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Sunday, July 26, 2009

Four Books I Highly Recommend...

For those interested in personal finance, or just looking for some inspiration to get their financial journey to retirement started, here are four recommendations:

The Wealthy Barber by David Chilton - the first financial book that I ever picked up and still one of my favourites. The concepts of "pay yourself first" is what is highly stressed in this book, and through the characters and narrative at the local barbershop, it stresses how anyone can end up wealthy. An easy read and very informative!

The Automatic Millionaire by David Bach - very similar to the Wealthy Barber: talks about paying yourself first and the concept of the "Latte Factor", which is the rejoinder to people who say that they are unable to put aside $50 per week for savings. By cutting out the little expenses in your day, you can easily do this! One of the differences between Bach's book and Chilton's is that Bach recommends home ownership as a requirement to being wealthy, while Chilton says that by saving the difference between your rental expenses and buying a home will make you equally wealthy. The difference, in my opinion, is that paying a mortgage is a forced savings, and thus much easier. This book (and its many sequels) is highly recommended!

The Richest Man In Babylon - The concept behind this book is that all of the financial ideas that are popular now have worked for millennia. All of the financial rules about paying debt and saving and investing and ownership versus working are discussed in parable-type debate. I really enjoyed this book, but because of the language it is less personable than the first two on my list. For the frugal among us (and those who can read off the computer), this book is available as a .PDF (because of its age) right here.

Rich Dad, Poor Dad - Another excellent book that will hopefully shift your way of thinking about money. You become rich by increasing your assets. You become rich by ownership in things that make money. A house is not an asset because it doesn't make you any money (for the most part). Money should be working for you rather than you working for money. It is an excellent book because he uses his two "fathers" as comparisons: the formally educated father who has no financial sense but is a hard worker, versus the financially educated father who works hard and is wealthy but has no little education. It is a shift in thinking of putting all of your energy into being wealthy. Before you make a decision, ask yourself "how will this make me more profitable". Another great book.

All of these I read about every six months to re-inspire myself, and I heartily recommend any or all of these to you!

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