I started my financial education journey slightly more than 2 years ago after I decided that I need to have a better control of my finances. Prior to that, I had ZERO knowledge on investing, on how to manage my finances better, etc. I was just like any other individuals out whom since young, was “programmed” to accept what people told me at face value and not questioning them. I completed my education up to Bachelor’s Degree and I studied up to that level because I was supposed to, not because I wanted to learn something. There is this advice which I have been hearing over and over again that says,”Study hard, get good grades, get a high paying job and save for the future.”
This advice from the previous era, which I followed, didn’t help me a single bit. I was living from paycheck to paycheck and I am finding hard to save. The more I tried to save, the more my savings start to slither out of my control. In countries like Singapore, due to the high cost of living, it is near impossible to save as inflation is guaranteed every year and the workers’ salary do not match the rate of inflation and such. After so much frustrations, I finally decided that I should educate myself financially and learn how the wealthy managed to stay wealthy regardless of any economic situation. During the course of my learning journey, I had to make drastic changes to my lifestyle. Honestly, it wasn’t easy to make many changes and sacrifices but for the sake of my own future, I feel that it is a small price to pay for the greater rewards that will be coming my way. Every time when the going gets tough and I felt like giving up, I always reminded myself why I started this journey and would it be a waste if I give up after all the effort I have put in? Those 2 questions, which I keep reminding myself, have kept me going.
Now, let me share with you the top 5 books that I have read and applied in my daily life that have significant impact on me :
- Rich Dad, Poor Dad by Robert Kiyosaki
Photo source : www.richdadworld.com
Rich Dad, Poor Dad is the first finance book that I have read and it is the best finance book ever, in my opinion. Prior to buying this book, I browsed online for recommendations and majority recommends this book. This book has indeed lived up to its recommendations.
Rich Dad, Poor Dad is about the author’s 2 dads – one rich dad (author’s friend’s dad) and one poor dad (author’s dad). During the author’s upbringing, he was forced to choose between his poor dad’s or rich dad’s footstep. His poor dad is a highly educated civil servant whilst his rich dad is an entrepreneur who never graduated. Eventually, he chose to follow his rich dad’s footstep. His rich dad was able to create a multi-million dollar business from virtually nothing, using his financial knowledge and the power of his imagination.
This book focuses on the education and financial advice the author learned from his rich dad. It also shows how the rich don’t work for money, they force money to work for them. The rich acquire assets rather than liabilities. It emphasize on the importance of being able to differentiate between an asset and a liability. In order to be truly wealthy, the asset column must be strong and able to offset the living expenses. Most people believe a higher income will make them rich, but in reality, a strong asset will. Higher incomes will often lead to higher expenses, higher taxes, and more debt – something which I have experienced and has affected me greatly.
Much of the book is devoted to self-reflection – to reflect on whether our current actions are bringing us closer to getting rich or poor. This is a highly recommended book for those intending to start their financial education journey.
2. Tax-Free Wealth by Tom Wheelwright
Photo source : www.audiobooks.com
I felt that once wealth is accumulated, it is important to understand how the tax system works so that I could apply the principles to make my tax rate be as low as possible. Hence, I grabbed hold of this book.
Tax-Free Wealth is about the tax planning concept and how to use the country’s tax law to our benefit. This book tells how the tax laws work and how they are designed to reduce taxes which eventually, be able to legally eliminate our income taxes and drastically reduce our other taxes.
Let’s give you an example, a doctor (senior consultant) in Singapore earns an income of SG$300,000.00 per year. At the end of the financial year, a tax letter will be mailed to him/her asking to pay income tax. For that salary, he/she would have to pay SG$38750.00 to the taxman – that is about 1.5 months of hard earned salary gone.
Click here for the full tax rate
Another example, a personal investor in Singapore who earns SG$300,000.00 per year from capital gains through sale of shares or other financial instruments. At the end of the financial year, he/she gets to keep all of the gains. As stated in the Inland Revenue Authority of Singapore’s (IRAS) website, “Generally, profits or losses derived from the buying and selling of shares or other financial instruments are viewed as personal investments. These profits are capital gains and are not taxable. You need not report such gains in your tax return.”
Source : https://www.iras.gov.sg
From the 2 examples, it is obvious who is the winner. From my personal experience, indeed, when I invest, my tax rate is lower comparing to the time when I did not invest at all. This is another book that I recommend to be in your collection.
3. Think and Grow Rich by Napoleon Hill
Photo source : www.goodreads.com
Another book that captured my attention is none other than the all-time classic, Think and Grow Rich. Just like the book Rich Dad, Poor Dad, the author discussed on how he came to learn the secrets of success. The author shares his story of being challenged to interview other successful people and compiling their strategies into a philosophy of success.
This book brings the experience of many men of great wealth, who began from scratch and with nothing to give in return for riches except thoughts, ideas and organised plans. We may have thoughts and ideas but if we failed to plan, it is as good as planning to fail.
The strategies of success written is this book has definitely awaken my subconscious mind and has helped me to experience a changed life – a life unlike before. I am now more open to ideas and opportunities whilst going through life with more understanding and harmony.
4. Money, Master The Game by Tony Robbins
Photo source : www.goodreads.com
Over the years, I got to know about this author whilst I was browsing on Youtube for some motivational videos. What got me attracted to him, is his burning passion whenever he speaks. I was browsing for some books when this book got my attention. Without a second thought, I grabbed hold of it.
Money, Master The Game gives an excellent overview of the key areas of our finances which we need to assess and do something about, in order to be independent financially. The author also shares useful tips on how to be financially independent with this simple formula : earn more, spend less and automate the investing process.
If financial freedom is important you and it is what you are seeking, this book can be a small and wise step towards it – which I highly recommend.
5. Secrets of Self-Made Millionaires by Adam Khoo
Photo source : www.adam-khoo.com
I find that this book might be easy for newbies to learn about finance since it was written from a Singaporean’s perspective. Secrets of Self-Made Millionaires is written Adam Khoo, who became a self-made millionaire at the age of 26.
This book is very practically and comprehensively written on how to create, manage, multiply and enjoy our money. It is a must read for anyone who wishes to get out of the rat race and onto the path of financial freedom. I have been applying the principles taught in Secrets of Self-Made Millionaires and Money, Master The Game in my daily life and now, I can confidently say that it is starting to grow dividends. Both books are actually conveying roughly the same principles but one focuses on the US market and the other, Singapore market.
There you go, my fellow readers. These are the books I read that have increased my financial literacy and IQ tremendously over the years. Over time, after reading the books, you desire to chase your dreams of financial freedom. Be prepared to get uncomfortable while you are stepping out of your comfort zone. The change which you will encounter will not be easy and smooth sailing but if you remain steadfast in pursuing those dreams of yours, you will achieve those dreams eventually. Avoid getting into any get-rich-quick schemes where people promised you a certain profits when you invest in certain amounts. I had a fair share of bad experience in these kind of schemes and instead of earning, I was losing money. Always remember that the key to success, is by educating yourself financially – not through any get-rich-quick schemes.
Start your financial education learning journey today! Click here for access to some of the greatest finance books.
