Top 3 Personal Finance Books - Setting the Foundation

Happy New Year!

So I bet you've made a bunch of New Year's resolutions and this year you're going to get all your financial ducks in a row, right? There's a myriad of personal finance advice out there, so it can be difficult to sift through he garbage. Fortunately by reading just a few personal finance books you can be way ahead of the pack.

You might be asking yourself, what is personal finance anyways? Personal finance is the very practical subject about how to handle money in your life. There's no escaping it, we all deal with money everyday. We work hard for our money, so wouldn't it be nice to learn how to get your money working harder for you. Personal finance is about enriching your life by doing such that, it's about learning how to handle your money in such a way to become financially free.

 Financial freedom can mean many different things to many different people. There's no one size fits all plan, which is why it's important to tailor your finances to reach your own personal goals. Money should never be an end in itself, but a means to an end, which is why it's so important to set financial goals in the first place.

By understanding the purpose of money in our life we can live a much more meaningful one and truly build wealth. Personal finance isn't about amassing a fortune only to be a miser. It's about having security in knowing that you have enough to weather life's inevitable ups and downs, providing for loved ones, and the freedom of enjoying what life has offer.

The topics covered in these books include:
     - The role of debt (particularly how bad credit card debt is)
     - Setting financial goals
     - Paying yourself first
     - Mortgages
     - Insurance
     - Saving for retirement (RRSP for Canadians, 401K for Americans)
     - Investing

By reading these three books you'll be setting a strong personal financial knowledge base. There will be some repeating themes in these books, but they're each taught in a slightly different way. One author may explain a certain theme that will really get through to you, while another may bore you. So my recommendation is to read them all, eventually something is going to sink in. By doing so you'll gain a clearer picture of what to do with your money so that you can eventually become financially free:

1) The Wealth Barber by David Chilton

 For more information visit:
http://reynold-savemoney.blogspot.ca/2010/06/one-of-best-personal-finance-reads.html


2) The Millionaire Teacher by Andrew Hallam

3) The Automatic Millionaire by David Bach

For more information visit:
http://reynold-savemoney.blogspot.ca/2010/09/whats-your-latte-factor-automatic.html

Here's a short video clip about Andrew Hallam's story and some of his solid financial advice:

Bless John Tesh

On the financial road of life we will all have debt in one form or another. It is critical to be able to distinguish between good and bad debt, so that we can manage and eliminate our bad debt. Check out a previous article which is about this subject: http://reynold-savemoney.blogspot.com/2010/08/know-your-debt.html.

It is also important to note that it is extremely difficult to invest and build your net worth when you still have outstanding bad debt. Yesterday's article was about trying to eliminate the worst bad debt of them all, consumer debt! http://reynold-savemoney.blogspot.com/2010/08/pay-off-debt-or-invest.html.

I've included a couple short video clips from John Tesh's radio program called "Intelligence for Your Life" about getting rid of credit card debt. The John Tesh radio show is one of the best radio shows on the air today. I love how he packs so much useful information in such a short amount of time. Check out the John Tesh website for streaming podcasts http://www.tesh.com/ or try to find him on the radio.

One of the Best Personal Finance Reads - "The Wealthy Barber"

One of the best personal finance books that I've ever read is the Wealthy Barber by David Chilton. The story starts with some friends looking for financial advice. They end up finding advice from a very unlikely source, their local barber. Their local barber is someone who is not expected to be wealthy but they soon find that he is very well off. The wealthy barber's finanacial status is not through an exceedingly high income but through extremely wise spending habits. I highly recommend spending the time to read this book. It covers a lot of personal finance topics such as life insurance, education funds and real estate.

One of the main messages of this book was to pay yourself first. This can be done by setting up a separate savings account that you will not access and putting aside a set amount of money every week or month into the account. It may be hard at first to stretch an already tight budget, but usually we spend what is within our grasp. Putting a set portion of funds aside on a systematic basis will divert funds that are available at your finger tips that you might spend impulsively and allows you to build wealth. It would be a good idea to start small i.e. $5 a week and slowly build it up as time goes by. When the money has accumulated into a significant amount it would be wise to invest it to accelerate its growth.