My Top 2 Books for Achieving Financial Freedom

My top 2 book recommendations that are a must read if you want to become better with managing your finances, improve your financial investment decisions, and just want to be smarter with your money:

1.) The Richest Man in Babylon by George S. Clason

2.) The Simple Path to Wealth by JL Collins

Despite what the titles may suggest, these books are not simply a means to get rich; rather, they serve as tools to understand money and how to make smarter decisions regarding it once you grasp its value. One of the many things that perplexes me is why the concepts described here were not extensively taught in grade school. I believe they should have been, given the significance of money management in various aspects of life. Mishandling finances can have far-reaching consequences, impacting mental and physical health, as well as relationships.

Growing up, I sensed that something was missing in my understanding as I worked hard and earned a living, yet found myself living paycheck to paycheck. I even had a credit card with a small balance for a brief period before realizing the potential dangers if I couldn't pay the full amount before interest accrued. Due to various reasons, too lengthy to explain here, I didn’t really have a reliable person to go to for financial advise. Consequently, I took it upon myself to learn. These books have been invaluable in my personal journey, and I highly recommend them to any family member or friend.

1.) “The Richest Man in Babylon” by George S. Clason

Why this book: If you feel as if you are constantly living paycheck to paycheck even with an appropriate salary, or are in debt, this book could really help you. If you have gained wealth and you want to know how to protect it, this book could help you out as well. Regardless of your personal financial situation, you can figure out areas in which you can improve and achieve prosperity by following the fundamentals introduced in this book.

My thoughts: Even though the title has the word richest in it, this book is really about wealth creation, as there is a difference between being rich and being wealthy. Grasping on that fact, the book presents a collection of parables and stories set in ancient Babylon and gives valuable lessons and wisdom for achieving financial success and building long-term wealth. The number one thing this book taught me is that our desires are like the ocean, there’s no end to them. As I reflect personally, I agree completely with this statement. Our desires will never end, and so it is on us to self-discipline ourselves.

It teaches a few fundamentals, some of which include:

1.) Paying yourself first: Take at least 10% out of your paycheck for your investment fund first. It teaches one how to break down their paychecks so that a certain percentage goes towards savings, towards bills, food, and other needs. The rest, we can spend on our desires and whatever desires we don’t fulfill, not to worry about it cause again, there’s no end to what we want.

2.) Living within your means: Spend less than you earn and avoid excessive debt. This fact is also introduced again in the second book I recommend.

3.) Seek Knowledge: You should continuously be learning about financial management throughout your life. Seek knowledge from books and from experienced individuals.

4.) Take Calculated Risks: This is especially valuable to those who are overly cautious and/or let fear prevent them from going after opportunities that could benefit them financially.

5.) Protecting your wealth: It teaches you how to safeguard your wealth through taking appropriate measures to protect your assets and not trusting others blindly with your finances.

The book is an excellent, easy and fun read with entertaining examples that stick. It also teaches the power of saving little by little and just like placing a bucket under a roof with leaking droplets, you will be surprised in the end how much you have collected in your bucket. It then teaches you how to invest the money you have saved with a lot of good examples of what are good investments and what are not. The lessons learned in here are not something that will be learned overnight, they require constant effort on your end throughout your life as well as self-examination from time to time to see where you stand.

2.) “The Simple Path to Wealth” by JL Collins

Why this book: This book is a great read for many. If you struggle understanding complex financial concepts, struggle with investment decisions, if you get anxious and are uncertain about retirement planning, this book could the solution to your struggles. It offers a good solution to professionals who are busy in their fields doing important things and don’t really have the time to be bothered with financial investments, but could benefit still from investing if only these complex concepts were made easier to understand and handling their finances was easy to do. It offers a straight forward, yet tried and validated approach to low-cost index fund investments (S&P 500 index funds and Total Stock Market index funds) which are easy to manage for any professional really.

My thoughts: This book felt like the perfect continuation of the previous book and I recommend you read this after the first book. A lot of the same concepts are introduced but apply to investing in the right tools in the stock market. It follows a minimalistic approach, and recommends the reader get rid of complexity from their financial lives. It offers the same formula as the previous book: Spend less then you earn, and invest the surplus. Invest in low-cost, broad-based index funds. The author really emphasizes the importance of avoiding high fees and expenses associated with financial advisors and actively managed funds, an advice I feel can help a lot of busy successful people especially in the medical field.

I really like the big picture concepts introduced in this book, and how every day, small positive financial decisions can help you, the reader, achieve financial freedom. This book introduced F-you money for the first time to me, and talked about the benefits one can get once they have achieved financial freedom. The book even gives an example of a famous sports figure who earned $400 million in their career, yet filed for bankruptcy and this example tied in with what I learned from the first book, that our desires will never end so we need to self-discipline ourselves in this area. Overall, it is an amazing book that goes beyond finances, and even talks about topics such as taxes and frugality. It is a book that emphasizes the reader to make informed decisions in order to gain financial independence, and build long-term wealth.