Personal finance books to get on your reading list

1. Great on money management

 Money Master the Game: 7 Simple Steps to Financial Freedom. By Tony Robbins

Tony Robbins interviewed some of the world’s most successful investors in order to write this book, which ended up being a New York Times bestseller. From those interviews, he gleans 7 steps to financial freedom that anyone can apply to their financial situation. Some of the lessons include why you should never underestimate the exponential power of compounding interest, reaching financial freedom by picking one of five financial goals and how to diversify your investments by using a 3-bucket system which covers safe investments, riskier investments and investments with profits from those first two.

“What matters is that you master money and it doesn’t master you. Then you are free to live life on your own terms.”

2. Great if dealing with debt

The Total Money Makeover By Dave Ramsey

The advice in this book has been distilled from 20 years of financial teaching and counseling, into seven easy steps to get you out of debt. Dave Ramsey also gathered the stories of 50 people who have used the principles he teaches in the book to turn their financial situation around. In it, you will learn how to develop a plan that ensures you get out of debt and change your life. The difference between this and other books is that it does not only focus on getting you out debt, but also helps you break the behaviour that placed you in that situation in the first place.

“We buy things we don’t need with money we don’t have to impress people we don’t like.”

3. Great if you want to diversify your income streams

The $100 Startup By Chris Guillebeau

One of the best ways to make money is through passive income streams. With just sh10,000, a little planning, action and sacrifice, anyone can start a business. The author studied 1500 people, who now earn over sh5 million a year from a business they started with only sh10,000. In the book, he gives details of how 50 of those people did it. The special thing about the book is that these people did not have really special skills, but were able to turn their passions into profit. From the book, you will learn how you too, can do the same thing based on your interests.

“The money you have is all you need. The skills you already have can be put to use helping others and earning a good income for yourself. Don’t take it from me; take it from all the unconventional entrepreneurs in the study.”

4. Great on managing your salary

Your Money or Your Life By Vicki Robin and Joe Dominguez

You are unlikely to become wealthy just from your work income, but considering it is probably what takes most of your time, it is worth taking note of how it plays into your financial wellness. In this book you learn that every shilling you earn represents a portion of the energy you have spent. It helps you understand whether what you earn at your job is really commensurate with the time, resources and taxes that go into it. If not, you learn how to re-evaluate things and get more out of life and receive fulfillment in proportion to the hours of life energy spent. It helps you transform your relationship with money.

“Is a way to approach life so that when asked, “Your money or your life?” you say, “I’ll take both, thank you.”

5. Great on wealth building

The Millionaire Next Door By Thomas J. Stanley and William D. Danko

This book helps you realise a number of things, most importantly that anyone can build wealth regardless of their financial situation or education. You learn the seven common characteristics of the truly wealthy (not those who appear to be wealthy), which include the facts that they:Live below their means, allocate their time, energy, and money efficiently, in ways conducive to building wealth, believe that financial independence is more important than displaying high social status, are proficient in targeting market opportunities and they choose the right occupations. You also learn more about the five factors that they all seem to share that got them there, which are Integrity, discipline, social skills, a supportive spouse and hard work.

“If your goal is to become financially secure, you’ll likely attain it…. But if your motive is to make money to spend money on the good life,… you’re never gonna make it.”

6. Great on building your savings

The Year of Less By Cait Flanders

This is a very unique account of how the author decided to ban herself from doing any shopping for an entire year. The book does not set out to give advice, but rather to tell her story, from which we gather one lesson: It is possible to live on much much less than you imagine. One does not have to be as drastic as she was and not buy anything for an entire year, but it shows that a lot of people who believe they cannot save, can in fact do with a lot of the things they believe they need, and thus succeed at saving more. It will alter your mindset regarding money, materialism and self-restraint.

“The ban uncovered the truth, which was that when you decide to want less, you can buy less and, ultimately, need less money.”