5 Best Guides to Beginning a Life Free of Financial Worry

It is beginning "the thing" or "the change" that can be the hardest, isn't it?

When I was at my lowest financial point of worry and anxiety, these five books lifted me up and over debt toward a life of fun frugal living and some financial security.  So I'm sharing the wealth.

Amazon has it on sale from time to time

 

1.  How to Get Out Of Debt, Stay Out Of Debt and Live Prosperously

This was the first book I read that took the shame out of debt and addressed some of the emotional issues.   It inspired me to take a second job as an adjunct professor.  This didn't pay much per hour but the extra $2K in a year helped lift my family out of debt.  I felt like a cork, bobbing above the water and suddenly seeing the shore.  What a relief that was! 

I found a copy of this one for .01 on Amazon!

2.   "The Only Investing Guide You Will Ever Need" 

This was the second financial self-help book I purchased and still have on my bookshelf.  Why?  Because it's so funny, lighthearted and real.  

Tobias is a Harvard graduate who helped me understand that when I avoided buying something, or saved $1.00 on something, I was actually saving $1.50.   A penny saved is a penny and a half earned! And understanding how our taxes affect your personal finance is mission critical. 

If you are being taxed at the 25% marginal tax rate for federal income tax, then add in state income tax, then add in sales tax -- well, you could say that you are being taxed at approximately 50% (for the ease of the example, even though it might be a little high).  

So, as Tobias gives as an example in the book, if you go out to eat on Thursday night and spend $40?  Well, to replace that $40 could mean that you have to earn $50-$60.  

Even though Tobias is a very wealthy guy, he still buys canned tuna "long" (i.e., on sale), and stores the extra cans under his bed.   He goes "short" on tuna when it's very expensive (i.e., he uses up his stores).  


Seriously people, this is how rich people act.  Just be careful you don't overbuy on tuna and never use it.

This is about $8 on Amazon

3.  I Will Teach You to Be Rich

So inspirational and easy to read.   

Ramit promised to show me how to make $1K a year in a side gig.  I didn't think I could do it.  But then I did.  And I still make $1k a year doing a side gig.   

I don't know how he does it, just call it "Ramit Magic"

Found this for .01 on Amazon too -- great deal! 

4.  Your Money or Your Life

Ground-breaking,loving and practical approach to understanding how you are trading your "precious" life for that new toaster, or pair of shoes, or kitchen blender, etc., etc.  -- is it really worth it?  Good practical guide to understanding how much your job is really paying you per hour.   

Think you are getting $30 per hour?  Add in all those hours to commute, the wardrobe costs, the unpaid CEU hours, the hours just unwinding from the stress...  hmmm...  maybe it's time to rethink that hourly rate down to about $5!   And the toaster really cost you four hours of your precious life.  Hmmm...

Definitely an eye opener for me and one of the inspirations for Breaking Free From the Corporate Cube.    Inspirational for living well on less.   

Still about $10+ on Amazon

5.  The Millionaire Next Door

Last, but certainly not least, the granddaddy of them all, "The Millionaire Next Door."  Reading about this scene from the book (page 27), with the Decamillionaires (worth $10 million or more) is the best take-away you can have this frugal Christmas.

The professors who wrote the book wanted to study millionaires, so they invited the subjects to a focus group.  Wanting to make the millionaires comfortable, they provided wine and caviar for the group.   Here's what happened next:   When one of the group members (who owned several pieces of downtown New York property) was offered a glass of 1970 Merlot, he said 

"I drink Scotch and two kinds of beer - free and BUDWEISER!"  

It's also where I first heard the phrase, "Big Hat - No Cattle," -- a term the millionaires saved for those who flashed fancy cars and clothes, but had no assets.  

Here are more millionaire tips.

That's my top five that will keep you busy learning through the cold winter nights ahead.  Do you have a favorite I missed?  Share It!


Disclaimer:  If you do decide to click on one of the photos and buy one of the books, I will receive a small commission from Amazon.  It didn't affect my list one whit -- I've had these books on the shelves for years.  And any proceeds will go back to making the blog better!

Pay Off the Mortgage or Not?

Just my opinion, but.... this hotly contested question is really the wrong question to ask.  Which is why there is so much debate about it, perhaps. 
   

The important question to ask is "how much does housing cost me every year?"  And the answer tells you whether or not you can and should pay off the mortgage, or if you should have a big juicy mortgage the rest of your life.   

What?  NOT pay off the mortgage -- ever??? 

The idea of not paying off my mortgage came from Ric Edelman in his book The Truth About Money," 4th edition.

He outlines great reasons to carry a big, long mortgage.  

• A mortgage is cheap money. 
• Greater liquidity.  
• You can sell without selling (get your equity back by refinancing your mortgage). 
• The list goes on.  Most telling is the story about the widow who had a lovely $500,000 home - paid off.  But had no cash to maintain it, travel, etc.  It's an important read.

Whether you pay off your mortgage or not, you still have monthly maintenance, taxes and insurance.  You'll never be without housing expenses.  And these expenses are subject to inflationary pressures.   Just a few years ago in my state a law was passed that allow insurance companies to charge you up to a 2-3% of the home value as a deductible for damage from a "named storm," i.e., Hurricane.    Hmm..

5 More Reasons to Escape the Corporate Cube & How - Money In Real Life Stories

 

6.  You want to be (a little) like Sofia Varga.   

You know, "Gloria" from TV's Modern Family.  In real life she's savvy, hip, wise, and quietly building her own media empire.   Latinas are dropping out of Corporate America and cutting their own paths to financial AND emotional well-being. 

7. You Can Exit the Party Slowly, and Take a Few Cookies With You.   

There is still something to be gained out of your current Corporate Cube Job.  Contacts in the next cube are your potential clients, future collaborators or even your investors. 

• You are still learning. Money In Real Life (MIRL) Story:  For example, my partner became an seven figure entrepreneur after spending a few years as a CPA.  He learned from every client – what to do, what is realistic, what things cost, how taxes worked.  This knowledge was invaluable for his future as a business owner and real-estate developer.
• That Guy In IT probably has a side-hustle too and can help you when you need IT expertise and don't have a whole department to call on.

How To Become a Millionaire

The old adage is that if you want to be someone, then act like they do. Dress For Success books are built around the idea that if you want to be the boss, you have to look like bosses look.

This is the first post in a series on how I've used good personal finance books to build a six-figure nest egg over the past 9 years. Maybe these steps will work for you!

Now I know that the odds of me becoming a Millionaire are pretty slim, considering my age and the big bumps in my history. But I know I can do better than I am doing now because I have a history of success -- and you will too, if you follow at least some of these steps.

So I'm working millionaire habits into my life by doing some of the things (not all of the things) that millionaires do as outlined in several books, the first of which is The Millionaire Mind, by Thomas J. Stanley, Ph.D. I've recommended it before, and continue to learn more from it. Here is how you can follow some of the advice from that book and add to your net worth.

1) Buy a used copy from Amazon, if you want to buy one that you can mark up in. I've gotten books from Amazon.com's used sellers as low as 15 cents -- shipping has been the biggest expense. Otherwise, get it from the library.

2) Studying and copy the success factors:

a) Hire a good CPA. I hired a CPA to review my tax forms this year. It helped me save hours of work around a confusing issue with my 529 plans for my daughter. Does this sound counterintuitive? I thought so, until I hired someone who handles small businesses. She understands my situation and saved me enough money by pointing out an obscure deduction that her fee of $150 was paid for.

"More than 2/34d of self-made millionaires in America rely on the advice of CPAs and attorneys." A direct quote from page 153 of the Millionaire Mind book.

Also, after taking a 12 month diary of the lifestyle activities of millionaires, it was surprising to see how much time wasn't spent on yachts, eating out or traveling. 85% of all millionaires inteviewed spent time consulting with a tax expert. No other activity was as common among all the millionaires interview (733). You can see other results on page 373 of the book.

Considering how much of my income is eaten up by taxes, I can only imagine how much a millionaire spends, so the time allocation makes sense. I'm going to spend more time learning about legitimate tax deducations. I file under head of household until my daughter is 23, so I don't have to do too much bobing and weaving, but I need to start getting my house in order for that day.

b) Millionaires clip coupons and shop at Sam's or Costco. I went to Sam's today to load up on toilet paper, and cat litter. Toilet paper was .002 per sheet (36 rolls * 200 sheets per role = 7200 sheets at $14.83 per package for Quilted Northern). Charmin was twice the price.

Cat litter was .34 cents per pound for Fresh Step. I splurged on the name brand because I live in an apartment and don't want the adored cat causing a stink, so I paid a little higher than my target rate of .325 per pound, which is available with the off brands.

I saved $10 because I used a gift card that I earned as a special when I renewed my Sam's Club membership.

c) According to Dr. Stanley's research, more millionaires spend free time with family and friends than yachting. They understand how much value friendships bring to happy lives.

So I took a walk with a friend of mine today who is going through a rough time. We got to reconnect!

I also want to entertain at home at least once in the next 30 days. So I have a wine tasting at my home scheduled for early May. Cheaper than going out...

There is a tremendous amount of information in Dr. Stanley's book. In the interest of full disclosure, if you buy through the link to the right of my blog, I do get a small fee. But I recommended this series of books a long time before I had any particular interest in promoting the product. And I recommend getting a free or used copy if you can, I'm a big fan of the library system!

More steps to becoming Financially Free coming soon. Have you tried any of the steps mentioned above and been successful? Or hated them? I'd love to hear your thoughts...please comment below.

Coco.