Good morning and happy Saturday! Weekends are usually when I get a chance to read. Last weekend I tried to read “The Story of Stuff” by Annie Leonard, but I couldn’t get past page 50 or so. It was too bad-I loved the online movie (which is worth a watch) but just couldn’t slog through the book. From the title and the movie, I thought it was going to be an interesting look into minimalism and how all the stuff we buy (especially here in America) is both making us broke and trashing the planet. It started out that way, but then went deep into environmental issues…and not in a way I found interesting. The movie is definitely worth a watch though.
So instead of reviewing that book, I’m going to recommend you watch the video if you haven’t caught it already. Instead, let me recommend four books that changed the way I view spending, saving, debt, and the goal of financial freedom.
Four Books that Changed My Financial Life
I love to read-it’s been a hobby of mine since I was a young child. My favorite books now are non-fiction books intended to help make your life better, or teach you something. You might have been able to guess that from my prior reviews of books like Grit; Raising Financially Confident Kids; Smarter, Better, Faster; Retire Inspired; and Pound Foolish. Today I’m taking a different approach – instead of telling you about a book I just read, I’m going to review the four books that changed the way I look at money and the role it plays in my life.
The Millionaire Next Door
I first read this book in my early 20’s. It came out in 1998, when I was 18, so it was still relatively recent the first time I read it. This book changed how I saw millionaires, and what it really means to be wealthy. Most of the wealthy in this country isn’t the flashy, Bently driving, mansion living people that the media likes to show off. Instead, most of the wealthy are ordinary people. They live in ordinary, inexpensive homes. They don’t buy expensive clothes, shoes, watches, or cars. They keep a budget, save no matter how much or how little they make, and usually are in “dull-normal” careers. Lots of people in fancier careers-like doctors or lawyers (people like White Coat Investor, Physician on Fire, and Big Law Investor excepted of course) spend the money they earn to try to show off. They feel that because they have a big income they need to show it off. While people in less “fancy” careers just go along, slowly saving/investing, and accumulate real wealth.
The Wealthy Barber
I read this book as a teenager in my local library. Yes, you read that right-a teenager (I had odd hobbies as a teen). It was the first financial book I read, and it resonated with me so much I can actually remember reading it. I think I enjoyed it so much because it was essentially a story about how a barber became wealthy-by living below his means, saving and investing, etc. In the book, with every haircut the barber dispenses advice on money, debt, homes, and so on. When I re-read it today I can see that it’s very simplistic and basic-but that’s exactly what I needed as a teenager. Likely the book is now pretty dated, as it was first published in 1989. But reading it in the 90’s it was a great basic overview to finance covered in an interesting way. I only wish they would update it and market it to the teenagers of today. Maybe adding in a chapter on student loans, which weren’t as much of an issue in 1989. I’m working on writing a book that also shares financial basics through story-except for women and for this century. That idea is directly inspired from The Wealthy Barber, because I would love to have the impact on someone else that this book had on me.
Your Money or your Life
This is the book that really showed me how you can achieve financial independence, and gave me a different perspective on what spending money really is. You see, in the book they show (in detail) how by saving/investing you can earn enough money each month to cover your expenses (your crossover point). When you do so, you’ve achieved financial independence. Sounds simple, right? But they also changed the way I think about what my purchasing decisions really represent-my time. When I’m spending money on something, I’m really spending whatever time it took me to earn that money. And the time to earn the money isn’t just the hours you spend at work-it includes the commute, time working from home, time getting ready for work, time thinking about work, and time decompressing from work. When you add it all together, the hours you spend “working” are huge-and your “real hourly wage” is likely lower than you think. This perspective helps me when thinking about whether or not I really need something-is it really worth that much of my time? Is there a way I can save on it, thereby spending less of my time? It’s certainly worth a read (although some parts can be a bit dull at times).
The Tightwad Gazette
I read this in my early 20’s too, at first taking it out of the library, and finally received a copy as a Christmas gift. It was written in the early 90’s and is a compilation of years of newsletters about thrift, frugality, and saving money. The authors family story is inspiring-they had an aggressive goal (have a big family, a stay at home parent, and buy a house on a single military income) – and they achieved it through aggressive thrift and savings. Some of the ideas in the book are seen as too extreme, or not worth the time it takes to execute on them, or outdated. Side note – my husband still refuses to let me re-use aluminum foil. Darn it! But like most media (books, blogs, websites) my motto is to “take the best and leave the rest”. I feel that generally, the ideas in the book are great-sometimes specific tips on saving money, other times ideas on how you can use creativity to create something out of nothing. You can use the information to dial back on spending as much-or as little-as makes sense for you. My copy of this book is worn and tattered from being read so many times.
What Changed Your Financial Life?
Is there a specific book that changed the way you viewed finances, or the role of money in your life? What about something that changed your perspective on what it means to be wealthy? Let me know in the comments.
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