My Top 5 books about Personal Finances and Financial Independence

In 2017, a friend of mine sent me a link to an YouTube channel about personal finances, called Me Poupe. That made me change, for the better, the way I think about money, wealth and financial independence.

Since then, my husband and I have been budgeting, spending less and making more conscious financial choices, i.e., living below our means. For investing, we’ve been using WealthBar and we are also planning to try the Canadian Couch Potato method soon.

All of this was only possible because we have been continuously learning from other people’s experience. It’s not so easy to take control of your finances, so it was really important for us to had found some good materials along the way.

Because of that, I decided to write this post and share my top 5 best books that helped us change the way we manage our money. Here we go:

5. Rich dad, Poor dad

This was one of the first finance-related books that I read. It’s not an investments book, it’s rather a way to change the way you might perceive money and wealth. For me, it was super useful because that’s when I started to notice the difference between having a lot of money and building wealth. One of the best part of the book is when the author talks about the ‘Rat Race’: the more you spend, the more you have to work to maintain your lifestyle. It’s a short book but I guarantee you might get some insights from it.

4. One Million in the Bank: How to Make $1,000,000 With Your Own Business, Even If You Have No Money Or Experience

There are a lot of financial independent people these days writing blogs, creating courses, etc. The majority of them recommends investing as much as you can from your salary, right? But only a few of them points out that one of the fastest way to build wealth is to generate passive income from developing a Business. The main learning from this book is that you don’t need to go after creating the biggest company in the world nor you need to have a fancy MBA to have a successful business. Bonus: If you are in the Tech Industry, you might even want to check out the Indie Hackers community for some inspiration.

3. Thinking, fast and slow

This is not a finances book but it’s somewhat famous in the investing world. The author discusses the psychology behind some choices that we do, including Investing, Statistics and Probability. It’s a great book and reading more about how we think and do stuff is always interesting. Another great book is Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets but I haven’t read it yet.

2.The Millionaire Next Door: The Surprising Secrets of America’s Wealthy

I won’t deny that I used to think that rich people were the ones that had a lot of money, maintained a very expensive lifestyle, including travels every month, etc. Well, if you do all of that, that just means that you have less money in your bank account and therefore you need to work a lot more to maintain that (that’s usually the case, unless you inherited a big fortune or something).

But here is where things get interesting. According to the author, self-made Millionaires give a lot of value to their money, live a frugal life and therefore don’t have to worry about their future, because they make better financial choices. So, this idea that millionaires are millionaires because they spend a lot of money is not accurate. to summarize, I really like this quote:

Wealth, in fact, is what you don’t see. It’s the cars not purchased. The diamonds not bought. The renovations postponed, the clothes forgone and the first-class upgrade declined. It’s assets in the bank that haven’t yet been converted into the stuff you see. When most people say they want to be a millionaire, what they really mean is “I want to spend a million dollars,” which is literally the opposite of being a millionaire.

From The Psychology of Money – Collaborative Fund

So this book is my second one because it demystifies some of the common believes about Wealth.

1. Early Retirement Extreme: A Philosophical and Practical Guide to Financial Independence

As the title says, it’s a very Philosophical discussion about Financial Independence. It goes beyond saving everything you can, instead it makes you think of better choices you can make today that can make a huge impact in the next years of your life. Are you sure your spending habits make you happy? Yep, be prepared to face some personal questions along the reading.

It is one of the best books that I’ve read. I would say that you have to read it first to make sure you want to follow a FIRE movement, because it takes a lot of commitment, but you can also check it out the 21-Day makeover for free first. I’m not a strict FIRE adopter, but following some of the ideas that the author presents have made a huge impact in my life.

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And that’s it! I would love to know if you have a suggestion or comments. You can also check it out my reading list here. See you next time!

Peak: Secrets from the New Science of Expertise

I discovered a few months ago this cute app called Libby that allows you to loan e-books and audiobooks using your local library card without having to log in, download the e-book, send to your device… Isn’t that amazing?! <3

When I was reading Deep Work, I added a few books in my to-read Bookshelf and one of them was Peak: Secrets from the New Science of Expertise, from by K. Anders Ericsson and Robert Pool. It is, so far, one of the best books involving psychological research and concepts that I have read (the other one is ‘Thinking, Fast and Slow’, by Daniel Kahneman).

It’s not my intention here to resume the book or to discuss every concept of it (there are so many!!). But to give you an idea, the book discusses how to be an expert in a given field through a deliberate practice, building mental representations, having the support of your significant ones and other variables.

Now I want to share with you my best part of the book. It’s the chapter 8, ‘But What About Natural Talent?’, specifically, the section called ‘The Dark Side of Believing In Inner talent’. It demystifies the belief of someone being gifted or being talented by nature and because of that, they are good at what they do.

When people assume that talent plays a major, even determining, role in how accomplished a person can become, that assumptions points one toward certains decisions and actions. If you assume that people who are not innately gifted are never going to be good at something, then the children who don’t excel at something right away are encouraged to try something else. The clumsy ones are pushed away from sports, the ones who can’t carry a tune right away are told they should try something other than music, and the ones who don’t immediately get comfortable with numbers are told they are not good at math. And, no surprises, the predictions come true [… ]. Te prophecy becomes self-fufilling.

Because we believe in that, we don’t even try. And that can prevent people from building great skills that would benefit us all as a society. That is so damaging! I was one of these children who was discouraged to study Engineering… That’s too bad that it happened, but now I understand that this is a huge social problem and I wasn’t the only one. And I am changing that now. If you identify yourself with that, I hope you are doing that too 🙂

In addition to this discussion, I think that this belief is more prejudicial in the STEM fields. I have heard so many times people saying: ‘there are some people who learn how to code really fast, they must be naturally good at it’ or ‘I don’t have a logical brain, therefore I can’t learn how to code’. Now I try to show them the learning from this book and hope that they will stop repeating that and will at least try to pursue their goals.

There is one more quote that I want to share to finish this post with a positive quote:

In the long run it is the ones who practice more who prevail, not the ones who had some initial advantage in intelligence or some other talent.

If you liked these quotes, then besides reading the entire book, you will also enjoy this free amazing and fantastic resources by Dr. Stephen Chew to apply to your practices. You are very welcome!

Hope that you get interested in reading it and if you do, share here your thoughts of it. Or recommend me another book. Cheers!