Date added to “All Time Favorite” list: 2019
I’ve added this book to my all-time favorites, not for my benefit, but for the potential benefit of anyone with a low financial IQ. It’s not a subject taught in school. In fact, it’s conspicuously and totally ignored yet enormously important. Unlike Covid, a lack of basic financial education is a true worldwide pandemic.
This book should be read when you’re 15 years old and every 5 years thereafter until you’re a millionaire. It’s not a book about specific ways to become rich, it’s about the mindset, the foundations to financial freedom.
Keep this in mind: a professional (ie a job) covers expenses while a business builds wealth.
Key point: The poor and the middle-class work for money. The rich have money work for them.
The author of this book created probably the best board game of all time: Cashflow
Throughout my life, I was often ridiculed for not wanting to tip the automatic 20% to waiters when the service was mediocre. I prefer to tip based on service level. This book finally gave me some ammo for my actions with the following passage. “What I find funny is that so many poor and middle-class people insist on tipping restaurant help 15 to 20 percent, even for bad service, but complain about paying a broker three to seven percent. They enjoy tipping people;e in the expense column and stiffing people in the asset column. That is not financially intelligent.”
Here’s another enlightening passage highlighting the general lack of financial intelligence in society: “Consumers will always be poor. When the supermarket has a sale, say on toilet paper, the consumer runs in and stocks up. But when the housing or stock market has a sale, most often called a crash or correction, the same consumer often runs away from it. When the supermarket raises its prices, the consumer shops somewhere else. But when the housing or the stock market raise their prices, the same consumer often rushes in and starts buying.”
Financial intelligence leads to wealth:
Other noteworthy quotes:
One of my favorite quotes comes in the supplemental section at the end relating to a different book: “When criticized for making 1,014 mistakes before creating the electric lightbulb, Thomas Edison said, “I did not fail 1,014 times. I successfully found out what did not work 1,014 times.”