Most people would like to have the freedom to do what they want. We prefer to decide for ourselves what we do with our time, what we buy and where we spend our day. In reality, however, this is often only partly possible. In most cases, our work determines how we spend our time, and what we can do with the income we receive from this. So we are dependent on a job or our employer. Almost everyone will indicate that, in order to be able to do what we want, sufficient money is needed. So we think we first need to be financially independent to make this possible.
What is financial independence?
Financial independence is the status of having a reliable source of income that is sufficient to cover the cost of living for the rest of our lives, without being dependent on others. The income earned without having to work is also called passive income. So financial independence allows you to live the life you want.
Achieving financial freedom can mean something different for everyone. Achieving financial freedom, for example, can mean that you can retire early. It can also mean that you can devote your time to meaningful work, without having to pay attention to a career. It may also mean that you don’t have to think as much about making big purchases, such as a car, or you simply book a holiday to that distant destination you’ve always wanted to go to. So we can say that people who are financially independent have more options, and therefore live more freely with possibly less stress.
Achieving financial independence is not easy and can take many years. This is clearly not a strategy to get rich quickly. And people who are financially independent need to handle their capital responsibly to make sure they stay that way. First of all, we will have to become the type of person who is able to become financially independent. This includes discipline and the development of certain knowledge and skills.
In this 6-part series of articles we describe 6 ways that can contribute to achieving financial independence:
- Starting a business
- Become a trader and investor
- Develop the right financial behavior
- Stop consuming and start producing
- Read the right books
- Meet helpful people
Part 5: Read the right books
I have already mentioned that in order to become financially independent, you must first become the type of person who is actually capable of becoming so. Besides knowledge and skills, this also involves focus and having a positive mindset. Reading books about subjects that contribute to achieving financial independence can help you a lot. This sounds logical and it is. Without reading, it is not possible to gather valuable information.
What is the use of reading books?
Reading books has many advantages. Books offer a lot of valuable information and can make you more aware of the choices you have to make to become financially independent.
Some advantages of reading books:
- Reading keeps the brain active
- Reading reduces stress
- Reading offers mental stimulation
- Reading is fun and interesting
- Reading is learning
- Reading is the most inexpensive way to acquire knowledge
For me, the biggest advantage of reading books is the amount of information that can be stored in a book. Imagine that the author of a book on personal finance has spent his entire life studying the subject. And now imagine that all the valuable knowledge that this author has gained can be read back in a book, which you can finish in a few days. This is where the real value of reading lies.
4 good books on self-development and personal finance
I have read many books on various subjects. I personally like books that explain basics, are easy to read and offer a lot of directly applicable information. In the area of personal finance and self-development, the following books are an absolute must read
1.The Alchemist by Paulo Coelho
What is the book about?
The Alchemist follows the journey of a shepherd boy named Santiago. Based on a prediction by a fortune teller, Santiago goes in search of a treasure that is said to be located near the Egyptian pyramids.
The story of The Alchemist makes you think about your dreams and expectations of life, and how you can have a positive influence on them. You learn that you can take control of your own life, and the book is very inspiring.
Biggest takeaway
The main message of The Alchemist is that all individuals should live a life of pursuing their individual dreams.
The Alchemist is without doubt one of the most impressive books I have ever read. More than 65 million copies of the book have been sold worldwide.
The Alchemist is available here (Amazon link).
2. Rich Dad, Poor Dad by Robert Kiyosaki
What is the book about?
Rich Dad, Poor Dad is one of the best books on personal finance. In the book, Robert Kiyosaki tells the story of growing up with two fathers; his real father and the father of his best friend (his rich father). Kiyosaki describes how his two fathers shaped his thoughts on money and investing. The book offers many instantly useful principles for improving your life in the area of money and personal finance.
The book discusses the value of having knowledge in the financial field, why rich people do not work for money, how companies handle money and how to make money work for you. Rich Dad, Poor Dad is a book that is easy to read and is packed with information that can be applied immediately.
Biggest takeaway
The main message of Rich Dad, Poor Dad is the realization that people who don’t handle money well have less money because they work for money, while people who handle money well build more wealth because they have learned to make money work for them.
Rich Dad, Poor Dad is available here (Amazon link).
3. How to Win Friends and Influence People by Dale Carnegie
What is the book about?
How to Win Friends and Influence People is about communication and dealing with other people. Communicating well is the most important skill you can learn since we communicate in everything we do. Carnegie shows that communicating well has nothing to do with talent and that anyone can learn to communicate successfully.
Carnegie teaches that by changing your own behaviour, you can also change the behaviour of other people in a positive way. For example, you learn to show genuine interest in other people, encourage people to talk about themselves, don’t criticise or condemn and discuss less.
Biggest takeaway
The most important message of How to Win Friends and Influence People is the idea that you can change other people’s behaviour, simply by changing your own. As a result, you will understand people better, your relationships will improve, you will convince people more easily and you will also be liked more by other people.
As far as I am concerned, this book is the best book on communication and dealing with other people.
How to Win Friends and Influence People is available here (Amazon link).
4. The Richest Man in Babylon by George Samuel Clason
What is the book about?
The Richest Man in Babylon comprises a number of short lessons in personal finance. In these stories, the basics of personal finance are explained in a clear, easy-to-understand way. The book tells the life story of Arkad, the richest man in ancient Babylon. Arkad passes on his wisdom to Bansir, a young man who also wishes to become rich and wealthy.
All the financial principles that lead to personal wealth and wealth creation can be found in the book. All the valuable lessons of the book are as relevant today as they were in 1926, when The Richest Man in Babylon was first published.
Some wise lessons from the book:
- Spend less than you earn
- Live below your means
- Pay yourself first
- Save at least 10 percent of your income
- Invest wisely
- Let your money work for you
- Secure your future income
- Develop skills to generate more income
Biggest takeaway
The Richest Man in Babylon teaches you that if you follow the basic lessons in the book, work hard and constantly improve your skills, you can build wealth through passive income.
This book should be made compulsory in every school. The Richest Man in Babylon is, in my opinion, the best book on personal finance.
The Richest Man in Babylon is available here (Amazon link)
Conclusion
Reading books on topics that contribute to achieving financial independence is indispensable if you want to get started in a serious way. Reading is the fastest and easiest way to learn relevant knowledge and skills.
The books above are easy to read and the lessons they describe can be applied immediately.
Of course, there are many other good books to consider. Although many of these books were written a long time ago, their message is timeless and more powerful than ever.
I wish you lots of reading pleasure.
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