April 9, 2020

My favourite books on Finance

The below books are ones that I have enjoyed the most on finances and wealth – enjoy!

Unshakeable by Tony Robbins

  • Fees from trades and such can destroy your profit – even a small fee on different trades or mutual funds can mean a significant amount over a long period of time
  • Index funds that are not actively managed (and therefore have lower management fees) are the way to go – you also don’t have to think about what to buy, when to buy or how much to buy – you just invest the money and no matter if the market is great or doing awful, you will come out ahead in the long run

Millionaire Teacher by Andrew Hallam

I liked this book a lot – and I think I would have enjoyed it even more (and learned a lot more) if I had not read Unshakeable by Tony Robbins (above). I did learn a few new things though:

  • Wealth is having enough money to never have to work again, if you choose; and wealth is having investments, a pension or a trust fund that can provide a person twice the level of their country’s median household income over a lifetime
  • A balanced portfolio consists of index funds and bonds – at the end of every year, if you have more bonds, sell some to buy index funds; if you have more in your index funds, sell some of those to buy some bonds
  • Again, similar to Tony Robbin’s book Unshakeable, fees are what kills your profits
  • What I really liked about Millionaire Teacher was that he broke down investment vehicles by country – I find that some of the books I read on financial planning and wealth are often based in the US and while the underlying knowledge and principles are great, I think some readers probably do not want to do the work to find out what the best investment platform is in their country / region

I will teach you to be rich by Ramit Sethi

  • Pay yourself first. Invest in your accounts right away. Make things automated so that you do not have to think about paying off your credit card or paying off those regular bills you have
  • Do regular audits of what you pay for in terms of subscriptions – services such as Netflix, Cable, Phone or Internet. Call every year to ask for discounts if you can – saving $10 / month means you will save $120 a year.
  • Most financial authors recommend a budget but don’t actually keep a budget themselves. Rather than trying to nickel and dime yourself (e.g., eliminating that coffee that you get every morning from Starbucks to save yourself $5), think about the biggest purchases that you make and determine a strategy for how to save money on those big purchase / big ticket items – items such as cars (buying used), houses (shopping around for mortgages), etc.

How my life has changed from the above books

  • I’m based in Canada and almost all of my investments are in Roboadvisors and index funds (WealthBar, WealthSimple, Questrade)
  • I have a small amount of investments in LendingLoop (these are probably the ‘riskier’ investments I have
  • I invest first (money is automatically taken out of my bank account and transferred into my investment accounts) and then spend whatever I have leftover
  • I don’t keep a budget but I do try to keep track of all of my expenses (through Mint) that I regularly review – this is so that in case there are charges that I do not know of or bank fees, I will be on the phone right away to complain or to inquire about the fees to get those refunded.
  • I heard this from the Minimalism Podcast – if you want to purchase something that costs more than $30, you have to wait at least 30 days to purchase it. If after 30 days, you still want to buy it, go ahead but often times, you will find that your desire will go away OR you will have done your research and found ways to save some money on the purchase.