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I never thought I'd see the day where I'd be writing a post about this, let alone living my life like this. I mean, as a kid all I wanted to do was run around, play soccer and hang out with my friends.
Actually, I take that back, I still wanna do that. BUT, the difference now is I have a little more willpower to stop myself from doing whatever I want all day long. Plus I need some monies from my day job too.
There's nothing more I'd like to do than spend the weekend playing soccer, going out in the city, spending money on bottomless brunches and whatever else. But at the end of the day, I know that's not gonna help me get rich.
It'll most likely do the opposite pretty quickly. Instead, what you itould be doing is getting your hands on as many books as you can to figure out how to start making yourself some extra income!
When I was in high school, I'm pretty sure I only finished one or two books. You couldn't for the life of me get me to finish a book unless the cover of it said “Cliff Notes” or “Spark Notes”. Not for anything, as a 17-year-old living in the suburbs, I just didn't care what Shakespeare had to say hundreds of years ago, nor did I care how things fell apart in Nigeria.
I was a kid, what do you expect? I didn't wanna make a random interpretation about a passage that the author probably wasn't trying to say anyway.
But when I began realizing reading could help you make money, and I'm talking millions, I was like “uhh well hell yea, now I love reading, why didn't anyone ever tell me this would work!?”
Reading is single-handedly the greatest investment I ever, and you ever, could put your money in. Sometimes it's even free! When I first got a job I was constantly reading articles on how executives maximized their days, what their routines were when they worked how, how others' routines completely differed from someone else's, etc.
It was like a little crack in a dam that slowly lets out water day after day until finally, the whole wall bursts open. Eventually, I couldn't stop reading about all this stuff. I learned a ton. Examples like don't bring more people into a meeting than whoever is directly related to the topic, turn off email pop up notifications in Outlook, don't have meetings take more than 20-30 minutes, have meetings late in the afternoon when people aren't as motivated or energetic as they are in the morning to do their job.
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Stuff like that led me to segue into buying books on all that stuff I was interested in. The first book I ever bought related to self-improvement was Smartcuts. It's a great book, it really makes you think twice about how to network and what it really takes to advance your career. I should actually probably read that again since it's been so long.
It wasn't even a big book, and I learned a lot from it. At first, I was embarrassed when people would ask me what I was reading and told them what it was. I wasn't used to that since I never really voluntarily read anything on my own. But now, I'm like “dude you should definitely read this” for whatever book I finish that I think is worth it.
Right after that book was when I got Money Master the Game for Christmas from my dad. I was intimidated at first because I didn't have a clue about money or stocks, but after finishing it, I was like holy cow it's really not that complicated.
Everything I learned about investing, habits, learning how to learn, how rich people manage their days, how they view money as a tool, all came from reading books and articles online. It's sad, but I really think I learned more important, applicable lessons through books than my 4 years of college.
Yes, of course, college teaches you how to be more responsible and kind of live on your own if you haven't before and sort of turns you into a mini adult, I get that. But other than that, the actual course material, in my opinion, didn't help me as much as the books I've read. I wasn't studying to be a doctor or a pharmacist so I only needed undergrad.
I was a psych major so I mean, I was already interested in the topic, it didn't help me become curious about how and why other people think the way they do, and I wasn't trying to get a Ph.D. here. It's basically a 4-year party for $200,000+.
But when I look back at the ROI on the books I've read, it's insane. I've read books that literally are going to create income that's worth thousands of times my initial investment. Just think, the best book Warren Buffett says he ever read on investing, The Intelligent Investor, today costs $15.
Even if I managed to make only $1 million over 45 years from what I learned about investing from that book that's 66,666x my initial investment. Where else are you gonna get a return like that??
And just a quick side note, don't even try to tell me $1 million is a lot of money. It's not. In 45 years, $1 million will have the same purchasing power as $329,174 today factoring an inflation rate of 2.5% every year. There's no way you're funding a retirement off of that living on $10,972 a year. And the average inflation rate is 3.22% so, good luck with that.
Keep in mind, I knew NOTHING about investing before I started reading about it. Think about this, in 2015 I didn't wanna invest in Apple when my dad suggested it, because I thought $97 was too expensive, because well, hell it was $97!
Now it's 81% higher as of this post! And the funny thing is when it did dip down to $96 a year after that suggestion, I thought it was a steal and invested. Woops!
I really had no idea what to look for in a stock back then, and now I know a ridiculous amount more than I did just a couple of years ago and have done pretty well so far!
And you can't read strictly books about one type of investing or only books about investing. Yes, you need a solid foundation and understanding of the fundamentals, but you need to also develop a broader spectrum of knowledge. This is why now I see that most other ways of “investing” is nothing more than guessing.
You can't confine yourself to learning about P/E ratios and margins of safety alone. You need to read books on psychology, history, different industries in the economy, business books on companies, etc. Like Charlie Munger says, you need worldly wisdom.
I'll give you a couple examples: one of my favorite books that has nothing to do with stocks is called the Innovator's Dilemma. It gave me an incredible understanding of why some companies fail after a while and why some continue to succeed. Literally, every time I evaluate a company, I subconsciously refer back to this book.
This is why I think, for now, Apple is a solid pick. Another example of this is Amazon. Although they don't have a dividend plan and their price/earnings ratio is sky-high, they may be the only exception to my guidelines if I ever decided to pull the trigger at the right price.
Anyways, I digress.
Two books I'm reading right now are The Four and Poor Charlie's Almanack. The only reason I'm reading two is because Poor Charlie's Almanack is too awkward and large of a book to carry around on my commute! It won't fit in my bag, so I'm not lugging that thing around.
But these two books do and don't have anything to do with stocks.
The Four is about four companies (Apple, Facebook, Google, Amazon) and how they've come to completely dominate the market. I'm learning more from this book than I think I have in the last 5 I've read as far as it applies to investing. I've learned that retail is king, and you need to pay very close attention and have a keen understanding of the directions the companies and industries are moving.
I won't go into detail, and I haven't finished it so I'm not putting it in my recommendations yet, but trust me, read it.
And Poor Charlie's Almanack is a book by the famous Charlie Munger, Warren Buffett's partner in crime. There's a whole lot of emphasis on the point I touched on before how you need to have a kind of wide breadth of knowledge across various topics so you can connect the dots and understand how everything is related to each other.
Munger is a huge advocate for creating what he calls “mental models” in order to filter noise from the signal. He provides a general mental framework for thinking about making decisions in your life, with a focus obviously on investing within the book.
And in order to do this, he says you have to understand how the world works and gain general rules of thumb for several scenarios. You won't and can't have a model for every single situation that occurs in your life, but as long as you can categorize them, you'll be in great shape. And Munger argues, and I agree with him, the only way you do this is by reading a lot.
And he's not the only person who argues this point. In this Rich Habits study, Tom Corley realized 68% of the 177 self-made millionaires he studied read biographies, while 91% of the “poor” people, those with less than $35,000 in gross annual income didn't read biographies.
And biographies are huge because you're able to gain insight into people's mistakes and successes and learn what to do and what not to do. I've read a few biographies on Warren Buffett, read the Steve Jobs biography, the one on Elon Musk, I've read Titan and I learned a ton about what it takes to achieve your dreams. They're some of the most valuable pieces of literature you can read.
I give 100% credit to these books for having me not quit on this blog.
Rich people also read self-improvement books. Apparently in another study Corley conducted, 11% rich vs 79% poor read for entertainment while 85% of rich people read two or more education, career-related or self-improvement books per month compared to 15% of poor people. And the biggest discrepancy was 94% of rich people read news publications like newspapers and blogs compared to 15% of the poor.
How do you like them apples?
And for those of you who need more proof from more notable people, here's a list of facts for ya:
- Bill Gates reads about 50 books per year, almost one a week
- Mark Cuban reads more than 3 hours every day
- Elon Musk is also a huge fan and used to read on average of like 4 hours a day I think it said in his biography when he was a kid
- Mark Zuckerberg resolved to read a book every 2 weeks; did he actually do it? I don’t know, I don’t care
- Oprah Winfrey picks one of her favorite books every month for her book club members to read and discuss
And if that's not enough for you, Elon Musk basically built SpaceX from reading some books. Like actually though. He taught himself rocket science by reading books.
He would go around asking people to borrow their books and soaked everything in like a sponge. Now granted, it's Elon Musk and he's kinda super smart and has trained himself to think about problems based on first principles, but you get the idea. If he can make his net worth rise into the billions literally from scrap metal, then you and I can make a few million over our lifetime and live the good life.
Want a good place to start? Check out my recommendations page.
And before I hear any excuses, don't think you can get away with saying you don't have the money to pay for books, and this and that. I had to owe my girlfriend $350 after she paid for my ticket for a reunion at our school, and I still bought 4 books for $93.46. And they were all nonfiction books. Here's the screenshot to prove it:
So what books are on your reading list? Are they self-improvement books, fiction, nonfiction? Let me know, I'm curious!
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