Master Your Money and Life: Top Tips from Amazon’s Bestsellers

Instead of discussing the Holy Grail of Wealth Freedom, this article summarizes the key messages from several reputable authors of Amazon’s investment bestsellers, providing us with a more stable concept of financial management and the path to financial freedom.

The Total Money Makeover: A Proven Plan for Financial Fitness

• Author: Dave Ramsey
• Link: Amazon

This book provides 7 simple steps to reverse your financial decline. Through these methods, you can regain a financially secure life and start planning for the future, moving towards a comfortable and meaningful life and retirement.

Fact: The typical millionaire lives in a middle-class home, drives a car that's paid off and is at least two years old, and buys jeans at Wal-Mart.

The most important point of this book is: learn to live your own life. You may feel that people around you are doing better than you, leading to low self-esteem, jealousy, and nervousness, which can easily cause many misjudgments in your decision-making. But in fact, most people actually "look" better than they really are. Debt and leverage have created this situation, but these are definitely not without risks. You can't understand everyone's true situation, but you don't need to. Don't judge yourself by comparison. Don't compare with others, just compare with yourself!

In addition, it must be emphasized that many people now advocate borrowing money for investment, but in fact, there will be some survivor bias. Compared with the huge risk, it is more appropriate to repay large debts as soon as possible and shorten the loan time as much as possible.

Keynotes

1. Your financial situation is not as good as you thought, what should you do?
2. Debt exists in life for granted; we must understand the limitations and risks it brings.
3. Step 1: Prepare emergency reserves.
4. Step 2: Start trying to repay the debt in one go from small to large.
5. Step 3: Expand emergency reserves.
6. Step 4: Use 15% of income to invest, for example, in funds.
7. Step 5: If you have children, plan the cost of raising them to college and how to prevent them from being in debt.
8. Step 6: Find a way to repay the biggest debt as soon as possible.
9. Step 7: Follow your own plan and use your wealth appropriately.

Money: Master the Game: 7 Simple Steps to Financial Freedom

• Author: Tony Robbins
• Link: Amazon

As long as you work hard, are willing to save, and follow discipline, even if you start slowly, everyone can achieve wealth freedom. Find ways to diversify risks, diversify investments, seek advice from trustworthy people, prepare appropriate hedging methods, and respond to different market cycles.

It mentions a way to diversify investment: divide your funds into three buckets,

1. Security bucket: The most conservative investment, capital preservation, such as bonds.
2. Growth bucket: More risk, more rate of return, such as the stock market.
3. Dream bucket: Put part of the income from other investments into the Dream bucket and try the life you want to experience more!

If you want to change your life, you have to change your strategy, you have to change your story, and you have to change your state.

Most importantly, your goal is to live the life you want, not just to have large savings. If you do not configure the Dream bucket, your savings and investment will become meaningless. The most important thing is to exchange money for meaningful and valuable experiences and to continue to grow!

Keynotes

1. Don't underestimate the power of compound interest.
2. Even if there is only a small amount of money, it is still necessary to invest continuously and periodically.
3. Do your homework before investing in all projects!
4. Set your goals first, and then think about how to invest.
5. The road to wealth and freedom is very long, take your time, time will always be your powerful friend.
6. Diversify investment projects and try to maintain balance.
7. Seek advice from reliable and experienced investors, and make sure that you are prepared to avoid risks and respond to market changes at any time.

The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness

• Author: Morgan Housel
• Link: Amazon

In the real world, people’s financial decisions are always more irrational than expected. Many decisions, such as when you are about to go bankrupt, betting a lot on lotteries, using leveraged gambling, etc., are very irrational, but for the individual, this action seems to make some sense. The same is true for investment. People's investments are usually influenced by their own life experiences and personality, rather than a calm analysis of the market situation. For example, those who have experienced financial turmoil and those who have been stable and long-term as soon as they entered the market have very different investment strategies and ideas. The total decision actually involves many psychological factors.

Not all success is due to hard work, and not all poverty is due to laziness. Keep this in mind when judging people, including yourself.

We should learn to understand the fact that success requires luck and learn to fear losing what we already have, and manage risks. Don't be greedy; not only did you not make a small amount of money but instead lost the cost of survival.

Life isn't any fun without a sense of enough. Happiness, as it's said, is just results minus expectations.

So, how to maintain the original wealth? History tells us that people who can survive in the market for a long time have one thing in common: fear, which prevents them from being eliminated by the market. When you learn to be afraid of losing what you already have, you will have a different perspective and may have the opportunity to make better decisions.

Failure is inevitable. From another perspective, failure is the only way to success. Accept it. Every small failure will lay the foundation for more success. Every small success will enable you to bear greater failure.

Keynotes

1. Everyone has their own experience of the market and money.
2. Personal experience affects financial decisions.
3. The economic concepts we currently use are still very immature.
4. The proportion of luck to financial success is much higher than you think.
5. Rather than sticking to a specific case, try more broad and diversified methods to get more possibilities.
6. Jealousy makes you reckless.
7. It is easier to accumulate wealth than to maintain wealth.
8. You may be wrong half of your time and decision-making, but you can still accumulate wealth.

Conclusion

In fact, there are many books on the market related to money, financial management, and investment. This time I chose these three books to share mainly because the concepts of these three books are relatively solid and stable, suitable for most of us "ordinary people." Many concepts you may have heard, for example, prepare emergency reserves, the power of compound interest, do not use leveraged investment, etc. But the market opportunities are unlimited, and now there is so much flooding information on the Internet, it is easy to cause FOMO (Fear Of Missing Out), deep fear of not keeping up with the trends, suddenly entering the market, and even borrowing money to invest in high-risk projects. The market is indeed endless, and many masters can indeed seize these opportunities. But for ordinary people, it is perhaps most important to lay a solid foundation, build the foundation for a better life, and then seek better opportunities.