We all have seen the worst, Corona Virus and Lockdown not only took the lives of many people but also the job. It is hard to survive in the current situation. We cannot neglect the inflation, as we all know the things that can be bought with one unit of our money in 1991, that might need ten units or maybe more. That is why we all need to focus on personal finance. These books will help in your personal finance decisions. We highly recommend reading these best books on Personal Finance in 2021.
“Beware of little expenses. A small leak will sink a great ship.” – Benjamin Franklin
So, What we need to understand here is that not only we need to save money for our present and our future but we need to beat inflation as well. Now if you save the money in your bank or at home you are not beating inflation which is already at 5-6%. So, if you are getting a saving interest of somewhere 4% (which is not currently) you are still lacking behind with 2-3% Inflation.
Can we beat inflation? Can we achieve financial independence at a certain age?
And the answer to these questions is YES, There are ways through which not only we can beat inflations but also we can achieve financial independence. We have researched some amazing books which will teach you how you can manage your personal finance in 2021.
Best Book on Personal Finance: The Psychology of Money
In 2014, when Ronald Reed died at the age of 92, he worked as a janitor, has $8 million in his bank account. He has never invested in a lottery or anything like that. But he has invested a small portion of his salary in Blue chip Stocks. with the help of Compounding his invested amount become this much in 50 or 60 years.
It doesn’t matter how much intelligent you are, the only thing matter in the game of personal finance is your behavior with money. that is what this book is all about.
The author of this book Mr. Morgan Housel talks about how it’s not always about you or your education, but your surroundings and what you have been taught from childhood.
The three main points from this book are:
- The author suggests that we must seek why aren’t we Financial independent yet, what we did wrong, or even if we have tried to do things differently, what does gone wrong. we must understand that Luck shines when we take Risk. So, if you consider that someone is lucky you must think about what risk he or she has taken to achieve that success.
- We must not become so much greedy that we forget about living. The author said that we must understand when something is enough. Enough doesn’t mean stop, but rather this means to step forward but by knowing that I have enough but I will keep working.
- Earning money is one thing and sustaining that wealth is another. You will find lots and lots of people who knew how to make money or who have made a lot of money but then they lost everything just because they don’t know how to sustain that wealth. So, never get overconfident.
Rich Dad Poor Dad
No Personal financial is completed without talking about this book. Written by Robert Kiyosaki, Rich Dad Poor Dad is not just a regular book it’s a Bible for Personal Finance and financial freedom.
In this book, the author has narrated his story about how his dad (Poor Dad) being highly qualified in his field, still is behind the bills and always talk about how everything going to be good if he gets the promotion whereas his friend’s father (Rich Dad) who is a businessman, not so much educated is a rich man and he has time for their family.
Few key points from this book:
- Don’t live for weekends: Most people are living paychecks to paychecks and for weekends. They work while the week just so that they can chill on weekends. And that is why most of these people stay poor. Start working for yourself. Start investing in yourself, with knowledge and money.
- Rich doesn’t work for money: As I mentioned that his friend’s father was a businessman and while working with him the author comes to know that rich people don’t work for money but money works for them. So, we must put our money to work. But How you ask. The answer is by not saving it but rather than investing it. Let your money grow, understand the power of Compounding.
- The reason why middle-class people stay in poverty is that they buy liability. They invest in it by thinking that they have purchased the asset. Car is not an asset until it puts money in our pocket. The same goes for house and cell phones. So stop investing in liabilities. Rich people invest their money and from the returns, they buy all these things fr themselves.
The Richest Man in Babylon
The Richest Man in Babylon is an awesome book. This book is for those who are ambitious for financial success. Written by George S. Clason, this book talks about how to grow our money. Also, this book deals with the success secrets of the ancients, i.e. how to make personal financial plans and how to deal with our own wealth.
Babylon was a wealthy and influential city of all times. There were no resources or very few. But the people of Babylon were hardworking. But there was some rule about money. Those who have followed these rules became wealthy.
Few key points from this book:
- Pay yourself First: With this author means to take some portion of your salary and before giving it to someone and by means someone he meant Bills or loan installment or anything else, we must keep some portion for ourselves and according to the book that is 1/10 of the total salary. Now we must invest this portion in stocks or bonds to get better dividends and better returns.
- Manage your money by yourself: Ask this question from yourself. Are you managing your money properly? if your answer is No then How to manage your money properly? The answer is to learn to invest. This is easy by the way. In this book, you will find many solutions to this problem.
- Control expenses Proportion to your income: If we do not learn to control our expenses, we might lose everything we have. Live below your means. It is hard to make money but it is harder to save what you have earned and there are many examples of this. So, learn to control your day-to-day expenses.
Conclusion: Best books on Personal Finance that you must read in 2021
One must focus on achieving financial freedom. This is how we can live our life freely. Also, we need to beat inflation to save our money. Financial knowledge is very important as I have already mentioned how people with no Financial knowledge can destroy their money. So, keep learning keep earning.