Financial and personal development books can teach us invaluable lessons about money that can change our lives. After reading over 350 such self-improvement books, I have learned 10 profound money secrets that helped me tremendously improve my finances and mindset.
1. Expand Your Means Instead of Living Below Your Means
Robert Kiyosaki’s book “Second Chance” gave me a crucial piece of advice – instead of limiting your spending and cutting back on things you love, focus on earning more money. Financial planners often tell you to cut down expenses and reduce spending on little pleasures like going out to dinner. But in the long run, passionately cutting back costs kills motivation. It’s better to solve the problem by increasing your income.
There is only few things you can cut back on expenses. But there is unlimited potential in how much extra you can earn. It’s also more energy efficient – you can use one hour of effort to cut $10 of costs or earn $100 more. I know people who scrimp and save every penny, but it wastes mental willpower. Invest that energy into earning more by solving problems for others.
The path to wealth is solving more problems à earning more money à solving bigger problems à repeat. Start small and work your way up. Every solution brings you to the next level.
2. “What’s the Worst That Could Happen?” Calms Your Money Worries
Dale Carnegie’s classic “How to Stop Worrying and Start Living” helped me manage fear around financial decisions. When taking risks with money – be it investing, borrowing funds, or starting a business – ask yourself: What’s the worst that can happen if this fails?
Carnegie says feared outcomes rarely turn out as terribly as we imagine. Analyze the situation honestly – is the worst-case scenario something you can accept and handle? Once you accept the worst outcome, proceed calmly by focusing energy on damage control or alternative solutions.
Acceptance dispels anxiety. Worrying destroys concentration – acceptance brings stillness so you can direct efforts towards fixing problems. This question has given me courage to take calculated risks.
3. Don’t Fall Victim to the Sunk Cost Fallacy
Imagine you are halfway up a mountain when you realize you climbed the wrong peak. The right mountain is next to you. What do you do?
Most would continue climbing their path just because they’ve already invested so much effort into it. This is the sunk cost fallacy – letting past investments of money, time or energy guide your future decisions, rather than what the best course forward is.
To avoid this bias, ignore previous costs and analyze each situation afresh – as if you were starting today. Ask yourself: knowing what I know now, would I continue investing money or energy into this? If no, pull out regardless of prior effort.
Judge each decision independently going forward. Sunk costs belong in the past.
4. The Crucial Difference Between Assets and Liabilities
Robert Kiyosaki’s “Rich Dad Poor Dad” draws a simple but profound distinction – assets put money INTO your pockets, liabilities take money OUT of your pockets. To get rich, acquire more assets.
This made me view every purchase through the asset vs liability lens – is this purchase going to make or cost me money in the long run? A long term asset portfolio funds your lifestyle without requiring much effort to upkeep. Differentiate speculative bets from reliable income streams.
5. Automate Your Money Moves – Willpower Always Fails
If you want good things to happen consistently with money over the long term – investing, saving, budgeting, bill payments – make it robotically automatic. Our psychology can rarely stick to manual financial habits for too long.
Set and forget removes emotional resistance and lapses in willpower over time. Automation works for achieving any long term goal – whether health, relationships or finance. Enable your future success on autopilot.
6. Understand the Real Cost of Getting Rich
We all want financial independence and businesses success quickly. But this high pace lifestyle carries a steep price tag hidden behind the glamor – one people often overlook before jumping in.
Becoming an ultra successful entrepreneur or businessperson requires tremendous sacrifice similar to excelling professionally in sports, music or medicine. Expect to exchange time with family and friends for 80 hour work weeks. Be prepared for arguments with loved ones over your absence. Diet and exercise discipline become requirements given immense mental demands.
Understand true costs before pursuing any massive goal – the higher the target, the larger the unseen price. Getting rich young through business ownership is possible but requires disproportionate energy and singular focus for sustaining high performance over years. Innate passion for the work is key – the sacrifice only seems worth it for something you inherently enjoy.
Ask honestly – are you willing to pay the high price chasing big wealth? Different goals need different effort budgets. Match expenditures of time to the correct ambitions.
7. Wealth in Old Age Defeats the Purpose
Bestselling finance books often promote saving small amounts consistently over 40+ years for retirement. While mathematically sound, I felt unsatisfied reading this well-intentioned advice to enjoy money later in life. What’s the point of being rich when elderly? Why have assets to travel the world if your body can’t handle long flights or multi-city itineraries? I wanted financial freedom before my youth slipped away.
MJ DeMarco’s book “The Millionaire Fastlane” resonated with me deeply. He advocates building assets young – in your 20s and 30s – via business ventures, investments, intellectual property instead of locking money away for decades in traditional retirement funds. Catching this financial break early lets you enjoy peak health AND wealth simultaneously.
Yes, it may take 10 years instead of 40 to see the money, but 10 years goes by quickly when intensely focused on a single mission. And you reclaim freedom for the majority of life away from mandatory work. Even Warren Buffet generated over 90% of his current $100+ billion wealth AFTER crossing 50 – by starting young, compounding kicked in later.
There are many valid ways to pursue wealth – choose the path aligned with when you want to live life to the fullest.
8. Thinking Small Guarantees Small Outcomes
As David Schwartz wrote – “The size of your success is determined by the size of your belief.” Big thinkers see opportunities where small thinkers see impenetrable barriers holding them back from their own potential.
Thinking big opens yourself to possibility and pulls people towards you for support achieving outsized goals. Reframe circumstances positively. Ask – how CAN I make this work? Rather than focus on insurmountable obstacles in the way.
9. Money = Your Life Energy
Author Vicki Robin’s brilliant insight – “Money = Life Energy.” We drain irreplaceable hours of living in exchange for money. Yet most squander hard-earned life energy thoughtlessly without considering personal fulfillment gained per dollar.
After learning this, purchases required much more consideration for me. I visualized prices tags in literal hours worked – is that new $800 phone worth 1 entire month of life force energy from my tedious job? These mental calculations made me highly selective with how I allocated my working time towards items.
Think beyond dollars to meaning behind money. Calculate your real hourly wage – factor in costs of keeping your job like transportation, clothes, etc. How much life is each hour worth to you? Make sure you spend income only on priorities that energize you. Don’t fritter away life for meaningless stuff.
Summary – Money’s True Purpose
When I began reading finance books years ago, making more money was the end goal. But curiously, as income grew to surpass my original targets, I realized money itself was no longer the main prize. Money simply freed up time for self-improvement.
In working relentlessly towards wealth, new priorities replaced money – like building better daily habits for increased energy, learning to manage stress through meditation, evolving social skills by meeting new mentors and business partners. Trying to earn more inevitably led to becoming a better person. Money’s purpose ultimately is improving the quality of YOUR internal life.
The journey of chasing external wealth ironically made me wealthy where it matters most – joy, relationships, purpose, habits, stillness. This internal prosperity persists independent of money coming and going.
I hope these 10 key lessons also challenge you to rethink assumptions about finances and life’s true meaning. Initial motivation is almost always monetary – but stay open to how your priorities transform through the process.
