Best books for money management?

[T. Davis]

View attachment 42742

Love the quote in this ad!

 

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[WJK]

I was sending money to family in Ukraine (past Friday). Using Western Union means going to one of those Money Mart shops. In front of me was a 20 something year old labourer with a hard hat etc. I heard everything he talked about with the clerk behind glass and realized how some peoples lives suck so bad.

He only had a cheque for $800 that he needed to cash to pay rent that same day. He also had a loan with these loan sharks Payday money mart people. It’s probably worse than credit card.

And yet, when the clerk lady told him a super helpful tip to save money! All he had to do was change the dates for payments to match his paycheck schedule to avoid penalties (pay only interest if you are on time). Consider that his account is always overdrawn - meaning, both the bank charges penalties for that and the loan Money Mart people do the same! It’s insane how much he’s wasting given how little he has.

And guess what. He replied “oh I didn’t do it yet”
- why not?
- I’m just not that organized in my life

I felt sorry for him and also knew, his life will suck for a very long time.

You are 100% right, some people are destined to be where they are. Even when a solution is literally staring them in the face.

I see this type of problem all the time. I provide low to moderate-income housing through my residential rentals. Many times, my tenants are tenants rather than property owners as a result of their day-to-day decisions. I, like the clerk, can only suggest solutions to their problems.

 

[klaipeda]

Personal finance is a straightforward thing on paper. It's just addiction and subtraction. One rule it's elementary: don't spend more than what you gain.

There are some variables involved. If you grow up in a family with no money management culture, you'll grow up with money issues.

I have a friend with excellent money management, and he never read any book about personal finance.

In a nutshell, he constantly saves every month. He has a monthly budget for fun, and he keeps his lifestyle under control: no kids, no loans, no mortgage. He also moved out from Italy to the Czech Republic to reduce the expenses and taxes.

I didn't grow up in a wise money management family, and I had to learn all myself is reading books around. The "Barefoot investor" is great, even if it's tailored for the Australians.

Here are the main rules:

1) Keep track of what you spend monthly and yearly. Don't waste too much time tracking every cent, but have a good idea of where things are going. How much do you spend on groceries, bills, phones, cars, etc...

2) NO DEBIT. The best investment you can make is to get rid of your debts. It doesn't make any sense to invest, and at the same time, you have debts with interest ~10 or 20%. Get rid of credit cards, loans or other shit like that. Put every money you can into getting rid of debts.

3) Once you get rid of the debts, you can start saving. It would be great to save ~50% of the income.

4) Allocate a budget you can splurge on a monthly base. Drinks, games, whatever you like and enjoy. You can spend this money without regrets, and you need to have fun. You deserve that. (~10% of the income)

5) If you start to gain more, it becomes natural to add more expenses because now you can afford that. Think about that twice. What impact have on your costs? Do you need that? How much money do these expenses cut from your savings? What if you start to gain less? I like to think about that in relative value. If you want to buy a car, what is the cost compared to your savings in %?
Sometimes, you have to do mandatory things, but you can reduce the impact of the expense if you're wise. Need a new car? Try to buy a used one that is good and doesn't impact too much on your money balance. Unless you are already in the Fastlane, you have to think that your saving is investments to build your business.

These are the guidelines. You can have more bank accounts to manage the money your way.

The following are just guidelines. Adjust the % based on your situation.

~ Expenses: 50% (monthly and yearly)
~ Saving/Business: 30% (after removed the debt)
~ Fun: 10%
~ Emergency: 10%

Bonus:

Kids: wonderful thing to have a family, but it's also time-consuming and costly. Consider that you also have a wife/partner to deal. I have three kids and a wife, and I'm lucky and happy, but it's like running a marathon with one leg only.

Mortgage: we are fighting for the Fastlane here. I would stay away from the mortgage. If I were alone and young, I would live in a van for some years.

 

[SPM_ENT]

Profit First by Mike Michalowicz hands down.

I haven't needed to read anything else since I read it. That book helped me get one of my previous companies out of 300k in debt. In my current company using the system, I have cash flow for operating expenses, enough money to invest in the future, and take home a salary + distributions.

The business principles can be directly applied to your personal life in the same way.

 

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[Kevin88660]

I was talking to a friend last week who is in the slowlane. She tells me that everyone is priced out of a home in Phx now, citing this article.

74% of Arizona households are priced out of new AZ homes

New data from the National Association of Home Builders finds that about three in four households in Arizona would struggle financially to purchase a median priced home in the state.

www.abc15.com

But she's always broke and tells me that she needs to get a better job. She makes around $90k, which I tell her is pretty good money. Then she tells me she spends $300-$450 a month on coffee in the morning. She "needs" it every morning.
Then you combine that with getting your nails and hair done every month. It's no wonder she can't live off $90k.

I tell her that that $300-$450 could be invested or saved to get her into a home. I say, let me look at your finances and your budget. She tells me she doesn't want to talk about finances because she's not in the mood. Ok, so we talk about important stuff like NBA basketball or where to go for dinner.



Some people are just destined to be where they are at.

What coffee costs $12 a day in Phoenix? Does she mean a set meal or just a coffee can costs that much?

 

[biophase]

What coffee costs $12 a day in Phoenix? Does she mean a set meal or just a coffee can costs that much?

She gets 2 coffees, so I assume they are $6? I don't go to cafes or Starbucks' so I don't know.

 

[Two Dog]

Kids: wonderful thing to have a family, but it's also time-consuming and costly. Consider that you also have a wife/partner to deal. I have three kids and a wife, and I'm lucky and happy, but it's like running a marathon with one leg only.

Mortgage: we are fighting for the Fastlane here. I would stay away from the mortgage. If I were alone and young, I would live in a van for some years.

I'd rather run the marathon with no legs than trade in my family, but I also don't particularly like running. ;-)

Mortgage is a tough one. Although it's fun to run through the math and argue about renting vs. buying, the reality is almost everyone who's wealthy owns their own home(s). It's pretty much universal. I've only met a handful of people - out of hundreds - with the stamina to invest every extra penny that would typically go to the mortgage and have enough put aside to buy a home outright after 10-15 years. Home ownership is basically forced savings and home equity accounts for the majority (often all) of their net worth for most employed people in the US.

I don't think it's any different in other countries.

 

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[Deleted105117]

+1.

I tell people to forget about investing money until they have enough money to invest. But definitely learn the basics of finance. Learn how to pay bills, save money, and manage debt. Then apply that money toward business ventures that have the potential for asymmetric returns. When that business starts to accumulate cash (I have $100K sitting around!) then its time to get that money invested (assuming it can't grow the current business) so it becomes another income (or growth) generating asset.

I agree with everything too but there is still a BIG QUESTION UNSOLVED: HOW TO START to MAKE MONEY FROM ABSOLUTE ZERO. Let's say you left a well-paid "slow lane" job, because of burnout to not get sick. Then you tried to start a different business on your own and you failed, in the meantime, after 3 years you run out of almost all of your savings. Now you don't have any debt, but you have no income, only 1000 € cash under the mattress. Wish me, good luck pals...

 

[JasonxR]

I agree with everything too but there is still a BIG QUESTION UNSOLVED: HOW TO START to MAKE MONEY FROM ABSOLUTE ZERO. Let's say you left a well-paid "slow lane" job, because of burnout to not get sick. Then you tried to start a different business on your own and you failed, in the meantime, after 3 years you run out of almost all of your savings. Now you don't have any debt, but you have no income, only 1000 € cash under the mattress. Wish me, good luck pals...

Skills make you money pal just learn a skill start freelancing save up some money and go for it everybody hits the rock bottom. I wish you all the luck

 

[The WolfPreneur]

I’m working two jobs now and starting my fast lane business but don’t know how to manage my money. I’m 26 now and know tbh w habits I build up now will impact me for better or worse in the future. What are some books that will give me a good direction on money management?

1)Pay yourself 15% of your income(it's just a starting point, you can increase it as your income grows)
2)Invest another 15%-20% of your income in yourself, not in an asset class but in yourself. You can use it to learn a new skill, etc. Take extreme action on this point because it is capable of increasing your monthly income
3)Spend way less than your earn

It's better to invest in other assets when you are having an extreme monthly cash-flow from your business or skill, till then keep investing a part of your income in yourself .

Books recommended: "THE Richest Man In Babylon", "Psychology of money"

 

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[tinobuntin@yahoo]

How much you spend in a month?

I bet 99% chance you need to cut out BS activities, hanging out with friends wasting money doing dumb shit, and that’s probably it.

Then, your biggest problem is not making nearly enough money!

Never watch Dave Ramsey. He is a dumb boomer.

I agree. Some of Ramsey's principles are good, like save more than you earn or don't go into debt for a car, but some of his other points will lock you into the slow lane for good. My favorite book is The Richest Man in Babylon by George S Clayson. In all honesty though you don't need a book to tell you to save a percentage of your money every paycheck and to stay away from consumer debt like credit cards and car loans.

 

[thelastsurvivor]

+1.

I tell people to forget about investing money until they have enough money to invest. But definitely learn the basics of finance. Learn how to pay bills, save money, and manage debt. Then apply that money toward business ventures that have the potential for asymmetric returns. When that business starts to accumulate cash (I have $100K sitting around!) then its time to get that money invested (assuming it can't grow the current business) so it becomes another income (or growth) generating asset.

I wasn’t talking about investing. I know I need a lot of money for it to even make an impact. I’m talking about basic money managing skillls like putting away 50% of your salary to a savings you don’t touch automatically 10% for food and drug basic things

 

[thelastsurvivor]

+1.

I tell people to forget about investing money until they have enough money to invest. But definitely learn the basics of finance. Learn how to pay bills, save money, and manage debt. Then apply that money toward business ventures that have the potential for asymmetric returns. When that business starts to accumulate cash (I have $100K sitting around!) then its time to get that money invested (assuming it can't grow the current business) so it becomes another income (or growth) generating asset.

That’s what I was asking not investing tips at all I know I don’t have the funds for that

 

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[EvanOkanagan]

Check out my thread on how I started managing my money (used this for a solid 8-10 years I'd say). This works even if you have a regular job regardless of what you're earning:

NOTABLE! - MINDSET - Money Management Habit - How to Save or Blow Money

Hey guys, Just wanted to share a quick money management tip that I've acquired and modified from a couple different books and Authors I like (Secrets of the Millionaire Mind, I will Teach You to Be Rich, & others). It's a bit of a variation of what I've read and I've tweaked it over the years...

www.thefastlaneforum.com

There's some other great posts on this thread as well for more ideas, what I used worked really well for me in the beginning.