Book review: I will teach you to be rich by Ramit Sethi

I will teach you to be rich – Ramit Sethi

Synopsis:
As the title implies, this book is focused on teaching you to be rich. The book is focused on young people (in their 20s). A six week program is explained in detail on how to look at every aspect of your situation and improve it. From optimising your credit cards and bank accounts, to tracking your spending and simple investments. The book also looks at how you can negotiate to get a raise or even get a better deal on a house or car. The book uses plain English without any complicated formulas or number crunching.

What I gained from reading this book:
A more accurate title for this book would be ‘I will teach you to be in control with your money’ and if you follow the steps, you will be in control. This book can make you rich if you do follow the instructions. You won’t get rich tomorrow, or even in a years’ time, but eventually you will. Studies show that people who have a strong control over their income and spending become richer as time goes on. The great thing about this book is it is easy to implement.
This book was straight forward and very easy to read. My biggest gain from reading this book was seeing a fresh perspective on personal finance that I actually enjoyed. I had already implemented the steps that the author suggests, so although I didn’t learn anything new (I’ve read so many books on this subject), I did get much needed reinforcement that I am doing the right thing and one day it will pay off.

Positives:
This book is extremely easy to read and is enjoyable. Young people will relate to the author and his writing style. The advice given is practical and it works.

Negatives:
I thought that maybe it could go into more detail, but then readers would get bored and not implement the plan. So the fact that the book is short and basic is a good thing. The most important thing here is that the reader takes action, and I think the book will do a great job encouraging it.

Recommended for: All young people
Every young person (from teenage years onwards) should read this book. Even if you hate the word finance and don’t want to think about it, you should check it out. In forty years time you will be so glad you did.

Genre: Personal finance

Overall rating: 8 out of 10 stars

Australians can buy the book by clicking the picture below:

Where to from here:
If you want to go into more detail on the topics covered, I have reviewed many other books on personal finance that go into great depth. Click on ‘List of book reviews’ at the top of the page to see the ones I have reviewed.

If you have read this book, feel free to give it your own rating by posting a comment below.

Four books you must read before starting your own business

If you are thinking about starting your own business, the hardest part is probably the very start. There is a wealth of information out there on a wide range of topics that business owners must know. Rather than guessing where to start, I have made this list of books that will give you a basic starting point with essential principles and concepts. After you read these books, you will know what needs to be done next.

1. The E-Myth Revisited

This book is an essential starting point for anybody considering starting their own business. The author explains to Susie, somebody who has already started their business, why her results have not been what she expected. A wide range of topics are explained very well from lessons in franchising all the way to the mindset a business owner must have.
By the end of this book, you will have a much clearer idea of what you need to do, and more importantly, how you must think.



2. MBA in a day

For those who don’t want to spend 3+ years studying business at university, this book is a way to gain a basic understanding of the principles and concepts that would have been taught. By no way am I saying that this book compares with three years of study, but it does give a good summary of the topics. Everything from accounting and finance to marketing and strategy is discussed.
After reading this book you will have a very basic understanding of all the topics you will need to understand to successfully run a business. From there you can find more books or even short courses on the specific subjects you want to learn. It is important to be aware of what you need to learn and why you should learn it. This book does a good job in increasing your awareness in business subjects.



3. How to win friends and influence people

No matter what type of business you plan to start, you will be involved with people. Even if you are starting an internet only business, your customer service and networking skills will determine your success or failure. This book teaches essential people skills that everybody in business must recognize and apply. Ever walked out of a store disgusted by the lack of customer service and decided never to go back? Well if you don’t have first class people skills, there is the chance that people will react that way to your business.
This book will teach you everything from improving customer (or supplier) relationships to handling conflicts and arguments. Applying the principles in this book is an easy and effective way to improve your business’ reputation.


4. Getting to YES (Negotiating agreement without giving in)

Like this book states “like it or not, you are a negotiator”. Regardless of your business, eventually you will need to negotiate with somebody. How you handle that negotiation (and all future negotiations) will have a huge impact of your business’ performance. Whether you are hiring somebody and negotiating their pay and benefits, or negotiating with your suppliers, having an understanding of negotiating and how to effectively do it is essential. This book is most effective to protect you from people who will try to take advantage of you or use dirty tactics. The small cost of this book outweighs the raw deals and manipulation you could have encountered had you not read it.
This book will introduce you to what negotiating is and what it is not. Most people don’t really understand negotiating to begin with so reading this book will already put you at an advantage. With starting businesses, the more advantages you can get, the more likely you will be successful. Even if you think you are a good negotiator, you can always improve. Grasp hold of any advantage you can get your hands on. A solid understanding of negotiating is a clear advantage.



I have chosen these books because they are topics that many people would neglect or completely overlook. The main lesson is that the right frame of mind is essential for success. Topics such as accounting or marketing are easy to learn, so after you read these books you can continue to study them as you like. On the other hand, developing the mindset capable of running a successful company is so important, yet many people don’t even consider learning how to do it.

Book review: The richest man in Babylon by George Clason

The richest man in Babylon – George S. Clason

Synopsis:
This book is a collection of Babylonian parables that the author wrote in the 1920s. These parables were made into pamphlets that banks handed out to customers. The stories are used to explain the basic principles of finance such as compound interest, investments, saving and controlling expenditure.
The parables are based on ancient Babylon, a wealthy and educated city from over 5,000 years ago. The stories are written in the old ‘King James’ language (eg: thy, thou, morrow). Tales of how one person became a slave and managed to buy his freedom through hard work instead of shirking, how one person who ran away from his massive debts managed to repay them over time by planning, etc.

What I gained from reading this book:
This book was very interesting to read because I haven’t read anything else like it. The old language used was very unusual but served well in painting a picture of an ancient time in Babylon. The stories are well written and quite clearly show what it could have been like living back then. The principles that the parables are based on are very fundamental principles of personal finance, so I already knew them. It was refreshing to read them used in a story.

Although the principles are very basic and can be learned in any personal finance book, so many people don’t even know them or don’t bother to apply them. I have many friends who don’t even know about these principles or they come up with excuses why they don’t apply them. Reading these tales rejects any excuses by effectively saying “people managed to apply these principles 5,000 years ago so you have no excuse not to”.

I did have trouble with the old language used and some parts I got lost and couldn’t understand what was being said. From what I understand, another version has been published using current language that people will be able to understand. Even know I had difficulty with the old language, I prefer it. The old language is effective in the storytelling and I think the other version would not be as enjoyable.

Positives:
Explains sound principles that have stood the test of time and that everybody should use. Interesting storytelling of an ancient time and the old language adds to the authenticity.

Negatives:
Some people may have trouble understanding the old language. The book is quite short, but in a way that’s good because it gets right to the point. People who already understand the basics of personal finance won’t learn anything new.

Recommended for: Everybody
I recommend this book for people who want to get a basic idea on how to manage their money but don’t like the idea of reading a finance book. The storytelling is an effective way to understand the principles without being bored unlike so many educational books.
Genre: Personal finance/Wealth

Overall rating: 8 out of 10 stars

Australians can buy the book by clicking the picture below:

Where to from here:
After reading this book you will probably want to learn more about personal finance and how to apply the principles. There are many books that explain how to effectively manage your money.

I recommend the following to gain more insight into building your wealth or improving your financial situation:
The millionaire next door by Thomas Stanley and William Danko
Rich Dad Poor Dad by Robert Kiyosaki

Book review: Rich Dad's Retire Young Retire Rich by Robert Kiyosaki

Rich Dad’s Retire Young Retire Rich – Robert Kiyosaki

Synopsis:
Robert Kiyosaki is the author of the book Rich Dad Poor Dad (I have also reviewed his book Cashflow Quadrant). This is the fifth book he has released under the ‘rich dad’ brand. The basis of this book is explaining how he was able to start with nothing and retire nine years later financially free. The focus is on the different forms of leverage and how you can use them for your benefit. The main message is to expand your ‘context’ or your reality. The last section in the book discusses specific investments such as real estate, paper assets (shares, options) and businesses.
Like the other Rich Dad books, the author contrasts the things his ‘rich dad’ and his ‘poor dad’ have said to him in the past. The focus is on helping you understand that what you believe and say will ultimately determine what type of person you end up as (as in poor, middle class or rich). As the author would say ‘the words became flesh’.

What I gained from reading this book:
I gained so much from the Rich Dad Poor Dad book. Read through that review to see how important I feel it is. This is the third book of his that I have read. He has made some really good points in this book and other points I didn’t agree with. But I did gain from this book. The idea of expanding your context and opening your mind is a powerful one. While I was reading certain chapters I wasn’t too interested in what was being said but after I finished the book I began to notice the truth in the points he made. The examples he made of people not willing to open their mind to possibilities would fit some of my friends perfectly.
I already knew the points he made on shares and options (I studied them at university) so I didn’t learn anything new there but the explanations are well done. This book really does a good job at improving your ‘context’ as the author would say. In other words, it opens your mind to the possibilities of doing things that you would normally never consider.
Although I am not rich yet, I do feel that these books are helping me and improving my future prospects. This book doesn’t look at investment specifics because there are plenty of books on the topic. This book looks at helping you accept that it is possible to get rich (which many people including my friends don’t accept as a possibility).

Positives:
Introduces people to some basic concepts in shares, real estate and options. The conversational style of writing is easy to understand. The book can really help open your mind to possibilities that many people would never accept. The explanations on the different forms of leverage are very useful in real life.

Negatives:
Some people may not like the use of fairy tales to make points. Others may not like the repetition the author uses. Basically, if you did not like his other books, you won’t like this one. If you haven’t read his other books, I recommend Rich Dad Poor Dad over any others.

Recommended for: Those wanting to be rich or successful
I recommend this book for people who seriously want to be rich or successful one day. I say ‘seriously’ because I know many people who say they want to get rich but won’t do anything about it. If you don’t want to put effort in, this book won’t be useful to you. If on the other hand you really aim to put the effort in to try to get rich, this book (as well as his others) can really put things in perspective.

Genre: Investments and personal finance

Overall rating: 7 out of 10 stars

Australians can buy the book by clicking the picture below:



Where to from here:
If you are interested in reading other books by Robert Kiyosaki, I have reviewed other ones here:
Rich Dad Poor Dad
Cashflow Quadrant
Why we want you to be rich by Robert Kiyosaki and Donald Trump

On the other hand, you may want to consider reading books looking at ways millionaires become rich:
The millionaire next door by Thomas Stanley and William Danko
Ten roads to riches by Ken Fisher

Book review: The Millionaire Next Door by Thomas Stanley and William Danko

The Millionaire Next Door: The surprising secrets of America’s wealthy – Thomas Stanley and William Danko

Synopsis:
This book is basically an analysis of the millionaires and their habits. The book looks at a wide range of aspects such as how much they spend on cars, watches and suits, whether they give cash gifts to their children or not, what type of jobs they hold, and how they became rich in the first place. The authors have surveyed countless millionaires and found patterns among them. They compare high income individuals with low net worth (non-millionaires) to millionaires with low income to see how somebody can become a millionaire despite having lower income than others.
The authors try to get a feel for the mindset that millionaires have and try to give a clear picture on how anybody could do the same. The authors even provide a simple formula for the reader to look at their own situation and see whether they are above or below the average in terms of net worth.

What I gained from reading this book:
This book goes into incredible detail on millionaire habits. The book is full of statistics and analysis of a wide range of topics. I found the results very interesting. So much is revealed that many people would never consider being possible. Before reading this book I had a picture of how the typical millionaire lives, but after finishing the book I realised how wrong I was. The detail in the book allowed me to compare my own situation with the case studies to see how I perform.
The major gain I received from this book was the confidence that if I follow the principles in the book, I have a better chance of being financially independent in the future. Not only that, I know what things I should avoid doing that will reduce my chances of becoming financially free. My hyper-spending friends could learn a lot from this book but I know that they would never bother reading it.

Positives:
Very detailed and insightful analysis on millionaires and their attitudes. Great comparison between millionaires and non-millionaires. Provides very informative case studies that are seen in real life all the time.

Negatives:
The analysis is very detailed which some people may not like. At times I even had trouble staying focused because of all the statistics.

Recommended for: Everybody
I recommend this book for everybody because everybody can learn how to make better use of their money. Those who wish to be financially independent in the future should have a read to see what it takes to get there. On the other hand, those not concerned with becoming millionaires should still read the book. Those not concerned with how they spend their money have higher risks as explained in the book.

Genre: Wealth

Overall rating: 7 out of 10 stars

Australians can buy the book by clicking the picture below:



Where to from here:
If you are interested in reading more on how people become rich, have a read on:
Ten roads to riches by Ken Fisher

Book review: Five key lessons from top money managers by Scott Kays

Five key lessons from top money managers – Scott Kays

Synopsis:
This book is based from the information received in interviews between the author and five well known money managers: Bill Nygren, Andy Stephens, Christopher Davis, Bill Fries, and John Calamos. Discussing investment principles and valuation methods, the author has come up with five key points that each of the five money manager follows. The concepts such as intrinsic value and developing a valuation model are discussed in detail.
Basic finance principles such as the time value of money, dividend discount model and Internal Rate of Return (IRR) are also discussed with examples. Examples are used to explain how to use these tools in real life such as analysis of a situation when Home Depot’s stock provided a significant opportunity to profit. The process of screening stocks to match certain criteria is explained in great detail.

What I gained from reading this book:
This book was fantastic to read as it gave very clear analysis of the methods used by money managers and how to put together your own investment system. The principles are very clearly explained (better than many of my finance lecturers did) and very useful. The concept of valuation is extremely important but many people neglect to learn about it (think of all the investors at the peak of the dot-com bubble).

The chapters are very clear and well explained. I gained a lot from the step by step explanations and examples. This book taught me how to compute IRR better than my second year finance lecturer did. This book not only gave me valuable information that I can use with my own investments, but it also made my finance studies a lot easier. Although I don’t plan on investing in a way that is explained in this book, knowing the principles and how to correctly apply them is extremely valuable. I think anybody who is interested in investing can gain from this book as I have.

Positives:
Very clear examples and explanations. The information provided can be very useful in deciding whether other investments are worthwhile or not.
Detailed explanation on creating your own investment strategy and what should be included. Explains how by using a simplified strategy. Very easy to learn thanks to the author’s clarity.

Negatives:
Although the concept of valuation is simple, it is quite hard to come up with reliable valuations for companies in real life. This isn’t a negative for the book because the author explains the problem. I am just making this clear for those who may think it is easy to apply what it taught. I don’t really have any negatives for this book. Well, I wish it was longer. But there are plenty of other books to add to this information.

Recommended for: People interested in investments
I recommend this book for people who are serious about investing on their own. I gained more from this book than quite a few finance units I took at university. The small price tag of this book compared to the high cost of university fees makes this book priceless. The concepts were explained better in the book compared to my university lecturers.
By understanding what is needed to create your own investment strategy, you are more likely to succeed. In other words, if you don’t know what this book is teaching, you are at a disadvantage.

Genre: Investments

Overall rating: 8 out of 10 stars

Australians can buy the book by clicking the picture below:

Book review: Rich Dad Poor Dad by Robert Kiyosaki

Rich Dad Poor Dad – Robert Kiyosaki

Synopsis:
The basis of this book is comparing the advice poor and middle class parents give their children to the advice rich parents give their children. The advice from the poor and middle class parents is along the lines of ‘go to school, get good grades and get a secure job’. The author suggests another path and shows why the conventional advice of getting a ‘secure job’ may not be good advice anymore.
The author uses his childhood experiences and compares advice he received from his real dad (his ‘poor dad’) and his friend’s dad (his ‘rich dad’).

What I gained from reading this book:
I am a Bachelor of Commerce graduate with majors in Finance, Economics and Commercial Law. Before I read this book I had already graduated and studied finance for quite some time. Throughout my finance studies my instincts always bothered me. Almost every finance lecture, I understood what the person was saying, but I knew that something was amiss with their advice. As soon as I started reading this book everything clicked. The author was discussing many of the same issues that bothered me. The number one point that bothered me like nothing else was that almost 100% of the financial planning students I talked to had never invested anything during their studies. The author of the book makes a similar point that ‘Wall street is the only place where people drive up in Rolls-Royces to get advice from people who take the subway’. It concerns me that many financial planning graduates who will eventually become financial planners and advise other people have never invested on their own.

This book was an eye-opener for me and it will be for many people. Even with my financial studies behind me, I have gained some valuable investing advice that my lecturers never discussed. I have kept in mind the concepts this book discusses and I believe it has positively impacted my investment returns more so than the advice from my third year ‘advanced investment’ units. Because of this book I was able to understand why much of the advice given by my finance lecturers is obsolete.

Positives:
Can open your mind to a different way of making a living other than the conventional 9-5 job. If you apply the way of thinking to your life you may find improvements in your finances.
It gives good explanations of simple situations and how they relate to income statements and balance sheets. This is great for people who know nothing about accounting. Teaches the basic principles of cash flow and why you should understand it.

Negatives:
I have read some negative reviews for this book* saying the advice it offers is dangerous. If you have no financial education and follow exactly what this book says, then yes it is dangerous (just like any financial advice). The author mentions many times that you must improve your financial education and I recommend the same. You shouldn’t buy a stock on a ‘hot tip’ without proper education or research, so don’t follow this advice without doing some extra research into personal finance.
Some people may not like this book because it doesn’t show ‘step-by-step’ instructions how to get rich. If you read this book looking for a formula to follow to get rich, you will be disappointed. Instead, read it with an open mind and consider the principles when you make financial decisions in the future.
There are some things written in this book that many people will not like to hear. For example: the author explains why a person’s house is not an asset. Try not to take offense with anything like this and understand why he says it.
These points aren’t really negatives because I don’t really have any negative things to say about this book. These points are warnings for people who could potentially be disappointed by certain aspects of the book. If you understand that this book is not a ‘formula to get rich’ and you keep an open mind to the concepts explained, you should find great value.

Recommended for: Everybody
I recommend this book for everybody because the concepts are so valuable once you properly understand them. Have a read of this book and continue improving your financial education by reading other books. Too many people neglect their personal finances and wonder why they struggle. By reading this book it can open your eyes to why people get stuck in financial problems and how to avoid them.
I found so much value in this book that I made sure every member of my family read it.

Genre: Personal finance

Overall rating: 8 out of 10 stars

Australians can buy the book by clicking the picture below

* There is a very popular negative review by John T. Reed that criticises every point the author makes and tries to explain why the book is terrible advice. It made me wonder why somebody would put so much effort into demolishing the book and its advice. Eventually I realised that the person did this to sell his own books (he has over 30) which he has links to on the same page. I wouldn’t take anything that person says seriously when you consider his main motive: ‘criticise the competition to sell my own books’.

Where to from here:
If you are interested in reading other books by Robert Kiyosaki, I have reviewed other ones here:
Cashflow Quadrant
Retire Young Retire Rich
Why we want you to be rich by Robert Kiyosaki and Donald Trump

On the other hand, you may want to consider reading books looking at ways millionaires become rich:
The millionaire next door by Thomas Stanley and William Danko
Ten roads to riches by Ken Fisher