Okay this does sound naive. However I have free time this weekend and want to read 1-2 of the best selling books on getting rich. Mainly to understand what kind of advice they give on finances and/or personality traits. Please suggest your favorites.
A lot of the book is biographical, but that part is very entertaining. Dennis is very upfront about drive, sacrifice, and luck required. Definitely not warm and fuzzy.
Well, it depends what you are after. Do you actually want to get rich, or do you just want to get a warm fuzzy feeling reading about getting rich? Because if the latter then Rich Dad is exactly what you need.
From what I remember, the book's premise is about using money to make more money and that true wealth is a derivative of investing wisely. Sure, maybe for you this is a no-brainer, but for the average American and perhaps the average hacker this concept can be life-changing.
The guy has never made a cent from anything but MLM and this series of books. The "rich dad" is not a real person, though he still markets it as autobiographical. Much of the specific business advice he gives is 1) provably dumb, 2) unethical, 3) sometimes illegal.
He's built a whole cottage industry around one basic premise- you get rich if you have lots of residual income that doesn't require you to put in proportional hours. If you need a series of 7 books (or even the first one) to teach you that (though I admit the board game is fun on its own merits)... perhaps your not entrepreneur material?
My key takeaway from RDPD was a confidence that getting rich is not as hard as the typical middle class person is often led to believe. His entire attitude towards money is infectious. That alone makes the book worth the read.
Also that fact that it's a very small book, which means the time investment required to read it is very low. I love little books for this reason.
RDPR isn't really as much about getting rich as it is about being rich. Getting rich requires skill, luck, etc. Being rich requires a different mindset in order to continue being rich. Rich people don't buy fancy cars. They buy things that turn a profit so that they can get fancy cars. That's what RDPD is about. I don't know about the rest of the series of the MLM stuff.
I think reality has catched up with a lot of what RDPD is about, namely buying real estate properties and then letting others rent them, when the housing and credit markets crashed. The one good lesson from the book now seems to be that you cannot expect high returns without high risks.
Yeah, real estate is no longer a good investment...people still need a place to live, and rents aren't really down much, and values are WAY down, which would seem to imply that this is a once-in-a-lifetime market opportunity for buyers, but it just seems so risky when you watch the news. Oh, and the overall population of the US continues to grow rapidly, plus the increasing urbanization means that more and more people are living in cities, but that whole real estate things is a house of cards, right? Hmm...and real estate has been making people rich for hundreds of years, but everything has changed now. Right?
I just looked into this here out of curiosity. I'm in Vancouver, and for a $300k apt downtown (~550sqft), it's rentable for ~$1300/month minus $200 in strata fees.
So, even if I don't pay anything to a bank for mortgage (i.e. I've just got 300k cash sitting around), I'm looking at ((1300-200)*12)/300000 = 4.4%. With a mortgage, or other incidental expenses, it looks pretty unattractive.
Am I missing something, or are the property values/rental market here just not suitable for rental income?
(Genuinely interested, 'cuz hey, I want passive income as much as the next guy)
1. Real estate is generally more attractive once you add the concept of leverage.
2. Buying single family homes retail and renting them out is typically difficult from a cashflow perspective, especially in desirable urban areas. You might be better to try multifamilies.
3. Many would argue that a wide disparity between the sale price of a property and the ROI for that property if rented has historically been an indication that the price is unsustainably high.
4. In general, investors also look for returns through appreciation, amortization, cashflow, and tax advantages.
5. In spite of all of this, the situation is worse than you imagine. The industry-wide operating expense ratio for real estate is close to 50%, something new investors often have trouble believing. Taxes, insurance, vacancies, management, maintenance, etc. all adds up. A good rule of thumb is to take your gross scheduled rent and divide it in half. This is what you'll have left to pay the mortgage.
There are tons of great books on real estate investing, by people who have built fortunes of millions actually doing it. It's definitely possible, but not easy.
So it does seem unreasonable here because there's not a lot of leverage possibility right now when the mortgage rate >= cap rate? (learned that term today ;) Or at least I'd be depending on other things (like appreciation) for value.
50% operating does sound crazy high, I was thinking strata + tax + a few % for maintenance, but I guess it all adds up.
Others have already suggested the best overall books I'd recommend in terms of philosophy, but in terms of the nitty gritty details of actually doing it, I'd recommend Ready, Fire, Aim: Zero to $100 Million in No Time Flat by Michael Masterson.
Not everything will be applicable to your situation but it's a pretty detailed guide to taking an idea, launching it, and building the company around it up to a multi million dollar company.
Check out "The Millionaire Mind" and "The Millionaire Next Door". The book isn't really about how to become rich. More about the mind set a millionaire has to get rich and stay rich.
Ramit Sethi's I Will Teach You To Be Rich was nicely written and has a lot of supplementary stuff, mostly centred around managing personal finance well. Probably not one of the "seminal" books - it's new - but a decent read.
I'll second this recommendation. Very good for young single people. It's not a get rich quick book. It's a get rich slow the old fashion way book. What it does best is provides a framework for budgeting and saving that's easy to follow.
The best selling book is Tony Robbins "Unlimited Power" with like 9 million copies sold, but its also about fitness, so its not as targeted as you might like, although I liked it, but I'm not rich.
Another one which I liked was, "Losing My Virginity: How I've Survived, Had Fun, and Made a Fortune Doing Business My Way" Richard Branson
It's how Branson got rich which is pretty interesting.
I really enjoyed The Dream by Gurbaksh Chahal. He founded BlueLithium, which was acquired by Yahoo. The book goes into detail about the attitudes required to get rich and manage wealth. Here are a bunch of other books written by rich people as well: http://www.bigwinner.org/books
Biographies of the very rich and successful who started with nothing are usually very good. I look for common themes and key points in their lives. A few of my favorites:
I second both "Richest Man in Babylon" and "Think and Grow Rich." Both were recommended to me by a very successful VC that attributed much of his success to those books. Both are very good. "Babylon" covers many principles of wealth while "Think" is more about the psychology, so they complement each other well.
Probably not what you have in mind, but The Wealthy Barber ( http://www.wealthybarber.com/ ) provides common-sense advice for accumulating and managing modest wealth without needing corporate success.
Yes. Actually I read this 2 yrs back and can remember most of it still. The point that you create wealth by making things other want had a great impact.
Another great article and I would recommend it any day but if you are in the mood for a more fuzzier and feel good read with some good-living advice thrown in then grab a copy of "The Science of Getting Rich" by Wallace D. Wattles, available freely as a pdf on the internet.
Looks like I'm getting down voted for not contributing anything worthwhile to the conversation.
I'm not a huge fan of get rich books and I wonder how many rich people ever read any of those books.
Also I don't really like the idea of hoarding personal wealth - why is it that the richest in the world seem to often give away their wealth after they have accumulated it? eg Bill Gates, Warren Buffett, Andrew Forrest.
I remember reading somewhere about Warren Buffett. He said that he enjoyed the challenges of making money not the money itself. He also mentioned that to be ultra 'successful' one needs to devote oneself completely to making money to the exclusion of all else. Doesn't sound like the road to happiness to me.
From where I'm standing it seems that most people who got rich found something they loved doing and were really good at (the threadless guys are a good recent example). The money was a nice side effect of their passion.
A lot of the book is biographical, but that part is very entertaining. Dennis is very upfront about drive, sacrifice, and luck required. Definitely not warm and fuzzy.