big range of disciplines.

Want to learn from one of the wisest man on the planet? Here we go!

Lesson 1: Good investors stick with what they know and stay inside their circle of competence.

Just like Warren, Charlie believes a good investing approach comes from accepting your limits and sticking with what you know. If a stock analyst tries to sell you on Facebook one week, a pharmaceutical company the next, and a car manufacturer after that, all kinds of alarm bells should ring in your head.

First of all, every single industry on this planet is incredibly complex and hard to understand by now, so there are very few people who are knowledgeable about more than one.

Second, the financial nature of any single investment is pretty complicated too, so an “expert” might often try to sell you on something she herself doesn’t even fully understand.

At Berkshire Hathaway, Charlie and Warren take Benjamin Graham’s value investing approach of waiting for a great company to trade at a price that’s below what it should be. Only if they understand the core business, the company’s values and what management is up to, do they invest.

The model is simple, but not easy. It leaves them with only three buckets for potential investments. In, Out, and Too Tough. The first two are self-explanatory, the third one is for investments that might be good choices in the future, but aren’t understood well enough by Charlie and Warren right now.

Don’t try to invest in anything that moves. Stick with what you know and be patient in letting the right companies find you.

Lesson 2: Don’t just do something, stand there!

As you can guess, the above model requires one thing above all else: patience.

You might know the classic saying: “Don’t just stand there, do something!”

When it comes to investing, this is bad advice. The companies that fit Charlie’s and Warren’s investment criteria are far and few between, so he likes to say the opposite: “Don’t just do something, stand there!”

In investing as in life, a lot of your time will (and in this case should) be spent waiting. Kind of like waiting for a bus – you never know when the next one’ll show up, but you have to be ready.

Of course most people believe waiting to be unproductive, so instead of just gathering information and keeping their cool, most investors rush from one trade to the next, accumulating nothing but losses, fees and taxes, while the great investor just waits and reaps all the profits to be had from just a few trades per year, as long as they’re the right ones.

Lesson 3: Build worldly wisdom by learning from a wide range of disciplines.

What’s probably even cooler than Charlie’s knowledge about investing is his knowledge about life. He tries to accumulate something he calls worldly wisdom, which is really just a set of mental models (like these) he built for himself, coming from a vast variety of different disciplines and fields.

Psychology, economics, mathematics, history, biology, physics, philosophy all take a different look at the world. What unites them is that there’s wisdom to be found in them. If you take them as different lenses to view the world through, you can take the right one at the right time, and even combine them, if you have to. This can be an advantage over other people’s assessment of any given situation.

But to do so, you have to go beyond merely studying facts and figures. You have to look at the core questions, answers and ideas of each discipline. Things like why people study these topics, how they structure what they learn and how they use it.

If you have a few core principles at the ready, you can reason your way to the answers to many complex questions, which other people can only scratch their head about, by relating important ideas from different fields to one another and seeing the world as it really is, instead of just from one, limited, narrow point of view.

My personal take-aways

It’s hard to find lots of information about Charlie. He doesn’t speak in public too much and over the years, much too little has been compiled about him and his work. I think there are very few people on this planet that deserve to be learned from more than him.

Note: One of the best ways to learn more about him (besides this book) is this commencement speech.

The Richest Man in Babylon

Categories Money, Top 10Posted on
Reads: 43

The Richest Man in Babylon

by George S. Clason

Print | eBook | Audiobook

The Book in Three Sentences: Save at least 10 percent of everything you earn and do not confuse your necessary expenses with your desires. Work hard to improve your skills and ensure a future income because wealth is the result of a reliable income stream. You cannot arrive at the fullest measure of success until you crush the spirit of procrastination within you.

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The Richest Man In Babylon Summary

1-Sentence-Summary: The Richest Man In Babylon gives common sense financial advice, which you can apply today, told through tales and parables from the times of ancient Babylon.

Read in: 4 minutes

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The Richest Man In Babylon Summary

George S. Clason was a soldier, businessman and writer. The Richest Man In Babylon is his most popular piece of work, consisting of numerous parables, metaphors and stories set in ancient Babylon.

Originally published in 1926, the advice in this book is still as sound as it was almost a century ago.

The Babylonians discovered many of the basic principles behind wealth, such as saving a small part of your income each month, investing it wisely, learning how to lend money instead of borrowing it and how to protect your wealth.

Here are 3 lessons that you can apply right now to start building wealth:

Live below your means.

Learn how to be lucky.

Never take on debt.

Ready to become the richest man (or woman) in Babylon? Let’s go!

Lesson 1: Live below your means.

What is it that makes rich people rich?

I’m not talking about the kids of millionaires or oil sheiks, who’ve always been rich.

I’m talking about the people who, after working hard for a few decades, can walk out the door of their job and never return again, because they can live off the wealth they have accumulated.

Do they stuff every penny they earn into their mattress? Or do they just work abnormal hours no one can keep up with?

The truth is in the middle.

Wealthy people develop their riches mostly based on 2 things:

Living slightly below their means.

Investing the money they save well.

Living below your means is the first checkpoint you have to pass to even have the money to invest, so why not start there?

The goal of our Western economy and education system is for you to take on a 40-hour day job and then spend everything you earn.

But nobody said you have to play that game.

You don’t have to stop drinking the occasional Latte or going to the movies. But you can still spend less than you earn.

You know best where you’re spending money just for the sake of convenience, entertainment and gratification, that’s really not necessary and that’s exactly the money you should be saving and investing instead.

The Richest Man In Babylon suggests you save 10% of your income to invest.

I personally have been saving 20% of my income for the past year and it’s put me in a much more relaxed situation financially where I have some savings and even a small portfolio of stocks.

So look at your expenses and cut the ones that are really unnecessary and you’ll see finding those 10% is easier than you think!

Lesson 2: Learn how to be lucky by working hard.

The summary intro said “learn how to be lucky”. What a fascinating idea, isn’t it?

But how can this book teach you something that’s really not in your hands?

This is where most people are mistaken. No one ever said luck was something that can’t be manufactured. We just expect it to be.

That’s something called chance. A random occurrence with very little likelihood of happening, such as winning the lottery or being struck by lightning.

Luck, however, is based on opportunity and you can create more opportunities by working hard.

Consider Jerry Weintraub’s story.

This man called Elvis’s manager every day for a year to pitch him a tour he wanted to take Elvis on.

364 times, the man said ‘No’. But eventually, on the 365th day, he said yes.

Jerry didn’t get lucky. He worked. Every day he called, until the timing was right and the opportunity presented itself to him.

That’s how you become lucky.

Lesson 3: Never take on debt.

This should (in theory) be a no-brainer for anyone, yet we find ourselves in a world where the average American is over $150,000 in debt.

One of the first steps to build wealth is quitting the irrational self-talk that makes you justify purchases you can’t afford.

Money is a pretty rational thing and it’s about time you started treating it that way.

When you can’t afford a fancy new car, or a flashy TV, well, you can’t afford it.

But when you go out and get a loan to finance it, you’ll delay your journey to wealth for months or even years, because you now have to spend the money you save each month to pay off the debt, instead of being able to invest it.

Instead of solving your problems with loans, ask “how can I afford this?” and figure out ways to make more money or save more money, so you can buy the things you want.

Taking on debt has never solved any problems, it just creates more, so finish the spending spree and start saving!

Margin of Safety by Seth Klarman

Categories MoneyPosted on
Reads: 75

The Book in Three Sentences: Avoiding loss should be the primary goal of every investor. The way to avoid loss is by investing with a significant margin of safety. A margin of safety is necessary because valuation is an imprecise art, the future is unpredictable, and investors are human and make mistakes.

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