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5 Investment Books That Will Change Your Life Forever!

5 Investment Books That Will Change Your Life Forever!

The Top 5 Investment Books You Need Today!

Disclosure: Some of the links I’ve posted in this blog are affiliate links. If you click on them and make a purchase, I will earn a commission for that purchase. This won’t impact you in any way and you will get the same price as you would without the link. I only link to companies and products that I believe in and that have had an impact on my own quality of life. The decision to make a purchase or not is completely up to you. Thank you for reading!

So, you’ve been enjoying the things you’ve read so far, but you don’t really know where to start?  What if there was a way to learn almost everything you need to know without spending years in school or collecting losses along the way?  What if it has already all been done before?  Fortunately for all of us, some rather intelligent individuals have already written about all of the things we need to know to be successful. I will give you the top five books to help you change your financial future forever!

Now, I need you to know that this isn’t going to be an all-inclusive list.  Just like with anything, though, take your time and learn the major concepts behind every book.  These are books that have had a significant impact on my life and my overall success.  My main goal here is that you can take away what I learned from these books and make use of it yourself. 

Again, this is not an exhaustive list, but I do believe that these are books that will really help you get started down the right path.  My goal is to give you all of the tools and resources you need.  The 5 books that follow will provide you with all of the information that you need to succeed.

Are you ready to get started?  Awesome!  Let us dive into the first book of the day.

Rich Dad Poor Dad

Have you heard about Robert Kiyosaki’s Rich Dad Poor Dad?  It is one of the most sought-after books in personal finance.  This was one of the cornerstone books that I read a long time ago that helped me see things differently.

The book is Robert’s story about how his “Rich” dad and his “Poor” dad see the world.  He discusses how his highly educated but “Poor” father looks at a situation and then compares how his “Rich” though street-educated father approaches the same scenario.  He then shows how his friends’ father or “Rich Dad” dropped out of school and became worth millions. When he compares his two ‘fathers,’ he shows how each tackles different situations and approaches and conquers those challenges.

There is a lot of wisdom scattered throughout the book.  There is far too much for this simple review.  My goal is to touch on the top 5 pieces of information that I believe you can find value in today.

Lesson #1 The Rich Don’t Work For Money, They Have Money Work For Them

This is the biggest key to life.  Often, I talk to folks, and the most significant issues that they seem to face are that they have never set aside assets to help them achieve success.  You will never find success until you start paying yourself first. 

I’ve talked about how each dollar bill is a financial freedom fighter.  If you aren’t producing more freedom fighters yourself while working, it is hard to have them fighting on your behalf.  Our goal should always be to use the power of compounding to help us achieve our dreams in life.

Lesson #2 Rich People Buy Assets, They Don’t Purchase Liabilities

This is an age-old question that many people face.  When you look at your Assets and Liabilities, you should have the bulk of everything you own on the left side of the balance sheet.  The problem with most people is that they buy everything on the right.

The ones destroying their financial future spend all of their cash flow on the brand new cars.  They purchase a house that is bigger than they need and more than they can afford.  When you start acquiring liabilities, you have no money to set aside for your financial freedom plan.

This is the most significant factor that keeps poor people impoverished.  Their outflow is equal to or greater than their income.  Until we can solve this problem, you can never start saving for your financial future.

Lesson #3 Mindset Is Everything To The Rich

“Whether you think you can, or you think you can’t – you’re right.” Henry Ford

I think this sums it up quite well.  Most of us are brought up with our parents telling us, “We can’t afford that.” And whatever ‘that’ is, doesn’t really matter.  The answer is always no.

When it comes to the Rich mindset, they take the thought of, “How CAN I afford it?” When you start asking different questions, you start finding different answers.  You need to change your mindset about money.  The answer should never be that you can afford it.  You need to ask yourself if you could afford it, what value would this item introduce into your life.

This could be the added benefit of greater cash flow.  Maybe it helps you to become more efficient at what you’re doing.  Buy things that bring value to your life, and you will see your life change dramatically.

Lesson #4 Knowledge Can Make You Rich

Robert Kiyosaki often compares physical health to mental health.  If you don’t take care of your physical health, it is hard to feel and be healthy.  When it comes to increasing wealth, spirituality, or anything else, if you don’t exercise your mental health, you won’t grow in other aspects, like wealth.

Many people believe that when you graduate from high school or college, that your learning stops.  In truth, your education should only just be getting started at this point.  The more you develop your mental, physical and spiritual self, the more successful you will become.

Lesson #5 Build Your Business, Or You’ll Be Stuck Building Someone Else’s Business For Them

One of the primary principles of the book is the Cashflow Quadrant.  What this really touches on are the four ways to produce income.

  • Employee – You have a job
  • Self-Employed – You own a job
  • Business Owner – You own a system
  • Investor – You own investments

As an employee or when you’re self-employed, you are giving your time for money.  You only have so much time, which means you can only make so much money.  As a business owner and an investor, you are using someone else’s time and money to make you money.  This is how you separate your income from your time.

Simple Path To Wealth

Simple Path to Wealth is a book that is touted by the FIRE community.  J. L. Collins masterfully puts together a book that touches on the behavioral aspect of investing, mixed with the technical aspects you need to be successful. 

The truth is, you don’t need to have a bunch of fancy stocks and bonds to be successful in the market.  Most of the time, folks who are buying and selling stocks fail.

Lesson #1 It’s Not What I Can Do For My Money, But What My Money Can Do For Me

Like most personal finance books out there, there is one rule to rule them all (I know, I know, but I recently watched Lord of the Rings!), and it all revolves around mindset. 

It doesn’t matter if you’re making $1,000,000 a month. If you’re spending $1,000,000 a month, you aren’t able to grow your wealth.  If you ever stop earning income, you’ll be dead broke, just like the rest of the world.

The big point that J.L. Collins talks about is how we view money.  In truth, we need to approach our assets differently.  We really need to stop thinking about all of the stuff the cash can buy for us today and instead look at what those same dollars could make you through investments.

Lesson #2 The Importance Of F-U Money

You can see where we talked about F-You money here and why that is important, but we will touch on it again from the authors’ perspective.  The fact is, when you’ve acquired enough cash, you no longer have to be at the beck and call of other people.  With enough assets or “F You” money, you no longer have to do something if you don’t want to.

When you’ve hit this level, you can quit your job.  You can travel.  You can do whatever it is you’ve always dreamed of.  And, you can keep working if you want to, you just don’t have to any longer.

Lesson #3 If You Don’t Need It, Don’t Buy It

In a pretty straightforward take on The Gambler, JL Collins hits it on the head, “Don’t buy shit you don’t really want to impress assholes you don’t really like.”

We are often getting that nice, brand new car because we want to project an image.  Most people driving around in brand new vehicles are also the same ones living paycheck to paycheck.  The wealthy don’t have a need to impress other people. 

Lesson #4 If It Is Complicated, Avoid The Investment

You want your investment strategy to be simple but not too simple.  By mixing in high-quality index funds, you can purchase shares in hundreds or thousands of companies, all of which are working to make you money. 

The advantage of investing in an index fund versus a single stock is you’re diversifying your risk over many companies.  This is where I think Vanguard and Fidelity both shine and can help you achieve FIRE.

We talked a bit about the All-Weather Portfolio and the Bogglehead Portfolio here if you’d like to take a look at that.

Lesson #5 Avoid Debt – It Really Isn’t Normal

The truth is, we live in a debt-driven society.  Go buy that house, and we’ll get you in a cheap 30-year mortgage.  You want that brand new gaming console, and you can’t afford it?  Just put it on a credit card and pay it off over time.

We come from a swipe now pay later society, but we don’t look at the real cost of all of this.  We must.  The less money you have going into saving for your future, the less opportunity you have to acquire F U money later in life.

The Millionaire Next Door

The Millionaire Next Door is a great book that touches on how anyone can become a millionaire.   There is a particular process that has been around for decades that you can follow.  It isn’t that it is an easy path, but with discipline, anyone can accomplish it.

Lesson #1 Time Is Your Friend And Wealth Doesn’t Happen Overnight

There are many mistakes we make as humans.  I think the biggest mistake is comparing ourselves to other people.  When people typically see someone who is wealthy, they assume that it is by luck or that they’re an awful person.  What they don’t see or understand is that person’s struggle.

Often, we compare ourselves at the beginning of our stories to the middle of someone else’s.  We don’t get to see the doubt, uncertainty, or fear they had before they became successful. 

With enough time, you can do anything.  We often over-exaggerate what we can do in a year, but we fall really short on what we can accomplish in a decade. So, build out a plan for financial freedom and then stick to it.  Your future self will thank you.

Lesson #2 You Don’t Need To Be Smart To Be Wealthy

There is this misconception that you have to have a high IQ or a top-tier degree to be successful.  This just isn’t true.  While both can undoubtedly help, most millionaires have reached this coveted status through hard work and discipline.

Millionaires tend to be problem solvers.  There is a common saying, “If you want to make a million dollars, solve a million problems.”

Lesson #3 Build A Budget And Stick To It

The truth is, if you don’t know where your money is going, then it becomes virtually impossible to plug the hole and stop the leaks.  Are you still paying for memberships you don’t use?  How much did you really spend at Starbucks?

This isn’t to say that you need to cut out pleasures. You just need to sit down and map out where your money is going.  When you’ve done that, you can then figure out where you can cut spending and increase savings.

Lesson #4 Many Millionaires Own Their Own Business

When you work for someone else, you cap your income potential.  You don’t have to be a small business owner to be a millionaire.  It is just much harder to do something that you love to do when you don’t get to build a business around the lifestyle that you want.

I’m not here to tell you to follow your passion or that every day will be a wonderland.  But if you can figure out what you love to do and help people simultaneously, you will be successful.  Just know that, like with anything else, you need to work hard and give it time.  Nothing will come overnight, and you can’t expect success if you haven’t put in the work.

Lesson #5 The Majority Of Millionaires Didn’t Inherit Their Wealth

Why is this important?  It means that many of the new millionaires we have in the world have gotten there on their own, with their own hard work and struggles.  Sure, some of them may have gotten there more painless than others, but they still managed to get there without their parents.

You can hit Financial Independence and Retire Early (FIRE) if you want to. You just need to sit down, map out what it is you want to accomplish, and go out there and take control of your life.  Find a mentor and reach for the stars.

Thou Shall Prosper

Though Shall Prosper was written with the thought of the Ten Commandments in mind.  While this takes a more religious slant on investing by speaking about typical Jewish principles, there is a wealth of knowledge in the book.

Lesson #1 Act Rich, Give More

Whether you are religious or not, helping others has always been important in society.  Many faiths believe in helping their churches through tithing.  I don’t think that you need to tithe to a church.  Any act of charity will help you get where you want to go.

There is an old saying that you need to learn to give more if you want to make more.  Mindset is everything here, and you must help others.  How much should you give?  Start with 10% and if you have more to offer, offer more.

Lesson #2 Surround Yourself With Higher Quality People

For the longest time, I have heard that you are the average of the four people you surround yourself with.  I read it in 4 Hour Work Week, a book that started me on my self-development journey ages ago.  This also coincides with something that a teacher once told me.  The only difference between an education from Harvard and your local community college is the network of people you meet.

Take time to build up a strong network of individuals.  Be interested, not interesting.  Make friends and be a friend.

If you follow these simple principles, you will find that people love helping you reach your goals.  Remember, people below you want to pull you down, but people above you are trying to pull you up.  Be careful which hand you reach for.

Lesson #3 Believe In What You Do And That You’re Worth It

Many people struggle with the business of making money.  If you grew up poor as I did, we are repeatedly told that money is evil, and if you have it, you are also evil.  The fact is, when you are a moral person, you can grow their assets and use that wealth to give more. 

Just like you wouldn’t expect a plumber to work for free, you shouldn’t expect yourself not to earn a liveable wage by using your expertise. Wealth is not the enemy. The more of it you have, the more people you can help.

Lesson #4 Do Not Pursue Perfection

This is probably the hardest for those of you who are high achievers.  It doesn’t matter if it is a blog post or budget planning. Most of us want our work to be perfect before we present it.  Here, there is no perfection other than God. 

It doesn’t matter what you believe in here. However, we, as humans, are not meant to be perfect.  We make mistakes, and that is okay.  We learn, we grow, and we help others!

Lesson #5 Never Retire

This is the one I found most profound.  If you think about it, you are doing a disservice to the world by retiring.  What makes Capitalism work is that we can build wealth, create jobs, take care of our communities and live the life we deserve.

If you retire, you’re taking away the opportunity to provide for your community, create those jobs and do good for others. 

Unshakeable

Unshakeable is the more comfortable to consume version of Money, Master the Game.  Many useful pieces come out of this book by one of the world’s most incredible motivational speakers.

Lesson #1 Invest In Index Funds

This was touched on in many of the books above, and that is because it is an important concept.  Through research, Tony found that over a 5 or 10-year time frame, the S&P 500 outperformed 95% of the mutual funds out there. 

When you invest in index funds, it gives you the ability to invest in hundreds or thousands of companies without having to have millions of dollars.  The other reason for index funds is…

Lesson #2 Try To Avoid Fees

Index funds, especially when you look at Vanguard Funds and some Fidelity Funds, typically have fees as low as 4 basis points.  That means for every $1,000 invested, you’re paying about $0.40 in fees.  In a mutual fund, that would cost you roughly $25. 

Lesson #3 Make Your Wealth Grow Exponentially

By combining lessons 1 and 2, you can make use of the compound effect.  This will allow your wealth to start to grow in a snowball effect.  Once you get the ball rolling, it will be hard to stop it so long as you get out of the way.

For many people, the mistakes that they make are letting emotion guide their financial mindset.  When you let your emotion dictate when to invest, you have to be right twice.  You have to be right when you buy, and you have to be right when you sell.

Take the emotion out of the picture and trust your gut.

Lesson #4 The Market Has Always Gone Up

Even in the worst of times, when we’ve seen the most extensive setbacks, there is one particular thing that always happens.  The market always has gone up.  Even when we worry that it might not bounce back, there isn’t a single time in history that it has never returned to new record highs. 

If the market ever truly tanked and never rebounded, your investment would have been worthless anyway as the U.S. dollar wouldn’t hold value.  Take advantage of the market and let your assets work for you.

Lesson #5 The Path To Happiness Is Through Giving

I know that we touched on this before, but I genuinely believe this is an important lesson.  You don’t need to be a millionaire to give to a cause that you’re passionate about.  When you give because you have a desire to help, that will by itself lead to happiness. 

The more you give, the more that will come back to you.  This is how we make the people, the community, and the world around us a better place.

We have reviewed my top 5 financial books above.  I tried to pull out the 5 key lessons that I took from each book, but in reality, there is so much knowledge in each book that I may not have done it justice.  Each of us has a different journey that we take.

My goal, as always, is to help you find financial success.  To find Financial Independence and if you have the option to retire early.  While you are still healthy, wealthy, and wise.  So that you can do all of the things that you love to do.

As always, did I miss something?  Any suggestions about the information?  Leave a comment below.

Stay Happy,

Renae

Disclaimer: Just My Little Mess does not provide tax, investment, or financial services and advice. The information is presented without considering the investment objectives, risk tolerance, or financial circumstances of any specific investor. It might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk, including the possible loss of principal.