• surajit bhowmick

How I learn Personal Finance

Happy new year to all!!

Finally, 2020 over, and its new year means a new beginning. The one thing 2020 taught me is the managing saving and investment in a proper way is much in everyone's life.

How I learn Personal Finance
Personal Finance

My father has lost his job due to COVID-19 for almost one year. And saving and investment of us are not enough to fulfill all our needs for one year. We have to borrow money from others to satisfy our needs.

And at the same time, I am also feeling shame as 21 years old I am not able to help my family.

But One and the most important thing I learn from this situation is that saving is not enough to satisfy a need even sometimes investments are also not enough.

So, I decided to educate myself on personal finance. After researching for a few days, I brought dozens of books on personal finances. I don't even know it's right or wrong to buy dozens of books at that time. But Now I think it was the right decision.

The first finance book I have ever read is "Rich Dad Poor Dad" by Robert T. Kiyosaki.

How I learn Personal Finance
Rich Dad Poor Dad

In this book, Kiyosaki talks about the money lesson that he learns from his two dads. His real father "who was his poor dad and his best friend's father who has his rich dad".

His poor dad despite being hard-working and highly educated never really got ahead financially and his rich dad on the other didn't even finish high school but his rich dad understood the rules of money and became one of the richest businessmen in Hawaii.

So, here are some key takeaways from the book.

Kiyosaki says that to become wealthy you need to understand the difference between an asset and a liability.

I think this is by far the most important lesson from the book because the wealthy buy assets whereas the poor and middle class buy liabilities an asset is anything that puts money in your pocket such as stocks, bonds and liability is anything that takes money out of your pocket such as cars, designer bags things

Like that liabilities cost money to buy and they cost money to maintain so they prevent building wealth because the cash flow direction is out of your pocket versus into your pocket, on the other hand, every dollar you invest into an asset becomes a kind of like an employee that's working for you 24/7 to create more income even when you're on vacation this is the whole idea behind passive income.

"The goal is to get your income as high above your expenses"

In the book, he also differentiates between your job and your assets. So, your job is not an asset because, if you stop working the money stops coming.

The book also talks about the importance of understanding the tax code to minimize your taxes.

Unfortunately, the school system isn't designed to teach you this stuff so it's up to you up to us to obtain the financial education on your own.

To open your eyes to a whole new world of possibilities please do yourself a favor and read Rich Dad and Poor Dad it's the best-selling personal finance book of all time.

You can Buy the Book from Here:

If you are looking for a more practical step-by-step guide then this next book is for you.

My next book is another one by "Robert Kiyosaki Cashflow Quadrant" and its part two of Rich Dad Poor Dad

How I learn Personal Finance
Cash Flow Quadrant

In the book Kiyosaki tells the story of how he and his wife Kim used to be homeless and then he tells the story of how they got out of it and became financially free in just a few short years.

It's an incredible story and very inspiring and he lays out the seven steps to financial freedom which are the exact steps he and his wife took to get out of being homeless to retire young and retire rich he talks about the cash flow quadrant which has four quadrants E, S, B, and I

E stands for employee and E’s main source of cash flow is their pay check.

B stands for the businessperson and these get the bulk of their cash flow from the business that they own.

S stands for self-employed and S gets most of their cash flow from working in their businesses

S’s are lawyers’ doctors that have their practice freelancers’ consultants and anyone who works for themselves so they don't have the freedom of a B because they are their business if they stop working the money stops coming.

I stand for investor and I's get most of their cash flow from investment income such as dividends interest and rent.

Most of us are conditional to become E's nobody learns in school how to become an entrepreneur how to invest their money things like that.

However, Kiyosaki says that true financial freedom lies in the B and I quadrants the B's and I's take a lot of risks but they also have passive income that enables them to work only if they want to.

B's and I’s tend to value freedom whereas E's tend to value job security he also talks about how B’s and I’s pay least in taxes because there's a lot of loopholes available to B's and I's whereas E's and S's have a lot less to work with this book is all about being intentional about which quadrant you end up

So, do yourself a favor and pick up a copy of the cash flow quadrant now

You can Buy the Book from Here:

The next personal financial book that changed my life is the "4-Hour workweek by Timothy Ferriss"

How I learn Personal Finance
4-Hour Work

The title and the cover of the book caught my eye.

So, reading the 4-hour workweek inspired me to just think out of the box from the traditional nine-to-five you know get a nine-to-five job after school kind of life and it encouraged me to dig deeper and look for other ways

The biggest takeaway from the book is the idea of time and location freedom when you have total control over when you work and where you work, your part of what Timothy Ferriss calls the new rich.

The newly rich don't necessarily have a ton of money although sometimes they do, they have automated streams of passive income that allows them to work from anywhere and to work only as much as they want.

To so in the book he gives you a blueprint for creating passive income streams that enable you to live the new lifestyle and he even has some tips on how regular office employees can also live the new rich lifestyle by becoming hyper-efficient with their time and priorities and by getting their bosses to let them work remotely.

He also talks about how to take mini-retirements which is the antithesis of the traditional idea of retirement where you work for 50 years and then you retire when you're old.

All and all it's a cool book that challenges you to rethink everything you believe about productivity time and money.

I recommend this book for anyone who wants to design their life intentionally and make time to do the things you want to do now not decades later when you're old and retired

You can Buy the Book from Here:

The next Personal Finance books of all time is "I will teach you to be Rich by Ramit Sethi".

How I learn Personal Finance
I will teach you to be Rich

He gets pretty unconventional advice like don't keep a budget for all the lattes you want and to use credit cards to your advantage and his book is basically the ultimate guide to financial adulting in a way that we would want to follow.

Not to mention he has a kind of weird sense humour that totally cracks me up he gives specific recommendations on where to open your bank account what credit cards to use how to use your credit cards how to get out of debt as well as to bucket your money between fixed costs saving investing and guilt-free spending.

Whether you're just out of college or you've been working for a while do yourself a favor and get this it will 100% help you organize your financial life.

You can Buy the Book from Here:

The fifth on my list of best personal finance book of all time is "Think and Grow Rich by Napoleon Hill".

How I learn Personal Finance
Think and Grow Rich

This book is the granddaddy of personal finance books because it's the ultimate on money mindsets and wealth consciousness over 20 years Napoleon Hill Interviewed a bunch of people who had built huge fortunes from scratch people like Andrew Carnegie and John D Rockefeller and he found commonalities among them and basically found the blueprint for how anyone can become rich.

The premise of the book is that it doesn't take money to make money that money starts in the mind.

He says that getting rich first starts with a keen desire plus a plan and unwavering focus so with these three ingredients you can create all the riches that you want.

You to know this whole idea that it doesn't take money to make money that was pretty foreign to me at the time because I thought you just needed a lot of money to invest and to make more money if you've ever heard that old saying it takes money to make money well this book is saying that it's not true.

This book teaches the law of attraction and how once you decide to get rich all kinds of people's ideas and opportunities will come to you to help you get there.

You can Buy the Book from Here:

The school doesn't teach you anything about personal finance. I'm truly grateful for books and everything we can learn from them, amazingly, we can learn everything we need to know about money from a stack of books that altogether costs less than $50.

I really hope you'll check them out so now I want to hear from you which of these books are you planning to read and are there any other personal finance books that I didn't mention here that have made a big impact on your life let me know in the comments.


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