Top 3 Books to Start Your Personal Finance Journey

This is walk toward episode 16 My name is John Mendez and I am your host. Welcome to walk 12 Where I motivate and inspire people new to the world of personal finance by letting you all in behind the scenes of someone who's still on his way. So in today's episode, we're gonna be talking about my top three favorite books, why they're my favorite books, where I was at when I read them, how they helped me, and pretty much why you should read them. Especially if you're going to be on this journey to, you know, walking to wealth. As you know, I say all the time. Um, sort of my very first book I'd recommend, honestly, is Rich Dad, Poor Dad. And now I know that a lot of people know they've read this book and they say it's overrated. And no, for my personal opinion. I really think this book is crucial to everyone just starting off on a journey, because it shifts your perspective on a lot of things in a way that's so simple to understand that you know, anyone can pick it up. And like even if you're starting off very early, like in middle school, there's a rich dad poor dad, for teens, I believe it's about it's like pretty much anyone can pick up this book, either the teen version, or the regular version. It's also not too long of a read. Now, Rich Dad, Poor Dad, this was around November ish of 2020 When I first picked their Rich Dad, Poor Dad, along with three other books, were going to other books. And Rich Dad, Poor Dad, honestly, I don't really know why at the time I picked it up. All I know is that at that time, I've already started kind of investing this before I started watching YouTube videos and you know, personal personal development, personal finance, all that jazz. And Rich Dad, Poor Dad was the first book I read, I probably was recommended to me on like social media, you know, there's something my three main takeaways from this book was, what is an asset versus what is the liability, the Cashflow Quadrant, and that the rich don't work for money. So let's hop into the first one, right? What is the asset versus what is a liability. And pretty much the definition I got from that book is an asset is something that puts money in your pocket. And a liability is something that takes money out. And a lot of people have the game confused, right, they get you know, they suddenly get a little bit more money, they start getting, you know, a more up and life and then you know, they'll buy a primary residence. And yes, that's technically an asset by, you know, your regular dictionary definition. But your housing is usually your biggest expense, you have to pay off the mortgage, or even if you're renting, you have to pay off rent, mortgage utilities, something breaks, things like that, unless you are like house hacking, or doing one of those strategies, you know, where you live in it for some time and rent it out when your time you're not living in it, some type of like strategy like that. Just banking on appreciation does not make your house and investment. Right. So a lot of people were buying houses, because you know, houses tend to go up in value, but they don't realize that they're spending a lot of money. Right. So not saying that buying a home is a bad investment. I'm just saying that you should treat your personal your primary residence as if it were an investment before buying whatever you're buying, right. And so, another thing that people like to flex about is cars, people get brand new cars all the time and say that brand new car the first three years, it's probably going to appreciate at least half right? Or at least a large percentage is going to depreciate within that first three years to use in your car. As soon as it dries off the lot. It's already depreciated. Right? So you're getting a brand new car, it looks nice, it looks nice, you take some photos first, you know social media get a bunch of likes a bunch of congratulations. But then you got to gas right you guys, your your car payment, you got a brand new car, so you know your insurance might be a little bit higher. This is a newer car, you got to pay to the maintenance, you gotta pay all these other things, right? A lot of people are buying these things that they would consider assets. But it's like most of these things don't appreciate in value. And if they do, they're, you know, the expenses that you're paying doesn't justify the appreciation more often not. So, you have to think of everything from like the very simple standpoint as does this put money in my pocket, or does this not and If it does, it's an acid. If it's not, it's a liability. And you have to call it as such. Right. So that's the first one. The second one is the Cashflow Quadrant, the quiet the Cashflow Quadrant, I pretty much is, you know, four boxes, right? If you could picture this with me, the top left, I believe is employed the majority of the population, right pretty much everyone that has a W two paying job, right, that's what employed is, on the bottom left is a little bit of a smaller percentage. And that's self employed, you know, people who have their own businesses, you know, have their own side hustles whether it be hair, Taro business, cut, you know, barber shop, or things like that, you know, your little own foods, but that's your self employed people, they usually start their own businesses up in another self employed people are successful, but you're working for money, you're trading your time for money, which is always a losing trade, because time is worthless. So time isn't valuable, where money, you can get it back. That's what I meant to say. And so the top right. And, you know, the employed people and and self employed people make up 95% of the population. Right? And the entire population entire, no, top right quadrant is, you know, that your business owners, these are people like, you know, Steve Jobs when he was alive, you know, Bill Gates, Jeff Bezos, all those people, right, Elon Musk, those guys are business owners. Right. And then the bottom right quadrant, is investors. This is where people, usually when you're a business owner, you have a physical capital working for you. So people, you know, in, you know, factories, things like that, you're not essentially working for your money, you have people in machines and stuff in place to do that all for you. The bottom right is the investor quadrant, right. And this way, you know, people like who do trading, Forex, crypto, things like that. These this right hand side, is, you know, what they call it the 5%. And the 5% make up 95% of the world's entire wealth, right? That small percentage of people make up pretty much all the wealth in the world. And it's because those people aren't trading their time for money. They're either trading their money for more money. And that's where you get, you know, your cash on cash, return your return on investment, or they're trading people for money for the most part, and not in like a, like a trafficking way. But you know, I have someone work for me get the job done, I get paid, we don't ever have to worry. And that's, you know, the 5% of people that make up the 95% of the wealth. And you want to notice that they've been really wealthy, find a way to first to shift from the left side, to the right side. And you could do that in many ways, right? There's this quote that I, you know, I seen on Facebook one time, and it was, use your nine to five, to find your six to 10. And then use the six attend to eventually replace the nine to five, and then use that to find your perfect life. Right. So in your free time, whenever you have free time, if you do have a W two job, or if you are self employed, find ways to make money without you having to physically or mentally really work. For the most part. There's so many ways to go about doing that, you know, one of the main ways that people do it is trading, you know, or investing in real estate. The things like that give you better return on your investment. Because your money can work 24/7 Money doesn't stop working for anyone, your money is always constantly moving for the most part, and never stops. Us On the other hand is people we can only work so long before we get tired. And we have to take you know, drink tea and coffee and Red Bulls and espresso shots and stuff. We're not function like we're not capable of working that long where money can write. And so that's the Cashflow Quadrant. And then the last main takeaway that I got is that the rich don't work for money, which I kind of touched on. Once you realize that the rich don't work for money. You start asking yourself, you know, what are you doing with your time? Where is your time best spent? You have to spend your time and we talked about in last episode and the 8020 principle, you have to spend your time in the 20%. Right, because it's 20% of the things you do usually leads to 80% of the outcomes that you're looking for. Right so instead of doing for example, let's say you have a business and In a consulting business, the 20% will be setting appointments with people and doing your consultations to help them out whatever your busy work would be, you know, setting up fliers, you know, or making your website. It's things like that that are necessary, but aren't important. Like, yes, you need to have a nice website. Yes, you know, you need to market and have nice fliers and designs and blah, blah, blah. But that's not actually making you any money making you money is talking to people, right. So you have to learn that your time is extremely valuable. And so whatever you're spending your time on, that return on investment has to be worth it. And if it's not worth it to you, you have to outsource that, you have to get rid of the ego that you know wants to be a one man band, do everything on your own. And put that aside so that you can outsource and better spend your time in other areas that will give you a better return on your investment. Now that book to me, that netbook Spark, then it changes shift my entire mindset just enough, because at that time, you know, I didn't really know anything about personal finance or anything like that. But it shifted my mindset enough, just enough to think that, oh, shoot, I can really teach myself something that school has never taught me before. And I were just sitting there wondering, like, I haven't actually read a book that will teach me something practical to actually apply it to my real life. And so long, that I honestly didn't never like reading prior to that. In elementary school, I like reading. But then afterwards, I didn't like I haven't liked the book since then I've read that book. And it's like, I really like that one, reading is fun, until I can teach myself so much more than schools teaching me about things that actually matter in life. That, you know, keeps, I'm gonna keep reading books. And that pretty much what sparked my my journey into personal finance. And that will call me on this journey that I'm on now, for the most part is reading that book. And although it wasn't the world's greatest book in history, but, you know, it shifted my perspective, just enough at a point in my life where I needed it. In order to get me, you know, get the ball rolling. The next book that I say, it's in my top three that you should read. And just so happened to also be my second book, or, you know, I pick, I had a good eye for books, I guess. And it's, I Will Teach You To Be Rich by Ramit Sethi. That book was probably the most practical, the most like, applicable, you know, things that you could do, literally, as soon as you finish reading a chapter book that I ever read ever. My three main takeaways from this book, for the most part, were they taught me about the different type of bank accounts and different banks that I should look into Itami introduced me to credit cards, and different ones that I should use. And it also taught me about index funds a little bit. And it was just enough to lead me into the next book that I read, which is index one for dummies. But that book is not on our list for today. So let's get into the first one, you know, different types of bank accounts. And I kind of mentioned this in one of my past episodes. You know, I grew up in a family that use Bank of America, just because there was a big bank. And they had people there that were bilingual, and it was around the corner. And that was as much research as they did. There's no other, you know, none, no other, you know, piece of planning went into choosing Bank of America. And so I had Bank of America as my first personal checking and savings accounts. I also had them as my first personal credit card. And Bank of America, for the most part was fine. And then, you know, I started looking into some of the Malpaso they do, which I'm not going to get into. But after reading that book, you know, it really made me reconsider, like, you know, why am I using Bank of America and then I don't know about Wells Fargo. I never use Wells Fargo. But if you look up, I think they have a documentary still on Netflix, about Wells Fargo and what they did. And, you know, back like 10 years ago, they were doing some really shady business. Nevertheless, I learned that the biggest banks aren't always the best banks. So that book introduced me to my two favorite bank accounts, which I use are my Charles Schwab account and my ally bank account. And it pretty much goes into depth about you know, different counties you should do or know another runner up that was up there was the Capital One 360 savings account, which actually helped my friend get one and her mom and grandma as well. So that it's really good savings account. I believe it's online only if I'm not mistaken. But um, it pretty much lays out to you all the different champions and accounts that you should have or banks that you should use or consider He goes into depth as to the bank accounts that he has specifically. And he also tells you which ones he has. And he tells you why use them. No for me, ended up with Chase and Ally Bank Chase, the personal, you know, customer service is amazing. It's also online only, which is something that I was looking for very user friendly, easy to use. Also sounds super fancy Ally Bank was added, it's technically considered a high interest savings account. And what that means is that you're making more than you would at a bigger bank, for the most part, that's all that means. High interest, you're getting probably like, point 4.5, maybe point 6% in interest, which is not anywhere near close to inflation. But it's like 10x, or 50x, where you would get at a Bank of America, or I think Bank of America, Bank of America offers like point 01. So a point five, you know, that's 50x better. One of the chapters later on in a book then talked about credit cards, you mentioned the one that he uses. And I remember the only one I remember reading from that book was the Chase Sapphire Preferred card. And it was so funny, because when I apply for the chase, Sapphire Preferred card, first time around, I got denied. And I also call the reconsideration line. And they still denied me. And it was because at that time that I had applied, I didn't have any other like credit cards that had a similar balance to what the Chase Sapphire Preferred starts off with, which is $5,000. But you know, it talks about Chase and why you should do Chase, he mentioned that he has, I believe he has the AMEX platinum card as well. And he started talking about the benefits of using points and traveling. And you will have been able to go on vacation and paying for everything for free. For the most part, it doesn't go too in depth about these, you know these topics, but it tells you just enough, where you can go and get it and it doesn't overwhelm you. Because we didn't when you get overwhelmed, you tend to not start at all. So that was a really, really insightful chapter because I got hooked instantly, like the idea of traveling, having you know, status at different places are getting lounge access and treated better just for having credit cards and points and all that jazz, I never really got me going, I think at that point in time was around December of 2020. And I just started, you know, I hit the ground running and watch like every YouTube video known to man on credit cards and, and chase cars and when I should get and that pretty much sparked my journey into like the points and Miles game. And now I'm sitting on almost a 280,000 points. And it's only been like, I'm approaching like a year and a half now almost two years since I really got into an appointment mouse game, and I was able to rack up a bunch of points very easily. And then the next chapter that taught me It talked about was the index funds. And why I love index funds so much if you didn't listen to my last, one of my prior episodes is because you can put your money into an index fund, and then diversifies it into a bunch of other stocks, like some index funds can have upwards of you know, 3000 stocks, you know, if you took the time to actually research these companies, 3000 of them, you'll be stuck for probably six months, maybe nine months, depending on how much time you put in each day, you not only that, but you probably will get overwhelmed and never end up investing. And so the great part about index funds, they have different type of index funds for different types of investments. So um, you can do a one that tracks the s&p 500, you can do one that tracks the entire market, you can do one for international markets, you can do one for a real estate investment trust, you can do one for bonds, you couldn't have pretty much an index one, for pretty much anything for the most part. There's a whole bunch of different index funds, some riskier than others. You can also have mutual funds as well, which is actively managed, whereas index funds is usually more algorithmic, algorithmic, and like computer based and pretty sure, and so you save an add on fees, you might get less return. But only 5% of anyone who invest does better than the s&p average of seven to 8%. Year over year, over a long course of time. So for me, I'd rather just save my time and put my money into index one, and have that, you know, work in the background when I'm chilling, and I don't have you ever worry about it. I just contribute as weakly or as often as I can. And so that's the power of index funds. And sometimes those index funds and doing great sometimes they go down, but they end up usually being a lot less volatile than if you were trading an individual stock or if you were doing something like crypto. So you also have to know how risk adverse you are. If you're someone that doesn't do too well risk. index funds might be the best option for you, honestly, or maybe bonds or do an index fund of bonds. You know, if you're someone that does handle risk, you know very well, you should maybe look into, you know, doing day trading, because you can do a lot more return. And it's a lot more risky than you can also lose all of it. But it's also a great way to make a lot of money. Keep in mind that I am not legally allowed to give financial advice. With that being said, you should look into index funds, especially if you're just getting started. Because it's simple, it's easy to grasp the concept, and it can get you started sooner rather than later. The next book on the list of books that you definitely should read is thinking Grow Rich by Napoleon Hill. And this book has my full endorsement. This book is the best book I've ever read, it's like gold, every single page, every time you turn to pages, like another gem has been dropped. There's not a bad chapter in this book from front to back. This was an amazing book, around this time, where when I picked this book up was in February of 2021. So I'm December 2020, I stop working behind the wheel just because like gaslow for the wintertime. And it's also in between my third and fourth semester of college pandemic was going on. So I really wasn't looking for a job once in a while. Pretty much it didn't lay me off, but was like, Hey, we don't really need you to the summer season again, when it gets busy again. And so I was pretty much living off my savings, my savings were depleting. And you know, my money was going down. That month of January was the month after I got my very first Chase Card. And I almost maxed that card out, I think it was like 30 cent like 70 cents away or something like that, from maxing it out. And so I ended up paying for it just because I had enough savings. But at that point in time, things were going downhill. And to start off the month of February, I applied for the Chase Sapphire Preferred card, and I got denied. So it's like things were kind of going on a downward spiral a little bit slightly, although I was reading a lot more and you know, I was getting a lot more knowledge, also to I tried to get into wholesaling and pretty much an attorney shot me down. And so like at that point of time, I had a couple of like, left turns right and right after another like boom, boom, boom, boom, boom. And I picked up this book, and this book pretty much changed everything got the wheels, rolling evilly, you know, you know, I thought Rich Dad Poor Dad sparked the change. But this book is sparked a crazy amount of change. My three takeaways from this book are going to be very unique. Instead of like having like a set takeaway, I'm gonna read you some things in the book that really stuck with me. And the first one comes from the chapter on desires. And it's a poem, it goes something along the lines of I bargain with life for a penny, and life would pay no more. However, I begged that evening, when I counted my scanty store for life is just the employer, he gives you what you ask. But once you have set the wages, why you must bear the task. I worked for a menials hire, only to learn this made that any wage I had asked if life, life would have willingly paid. And so pretty much what this quote This poem is saying is that he came into life not having anything, just a penny, and, you know, things weren't going his way he couldn't get any more than just a penny. And that life is an employee. And they gives you what you asked, but pretty much when you ask for something, you have to be willing to do the work that comes with it. You can't just ask for success, not be willing to put the hours in to go to sleepless nights to sacrifice the parties and things and you know, you have to do the task, once you ask for something that you want. And then he at the end, he comes to the realization that pretty much anything that you ask for life you'll get. There's no one stopping you from getting to where you want to get. So just ask and do the work that comes with asking. And then you'll get whatever you want to get. There's no one stopping you. There's no system, there's no forces, whatever it's like, yeah, all the only force, it's in your ways yourself. And if you act like for a million dollars a year, it'll give you a million dollars a year. If you act like for a billion dollars a year give you a billion dollars a year, make sure you just do the work that comes along with it. The second thing that I want to read for you guys is the self confidence formula. Now I'm I have a lot of confidence in myself. But I read this because it really opened my mind right. And I would read this literally every single morning when I woke up and every night before I go to sleep for probably like 12 months straight or maybe like 10 months free. And so it goes along something along lines of this. Rule number one is I know that I have the ability to achieve the object of my definite purpose in life. Therefore I demand of myself personally isn't continuous action towards its attainment, and I here now promise to take such action. Number two, I've realized that dominating thoughts of my mind will eventually reproduce themselves in outward physical action and gradually transformed themselves into physical reality. Therefore, I will concentrate my thoughts are 30 minutes daily upon a task of thinking of the person I intend to become, thereby creating in my mind a clear mental picture of that person. Three, I know that I know through the principle of auto suggestion that any desire or persistently holding my mind will eventually seek expression through some practical means of attaining the object. Therefore, I will devote 10 minutes daily to the meaning of myself the development of self confidence, for I have clearly written down a description of my definite chief aim in life, I will never stop trying until I have developed sufficient self confidence for entertainment. Five, I fully realized that no wealth or position can long endure unless built upon truth and justice, therefore, I will engage in no transaction does not benefit or woman its effects, I will succeed by attracting to myself the forces I wish to use, and the cooperation of other people. I will induce others to serve me, because of my willingness to serve others, I will eliminate hatred, envy, jealousy, selfishness, and cynicism, by developing for all humanity. Because I know that a negative attitude towards others can never bring me success, I will cause others to believe in me, because I will believe in them. And then myself, I will assign my name to this formula, committed to memory and repeat it aloud. Once a day with full faith, that it will gradually influence my thoughts and actions, so that I will become self reliant, and successful person. Now, I pretty much used to read that, as I said, twice a day everyday to myself. And I got to the point where actually memorize this, and I haven't been reading it anymore, but I need to definitely start reading it again. And the last part that I want to read for you guys, is the idea of specialized knowledge, right? In order to get to where you want to get and achieve the major purpose in life that you want to achieve. You have to have specialized knowledge in that field. And here are five ways I'll give you six to learn more. So you can learn from one's experience or in education. You can learn from experience and education available through cooperation of others. You can learn from college and universities, you can learn from public libraries, you can learn from special training courses, you can learn from Google. And I'll give you another one. You could also learn from YouTube as well. And I'll give you another one, podcast, audio, Audible, you know, audiobooks, things like that. events, conferences, seminars, there's so many different ways to learn and successful people in all callings, never stop acquiring specialized knowledge related to their major purpose business or profession. Right and those who are not successful, usually make the mistake of believing that the knowledge acquiring period and so when they finish school to whether that's University, post grad, high school, middle school, wherever it may be, I think that after you finish your last year of formal education, learning ceases, right? The truth is that schooling does little more than point one in the direction of how to acquire practical knowledge. So then it's pretty much up to you to learn and go actively learn everything that you need to learn so that you can become successful and achieve that purpose that you have in life. These books are these three books are my favorite books easily all time. They're each less than 20 books, you can access them anywhere. Audible YouTube, vine to novels, wherever you buy books, everywhere you can. There's unlimited access to these books and these books. So go go out there and pick one up. Thank you guys for tuning into today's episode. Again. I'm your host, John Mendez. You can find me at John Mendez underscore realtor and at walk to wealth on Instagram. Please make sure to subscribe and leave a review if you're loving the podcast so far. New episodes are released every Sunday. I look forward to seeing you guys on the next episode. Take care