Month: September 2017

Read Your Way Into Wealth: Six Great Books

“Look, I feel like I was chose to the take care of the ones I’m close to.
Kitchen looking like whole foods, got the fam around like it’s soul food.”  – Big Sean

wealth-reading

Reading is Key to Building Wealth

How many books have you read so far in 2017? How many of those books made you better at your job or improved your thought process around wealth? Meditate on that number.

Warren Buffett reads 500 pages a day. Mark Cuban reads more than three hours a day. Bill Gates reads a book per week. The fact of the matter is, most financially free folks are voracious readers because they understand that knowledge is the gateway to success. Learn, earn, return.

Maybe your career doesn’t require scouring through 500 pages of financial news on a daily basis, but that doesn’t cut you off the hook. Read often and read to educate, not to entertain. A study of 1,200 rich people confirmed that all of them are readers.

If you want to become financially independent, you must think it before you become it. You probably do, most people want to become wealthy. Reading books about personal finance provide a practical way to improve your financial behavior. Take a slot out of your day to invest in your financial education. You’ll thank yourself later. Here’s a list of my favorites.

Wealth-Building Books

The Millionaire Next Door

Tom Stanley and William Danko went out to research how the rich lived their lives and their findings were surprising. They discovered that many folks who lived the “lavish life” actually didn’t have the bank account to back it up. Most millionaires actually live quite modest lives. Surprisingly few of the population living lives in luxury are high-net-worth individuals.

Key takeaways

  • Live below your means
  • Budgeting leads to financial freedom
  • Spend your time and money wisely
  • Financial independence is far more important than portraying high school status
  • Most rich folks don’t ride luxury vehicles
  • Spend less and invest more
  • Millionaires only pay around 2% of their net worth in income taxes each year, while the average American household spends 10%

Rich Dad Poor Dad

Robert Kiyosaki tells a tale about his rich dad and his poor dad. His poor dad (and biological father) was a well-educated fellow who never made much of himself financially. His rich dad (his good friend’s father) was a businessman without a state-of-the-art education that managed to make a fortune.

Key takeaways

  • Those who don’t risk, are not rewarded – don’t work for money, let the money work for you
  • Don’t seek money and security; seek opportunity
  • Financial intelligence is key
  • Understand the difference between an asset and liability – an asset makes you money and a liability takes money away from you
  • Keep your assets high and your liabilities low
  • Real estate investing is a great way to make money and save on taxes
  • Business ownership and investment ownership are the two best routes to wealth
  • Invest in your education – learn cash flow, people, and systems
  • Pay yourself first

 

“This some s*** I wrote about when I was broke
See, the power of the mind is not a joke
Man, I said that I would do it and I did
Used to get left-overs out the fridge
Nobody was famous where I lived
Till I got it jumping at the crib
Took a lot to be able to give, I mean” – Drake

 

Think and Grow Rich

Think and Grow Rich by Napoleon Hill is one of the most influential personal success books of all time. The book is based on the research of over 500 business leaders such as Henry Ford, Alexander Graham Bell, John D. Rockefeller, Thomas Edison, and more. The book has sold over 70 million copies since being published in 1937.

Key takeaways

  • Desire is at the core of all achievement
  • Visualizing your success makes the end goal more attainable
  • Use “auto-suggestion” to mold your subconscious mind for achievement
  • Building specialized knowledge is the key to making progress – it doesn’t pay to be the “master of none”
  • Build a mastermind team – your friends should be people who can bring you closer to your goals
  • Make decisions quickly and change your mind slowly
  • Persistence is paramount in achieving goals

 

The Millionaire Mind

“The Millionaire Mind” by Thomas Stanley is a follow-up to “The Millionaire Next Door” and goes into detail about how millionaires think much different than the average earner. The book follows the theme of “Think and Grow Rich”, where the content emphasizes the power of the mind and how negative thinking can affect your wealth over time. The book motivates us to cut loose our destructive thoughts to unlock our own wealth potential.

Key takeaways

  • Millionaires set their own agendas and goals, and don’t wait for others to tell them what to do
  • If you start something, finish it – that’s what millionaires do
  • Focus effort is getting along with people; your pocketbook will thank you later
    • 94% of millionaires ranked getting along with people as one of the most important contributors to becoming rich
  • If you want to become a success, discipline is vital
  • Millionaires are future focused and use their time wisely

 

The Richest Man in Babylon

“The Richest Man” in Babylon by George S. Clason is one of the most significant pieces of literature about building wealth. The classic, published in 1926,  is a short read that’s packed with key wealth-building concepts. The story speaks about the legend of the richest man in Babylon named Arkad. The book reveals his secrets to building riches. This piece of literature served as the roadmap for other books on this list.

Key takeaways

  • Advice is free – use it to build wealth
  • Save at least 1/10th of what you earn – pay yourself first
  • Don’t ask about personal finance from your carpenter – seek advice from those with the right knowledge
  • Surround yourself with people who are familiar with money, make money, and care about money
  • Repay your debts
  • Constantly increase your ability to earn – always invest in improving your skills

 

I Will Teach You to Be Rich

The author of this book, Ramit Sethi, really isn’t much older than many our readers. He finds a way to write a very dense and robust personal finance book without coming off like the rest of the older crowd writing books. I really like Sethi’s book because it’s sort of like a toolkit for millennials. He gives super practical and action-oriented advice. And he shots it to you straight. If you want an all in one book, this is a great place to start.

Key Takeaways

  • Spend consciously on the things that you actually care about
  • Automate as much of your spending, investing, and saving as possible
  • Get bank accounts with no minimums and no fees
  • Pay credit card debt each month in full
  • Invest in low-cost index funds and ETFs

Start Somewhere

Just pick one book to start with and spread your wings from there. If you’ve already read a couple of these books, hopefully, this post introduced you to at least one new book. Before doing better, you must know better. Learn, earn, return!

Bitcoin – Frequently Asked Questions

The Year of Bitcoin

This year, America went crazy on cryptocurrency. Bitcoin’s price rose above the roof and the world took notice. People who’d never thought about investing in currencies started googling “how to trade bitcoin”. Bitcoin and other cryptocurrencies are making room for a completely different vision of how the economy operates. It’s new. It’s cheaper. And it’s not controlled by banks. But what should you know before you get your feet wet with bitcoin? There are plenty of guides out there. This post serves as an avenue to provide readers with the absolute “need to know” to get involved in the ecosystem. We’ll attack some frequently asked questions and leave room for further reading for folks that want a bit of a deeper dive.

Bitcoin – Frequently Asked Questions

What is bitcoin?

Bitcoin is a digital currency that was created in 2009 by an unknown using the alias of Satoshi Nakamoto. The currency, also considered a cryptocurrency, is produced by people all over the world that use high-powered computers to solve complex mathematical equations to “mine” bitcoin.

How owing bitcoin different than owning regular USD?

There’s no Fed controlling the flow of money during financial crises. At one point in time, USD was backed by gold (of course now it’s backed by “confidence”). Well, in the case of bitcoin, instead of being backed by gold, the currency is based on mathematics. Bitcoins are produced by following a mathematical formula that’s accessible online.

Besides what it’s backed by, bitcoin has five defining characteristics:

It’s decentralized

There’s no central authority. No one can mess with monetary policy, cause a meltdown, or take people’s bitcoin away.

It’s anonymous (for the most part)

All that’s logged on the blockchain for bitcoin transactions is your bitcoin address. Your bitcoin isn’t linked to your name, address, or any other personal information. However, there are still some ways to figure out who the owner of bitcoin is if need be.

It’s transparent

Bitcoin uses the blockchain, which stores each transaction on a huge general ledger.

It’s transaction fees are lower

On international transfers, you may be charged an arm and a leg. Bitcoin charges a dramatically lower fee.

Once your bitcoin is sent, there’s no getting them back

This is one of the risks with bitcoin. If you end up in a fraudulent transaction or have your money stolen by a hacker, there’s really nothing that the network can do. That’s when a bank or a central authority would actually come in handy.

 

What can bitcoin be used for?

Bitcoin can be used for just about anything a US dollar is used for. In 2017, the world became crazed over bitcoin trading because of its massive rise in value. Some early adopters have become millionaires from buying and selling bitcoin. But bitcoin can also be used for everyday purchases. Each day, more merchants accept bitcoin as a payment and adoption will continue to evolve. Whether you want to buy a meal, a plane ticket, or shoes, you can buy it with bitcoin.

How do I get started using bitcoin?

To get started with bitcoin you need a bitcoin wallet. Top players in the U.S. for bitcoin wallets are Blockchain and Coinbase. There are mobile wallets, desktop wallets, online wallets, hardware wallets, and USB wallets to choose from. If you’re a beginner, you’re better on with going with one of the bigger players who already have a strong reputation and community. From there, you need to go to an exchange and use your wallet to exchange your current currency for bitcoin. In the case of Coinbase, the company provides both the wallet and exchange. In the case of Blockchain, the company specializes in digital wallets and works with a vetted list of exchanges.

What are the cons of owning bitcoin?

Bitcoin has garnered a lot of interest in its early years of conception, but the currency does not come without its cons. Because bitcoin is a new form of currency, mass adoption hasn’t happened, yet. Not every merchant accepts it and not all your friends own a bitcoin wallet. Bitcoin needs to continue to build the size of its community to receive the benefits of network effects. Imagine having Facebook during its first year. The utility of the network is limited. Now its utility is extreme. For a currency to be useful, the people have to buy in.

When you think about American USD, you know that there’s a certain amount of credibility that it holds. Regardless of what you hear in the news about the debt ceiling, the GDP, Donald Trump, or global conflicts, you know that when you go to the gas station, you can hand the cashier your dollars and change with full confidence. Although we deal still with inflation, the USD is pretty stable. Compared to bitcoin, the USD is still much more stable. At the beginning of 2017, one bitcoin was priced around $1,000. Now, it’s valued over $4,000. You would never see that type of rise in value in the USD. But just as bitcoin rises, it can also fall. This chart tells it all. 2014 and 2015 were dark years for BTC. And dark times can come again.

What’s the blockchain?

It’s the glue that keeps the bitcoin universe together. Each bitcoin transaction is confirmed and creates a “block” on the blockchain ledger. It’s transparent and run by a community of developers who solve mathematical problems to confirm transactions. One key feature is that blockchain can be used for more than bitcoin transactions. It has the capability of logging the transfer of all kinds of value. Ethereum created a platform on top of the blockchain for “smart contracts”. Applications of blockchain technology are much larger than bitcoin. The blockchain is predicted to change a multitude of industries including finance, healthcare, music, and identity.

How is bitcoin stored?

Each bitcoin transaction needs two things: a bitcoin address and a private key. The private key is meant to be kept secret. But don’t lose your key. If you lose it, your bitcoin will remain dormant forever. Decentralization has its cons. You can’t call the bank to redeem your account.

Where can I learn more?

Here’s a list of resources that I found helpful when learning about bitcoin and blockchain:

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