Must read books for better financial management and what they teach you

August 29, 2022 06:41 pm | Updated 06:41 pm IST

Warren Buffett probably never read a book on how to grow his wealth. But then, not everyone is a Buffett! We all need a nudge, a bit of sage advice and some motivation to help us understand money and its workings, and how we can manage our lives better financially.

Books like ‘The Millionaire Next Door’ and ‘Rich Dad, Poor Dad’ have been on our book shelves for several decades now, but there’s a new breed of personal finance books out there which don’t just tell you to avoid debts, track your spending and live below your means. The new age books on financial management are all about building a solid foundation of financial psychology and include aspects like your money mindset and how you can make your money work better for you. We hand-picked a few of these 21st century guides to financial nirvana that can help you re-align your finances with your life goals while showing you how to make prudent investment decisions at every stage of life.

# Why didn’t they teach me this in school?

These 99 Personal Money Management Lessons to Live By that the 2017 book ‘Why didn’t they teach me this in school?’ offers were developed by Cary Siegel to pass on to his five children as they entered adulthood, once he realised that schools teach everything under the sun except personal money management. Drawing from his own experiences as he navigated his financial journey, Siegel has covered topics such as budgeting, spending, credit cards, investing, mortgages, insurance, in plain English and imbued it with practical, real-world wisdom.

He offers advice like ‘Spend Just One Hour Each Week Learning about Personal Finance’, ‘Approach Your Job Following the Three P’s: Passion, Politeness, and Persistence’ and ‘Don’t Invest Your Time and Money in Multi-Level Marketing Programs’, while also dwelling on the advantages of taking out insurance to make sure you are covered and your dependents are not left wanting at any stage of life. Siegel’s sound advice for the uncertain times we live in, fits in perfectly with a savings insurance plan like HDFC Life Sanchay Plus, which guarantees your family’s secure future while ensuring your wealth keeps growing steadily.

Much in line with Siegel’s thoughts on the importance of having a ‘saving versus a spending mind-set’, Sanchay Plus is a plan that assures you not just of life cover, but a steady retirement income and guarantees benefit payouts! It’s an easy to understand plan that gives you 4 plan options -

  • Guaranteed Maturity, which offers a guaranteed maturity benefit payable as Lump Sum at the end of policy term,
  • Guaranteed Income, which offers a guaranteed regular income for a fixed term of 10 or 12 years,
  • Life Long Income, which offers guaranteed regular income up to age 99 years plus return of premium at the end of payout period, and
  • Long Term Income, which offers guaranteed regular income for a long term of 25 or 30 years plus return of premium at the end of payout period.

An added bonus is that you can pay the premium annually, half-yearly, quarterly or monthly, again in line with Siegel’s tip to understand the ‘time value of money’.

Siegel’s principles like ‘Get rich slowly and Set (realistic) short-term financial goals’ are sure to find a resonance and are easy to digest, understand and emulate. This is a book that offers qualitative rather than quantitative personal money management guidance and can be a good friend to turn to when in financial doubt!

Siegel’s golden words-

Don’t try to keep up with the Joneses; they’re going bankrupt

Don’t underestimate the cost of ownership

Prioritize your spending

Stay away from “great deals” that really aren’t

Stay away from “small bargains” that really aren’t

# Let’s Talk Money: You’ve worked hard for it, Now make it work for you

Vicki Robin’s ‘Your Money or Your Life’ sold a million copies back in the 1990s, with its easy-to-follow, nine-step plan to help readers change their relationship with money. Closer home, Monika Halan’s 2018 book is more straightforward with its plain-speak on saving, spending and lifestyle. One of India’s popular personal finance writers, she gives everyday examples and talks about concepts that you and I comprehend easily - fixed deposits, tax issues, and the problems of identifying the right insurance policies to buy. She talks about stories of people she knows and how they have navigated their financial issues, and de-jargons financial terms that most of us cower under. Halan’s advice comes in small and simple doses, like -

You are doing OK if …

  1. you have a three-account system that separates your income, spending and savings;
  2. your spending on living costs is no more than 45–50 per cent of your take-home income;
  3. your EMI payouts are no more than 25–30 per cent of your take-home income;
  4. your savings are at least 15–20 per cent of your take-home income.
  5. The best part? The book is available to read right here.

# The Simple Path to Wealth

J.L. Collins is often considered the Godfather of modern financial literacy, and for good reason. Collins apparently wrote this 2016 book ‘The Simple Path to Wealth’ for his daughter, and in an avuncular way, advises readers to stay away from toxic debt, and confusing, complicated investments. On the other hand, it nicely illustrates how money, when used correctly as a tool, can buy you the freedom you desire, and he lovingly terms it “F– You Money”.

It’s a book that addresses the FIRE afficionados among us, those who believe in the ‘financial independence, retire early’ credo. While outlining the simple path to wealth, Collins talks about the easy investing strategy that made him wealthy enough to retire early! With Collins’ help, you will walk away with a practical toolkit to achieving financial freedom with minimal effort.

Here’s a sampler-

“Complex investments exist only to profit those who create and sell them. Further, not only are they more costly to the investor, they are less effective.”

Needless to say, prudent savings to safeguard your family’s future form the cornerstone of these authors’ advice to anyone wanting to tread a sound financial path. A Savings Insurance Plan that offers to secure the future of your family like HDFC Life’s Sanchay Plus, fits in right with the sage guidance that most modern-day financial gurus give. Sanchay Plus lets you live your life on your terms, while covering you from unforeseen contingencies and helping build a corpus for your children and your retirement.

So, make space on your book shelves for these invaluable tomes to guide you on the path to financial freedom, but also remember to grow your wealth the prudent way by investing wisely in HDFC Life Sanchay Plus today!

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