Get Rich Reading: 4 Books That Will Change Your Relationship with Money

 

Get Rich Reading: 4 Books That Will Change Your Relationship with Money

Index

• 1. 1000 ways to make one thousand dollars by F.C Minaka
• 2. The Intelligent Investor Summary (BY BENJAMIN GRAHAM)
• 3. Think And Grow Rich Summary (BY NAPOLEON HILL)
• 4. The Psychology Of Money (BY MORGAN HOUSEL)

Get Rich Reading: 4 Books That Will Revolutionize Your Money Mindset

Tired of feeling stuck in a financial rut? This isn’t your typical “get rich quick” scheme. “Get Rich Reading” explores four transformative books that will completely change the way you view and manage your money.

We’ll dive into:

Happy Money: Discover timeless wisdom that goes beyond just building wealth. Learn how to cultivate a healthy and fulfilling relationship with money that can improve your entire life.

The Intelligent Investor (Summary by Benjamin Graham): Gain valuable insights from the “father of value investing” and learn strategies for making sound investment decisions for the long term. This is a summary of the classic text, making it accessible to busy readers.

Think and Grow Rich (Summary by Napoleon Hill): Explore the power of mindset and develop a success mentality that extends far beyond just financial goals. This summary condenses the core principles of this influential book.

The Psychology of Money: Uncover the surprising psychology behind our financial decisions. Learn how to overcome emotional biases and make smarter choices with your money.

“Get Rich Reading” is your gateway to financial literacy and a more empowered relationship with your money. Start reading, start thinking differently, and start building the financial future you deserve!

1. 1000 ways to make one thousand dollars by F.C Minakar

1000 ways to make one thousand dollars by F.C Minakar

1000 Ways to Make One Thousand Dollars by F.C. Minakar is a timeless masterpiece, first published in 1936. It offers invaluable advice for aspiring entrepreneurs and those looking to earn additional income through various creative and unconventional methods. This book demonstrates that the principles of entrepreneurship and wealth creation remain relevant across generations. It is a treasure trove of ideas, helping individuals from diverse backgrounds and skill levels discover practical ways to make money, whether by selling handmade crafts or starting a small business. Minakar’s engaging writing style makes complex concepts easy to understand, making the book accessible to readers of all ages.

The book’s longevity is a testament to its enduring relevance, continuing to inspire entrepreneurs today. It serves as an essential resource for anyone eager to start a new venture or generate extra cash. The book is organized into 21 chapters, each focusing on different strategies for making money. These strategies range from simple, low-cost ideas like selling flowers or pet sitting, to more ambitious endeavors such as starting a small manufacturing business or investing in real estate. Minakar’s optimistic tone encourages readers to take control of their financial future, emphasizing the importance of having a positive attitude, being willing to take risks, and staying disciplined and consistent in their efforts.

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A central theme in the book is the importance of identifying and leveraging one’s unique strengths and talents. Minakar encourages readers to think creatively and consider their skills, passions, and experiences when exploring potential money-making ventures. He also highlights the importance of market research and understanding the target audience. By identifying unmet needs or underserved markets, readers can develop products or services that meet demand and generate significant income. Throughout the book, Minakar provides numerous examples and case studies of individuals who successfully implemented the strategies he outlines, offering practical tips for overcoming common challenges like getting started, attracting customers, and managing finances.

Minakar also addresses common concerns such as a lack of time, resources, or experience. He offers practical solutions like outsourcing tasks, leveraging online platforms, and seeking mentors or partners. Overall, 1000 Ways to Make One Thousand Dollars remains a valuable resource for anyone looking to improve their financial situation. While some ideas in the book may be outdated, the underlying principles and advice are still highly relevant. The book may lack detailed guidance on turning a money-making idea into a sustainable business, and it may not fully address the emotional challenges of starting a new venture, such as fear and self-doubt. However, it remains an inspiring resource for anyone seeking to create new opportunities.

The book includes several illustrative stories, from which readers can draw valuable lessons. Below are summaries of the first seven chapters:

Chapter 1: How to Start Your Own Business

If you want to be an entrepreneur, start your business now — there’s no better time. Don’t wait for perfect conditions. Obstacles will arise, but determination is key. Otto Schneering, at 21, decided to venture into candy making. Initially, his products didn’t sell because he made what he liked, not what the market wanted. Learning from this, Otto focused on popular candy types — chocolate, caramel, and peanut candies. After three years, he created the successful Baby Ruth candy bar, beloved by both children and adults.

Chapter 2: Raising Things to Sell

Consider turning your hobbies into a business. You might have a skill or passion that can be profitable. Mrs. Smith, a widow from Brooklyn, loved baking. Her homemade doughnuts, pies, and cookies became highly sought after for parties and special events. With dedication and practice, her food specialty business flourished, making her the go-to person for quality baked goods in her community.

Chapter 3: Storekeeping as a Business

Starting a store means identifying unmet needs in your community and finding a location near your target market. Ralph Watkins opened a pet store and focused on educating children and their parents about pet care. His personal touch and community engagement led to rapid growth. In three years, Watkins expanded his store to include 120 varieties of fish and 130 tanks, earning significant annual income.

Chapter 4: Promoting a Small Business

Building strong customer relationships is crucial, but promotions and advertisements are also important. John Harding, a restaurant owner, created a memorable advertisement featuring a laughing pig and a champagne glass. This creative marketing strategy attracted customers and allowed Harding to expand his business to six restaurants, proving that innovative promotion can drive business success.

Chapter 5: Selling Things by Mail

A successful mail-order business starts with identifying target clients and building a comprehensive mailing list. Henry Field, initially a traveling seed seller, transitioned to mail order by maintaining a personal and friendly tone in his sales letters. His approach built trust and expanded his business from selling seeds to general merchandise, demonstrating the power of personalized customer engagement.

Chapter 6: Selling Your Services

Identify what you do best and specialize in it to eliminate competition and add value for customers. A dressmaker found success by catering to women with unique body types, offering personalized clothing suggestions and building a loyal customer base. By providing quality service and meeting specific needs, she gained trust and numerous referrals, illustrating the importance of niche specialization.

Chapter 7: Paying for a College Education

Part-time jobs during college can build character and teach the value of money. A Washington University student supported himself by offering car polishing services on weekends. His initiative and politeness earned him customers like Mr. Huntley, who admired the student’s ambition. This story highlights how early work experiences can shape future success and build important life skills.

Conclusion

In conclusion, starting a business requires determination and initiative. Regardless of your circumstances — whether you’re young, widowed, divorced, or unemployed — you can start your own venture and earn money. The key is to take action and work hard. Famous entrepreneurs achieved success by persisting through challenges. The book reinforces that there are countless ways to earn money, and with the right mindset and effort, success is within reach. As the saying goes, “Winners never quit, and quitters never win.”

1000 Ways to Make One Thousand Dollars is a timeless guide that provides a roadmap for success, offering adaptable and customizable strategies to suit each reader’s unique strengths and circumstances.

2. THE INTELLIGENT INVESTOR SUMMARY (BY BENJAMIN GRAHAM)

THE INTELLIGENT INVESTOR SUMMARY (BY BENJAMIN GRAHAM)

Investing successfully doesn’t hinge on having an exceptionally high IQ, insider knowledge, or pure luck. Instead, it requires a solid intellectual framework for decision-making and the ability to keep emotions from undermining it. In “The Intelligent Investor,” Benjamin Graham offers such a framework, coupled with logic to help control emotional impulses. His investing strategy has been among the most successful over the past century, as evidenced not only by Graham’s own impressive track record but also by the accomplishments of his many disciples. One of the most notable among them is Warren Buffett, who, at the time of writing, is the third wealthiest person in the world. Buffett hails this book as “by far, the best book on investing ever written.” This summary highlights the key takeaways from Graham’s timeless classic.

1. Meet Mr. Market

Imagine you own a portion of a business worth $1,000. Each day, a character named Mr. Market visits you with an offer to buy your share or sell you more, based on his valuation. Mr. Market’s opinions can be wildly inconsistent. For example, in March 2000, he might value your share at $2,600, only to drop it to $500 by March 2001, despite the business’s income growing by 50% and profits by 20% during that time.

Should you let Mr. Market dictate the value of your $1,000 investment? Not! One of Graham’s core principles is that a stock is more than just a ticker symbol with a price; it represents an ownership interest in a business. Because Mr. Market is often irrational, the underlying value of a business can differ significantly from the price he offers. He may become overly optimistic or unduly pessimistic, leading to frequent mispricing.

Graham advises investing only if you’re comfortable holding the stock without being swayed by Mr. Market’s fluctuating prices. For the investor who can stay cool-headed, Mr. Market provides a great opportunity to make money, as he only offers opportunities, not obligations. You should be ready to sell when he offers excessively high prices and buy when he presents bargains. In Graham’s time, people were less bombarded with financial news and market data than we are today. Mr. Market used to come once a day with the morning newspaper, but now he’s in our pockets, tempting us with every glance at our phones.

Remember, you don’t have to deal with Mr. Market more frequently than people did in the past. If he doesn’t offer a good deal, ignore him and go about your day.

2. How to Invest as a Defensive Investor

Graham identifies two types of investors: the defensive (or passive) and the enterprising (or active). Most people are better suited for the defensive strategy, given their limited time for investing.

A defensive investor should maintain a balanced portfolio of bonds and stocks, such as a 50/50 split. The allocation should be adjusted once or twice a year; if stocks rise to 60% of the portfolio and bonds drop to 40%, sell stocks and buy bonds to restore the balance. Investing a fixed amount at regular intervals, like after receiving your salary, is called dollar-cost averaging. This approach ensures a fair average price for stocks and bonds and prevents buying heavily at the wrong time.

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For the stock component, the defensive investor should:

1. Diversify across 10 to 30 companies and avoid overexposure to any single industry.
2. Invest in large companies, which Graham defined as those with annual sales of over $100 million (equivalent to about $700 million today).
3. Choose conservatively financed companies, with current assets at least twice their current liabilities.
4. Ensure the company has paid dividends for at least the past 20 years.
5. Avoid companies with earnings deficits in the last decade.
6. Look for at least 33% earnings growth over the past ten years (about 2.9% annually).
7. Avoid overpaying for assets; the stock price should not exceed 1.5 times its net asset value.
8. Avoid overpaying for earnings; the price-to-earnings ratio should not exceed 15 based on the last 12 months’ earnings.

Alternatively, investing in an index fund can yield returns similar to the market average. If you’re content with average rewards, this is sufficient. However, if you seek more, consider the next approach.

3. How to Invest as an Enterprising Investor

While it seems easy for a defensive investor to achieve average market returns, beating the market as an enterprising investor requires much more effort, patience, and time. This is not suitable for everyone, as it’s easy to fall prey to Mr. Market’s price fluctuations.

Consider these two statements from the dot-com bubble era: “It’s a new world order…,” and “Is the stock market riskier today simply because prices are higher? The answer is no!” Both turned out to be costly errors for investors. Graham emphasizes that the price you’re willing to pay must be finite, as company profits are finite.

The intelligent investor avoids “growth stocks,” which rely heavily on future earnings that are less predictable. Instead, look for companies priced lower than their net working capital, meaning you’re essentially paying nothing for fixed assets like buildings and machinery. These opportunities are rare except in bear markets.

Graham suggests additional criteria for enterprising investors, similar to those for defensive investors but with looser constraints. Company size is not a constraint, and diversification is recommended but not strictly defined. Enterprising investors should study annual financial reports, for which Graham wrote “The Interpretation of Financial Statements,” a topic for another day.

4. Insist on a Margin of Safety

No matter how carefully you plan, you can never eliminate the risk of being wrong. To minimize this risk, insist on a “margin of safety” in every investment. When a stock’s price is no more than two-thirds of its calculated value, it provides this margin.

Just as you wouldn’t build a ship that sinks if one more Viking boards than it’s designed for, don’t invest in a stock you think is worth $31 if it’s priced at $30. Errors in judgment could delay your financial freedom or worse.

A formula from the book can help estimate a company’s value: Value = current (normal) earnings × 8.5 + 2 × expected annual growth rate. For example, in September 2018, Amazon’s stock price implied a 74% annual growth rate, while Apple’s implied a mere 5.8%. Does this seem reasonable?

5. Risk and Reward Are Not Always Correlated

According to academic theory, the rate of return should match the degree of risk. Risk is often measured as the volatility of investment returns. Graham disagrees, arguing that price and value are often disconnected.

The return you can expect depends on the time and effort you invest in finding bargains. The minimum return goes to the defensive investor, while the maximum goes to the enterprising investor.

Consider a scenario: It’s 4:00 a.m., and you’re in a shady bar in Moscow. A man offers $10,000 if you play Russian Roulette with a 16.7% chance of disaster. For $100,000, you must take two shots, doubling the risk. This scenario exemplifies the academic approach of higher rewards for higher risks. But investing doesn’t have to be like that. When you buy a company for 60 cents on the dollar, you have a low-risk, high-reward opportunity. Buying another for 40 cents on the dollar offers even better potential with lower risk. It’s not riskier to buy a dollar for 40 cents just because the reward is higher.

Five Quick Recap

1. The market is often overly optimistic or pessimistic. Don’t let this skew your perception of asset value. View it as an opportunity to deal with an irrational counterparty.
2. A defensive investor should have a diversified portfolio of stocks and bonds, focusing on low-priced issues.
3. An enterprising investor should target undervalued stocks, especially those trading below net working capital.
4. The intelligent investor must always ensure a margin of safety in every investment.
5. Risk and reward aren’t necessarily correlated. More time and effort in finding bargain assets can yield higher returns with lower risk.

Graham’s advice remains as relevant today as it was in the 1970s. His principles of rational investing, emotional control, and a margin of safety continue to guide intelligent investors in navigating the complexities of the stock market.

3. THINK AND GROW RICH SUMMARY (BY NAPOLEON HILL)

THINK AND GROW RICH SUMMARY (BY NAPOLEON HILL)

To achieve wealth, no matter your chosen path — whether as a trader, a value investor, a real estate expert, a CEO, or an entrepreneur — developing the right mindset is crucial. Here are the top five takeaways from “Think and Grow Rich” by Napoleon Hill.

While some individuals might acquire riches without adhering to the guidance in this book, relying on sheer luck instead of taking control of your own actions and thoughts is a flawed approach at best. Instead, let’s explore how you can maximize your chances of amassing a great fortune. As Hill says, “If you do not conquer self, you will be conquered by self.”

1. It Is What You Think That Matters

“Thoughts are things, and powerful things at that when mixed with definiteness of purpose, persistence, and a burning desire for their translation into riches.” This central theme of “Think and Grow Rich” underscores the importance of a strong mental attitude.

Riches begin with a thought. Every achievement, every wealth, starts with an idea. Great leaders like Mahatma Gandhi, George Washington, and Martin Luther King all began with a vision. You have the power to control your mind by feeding it with chosen thoughts, which is incredibly powerful. Thought, when backed by a strong desire, tends to manifest into its physical equivalent. However, if you do not deliberately plant thoughts in your subconscious mind, it will pick up random thoughts, which can lead to unintended consequences. “If you fail to control your own mind, you may be sure that you will control nothing else.”

2. A Burning Desire

Long ago, a warrior faced a formidable foe. Upon arrival in enemy territory, he ordered his troops to burn their ships, leaving them no option but to win. And they did. This story illustrates the power of a burning desire, something crucial for success.

If you ask people what they want, many cannot answer. The universe does not respond to vague wishes but to burning desires, implemented through definite plans and persistent effort. “God seems to throw himself on the side of the man who knows exactly what he wants if he’s determined to get just that.” Here’s a six-step method for transforming desire into its material form:

1. Fix in your mind a specific amount of money you wish to acquire.
2. Determine what you will give in return for this money.
3. Establish a definite date by which you plan to possess the money.
4. Create a plan and begin immediately to carry it out, regardless of whether you are ready.
5. Write down your goals and plans into a concise statement.
6. Read your written statement aloud twice daily, preferably in the morning and before bed.

This last step is called auto-suggestion, helping create faith that your burning desire will manifest.

3. Become an Unstoppable Force

Persistence is key. The story of Henry Ford demanding his engineers create an eight-cylinder engine in a single block, despite repeated claims of impossibility, showcases the power of unwavering determination. Eventually, they succeeded because he wouldn’t accept defeat.

Napoleon Hill emphasizes that “There may be no heroic connotation to the word persistence, but the quality is to the character of a man what carbon is to steel.” Persistence insures against failure and is crucial for success in any endeavor. Remember, there is no such thing as getting something for nothing. Stick to your plan, and never give up. A quitter never wins, and a winner never quits.

4. Harness Sexual Energy

According to Napoleon Hill, the five strongest stimulants known to man are friendship, music, a burning desire for riches, love, and sex. The desire for sex is the most powerful of all human desires. Great achievements have often stemmed from transmutation of sexual energy into creativity and productive effort.

This energy must be redirected from physical desire into other forms of motivation and action to elevate one to the status of genius. Most men don’t achieve much before 40 because, by then, they’ve learned to channel this energy productively. Today’s temptations make this discipline even harder, but with willpower and habit-forming, it’s possible to harness this powerful force.

5. Conquer Your Fears

Before you can apply Hill’s philosophy, you must conquer your fears. Here are six common and destructive fears that exist only in your mind, but can be controlled with practice:

1. Fear of Poverty: This is characterized by a lack of ambition due to money worries. Decide that whatever you can acquire, given your best effort, is sufficient.
2. Fear of Criticism: Indifference or nervousness in the presence of others destroys initiative. Stop worrying about others’ opinions and dare to take risks.
3. Fear of Ill-Health: Often seen in those who feign illness as an excuse for laziness. Avoid focusing on symptoms or googling them; instead, cultivate a positive mindset.
4. Fear of Loss of Love: Jealousy is a sign of this fear. Learn to be content alone, so anything else becomes a bonus.
5. Fear of Old Age: Speaking apologetically about one’s age can indicate this fear. Embrace aging as a blessing, offering wisdom and self-control.
6. Fear of Death: Constantly thinking about dying instead of living prevents happiness. Accept death as an inevitable part of life and focus on living fully.

Kill these fears by recognizing that nothing in life is worth the price of constant worry.

Quick Recap

1. It’s what you think that matters. Thoughts, combined with purpose, are powerful.
2. A burning desire, combined with a definite plan, is essential for success.
3. Persistence makes you unstoppable. Never give up on your goals
4. Use sexual energy to fuel creativity and productivity.
5. Conquer your fears to achieve greatness.

Are you ready to think and grow rich?

4. THE PSYCHOLOGY OF MONEY (BY MORGAN HOUSEL)

THE PSYCHOLOGY OF MONEY (BY MORGAN HOUSEL)

Top 5 Takeaways from “The Psychology of Money” by Morgan Housel

Introduction

In “The Psychology of Money,” Morgan Housel explores how our attitudes and behaviors with money have a more profound impact on our financial success than technical know-how or intelligence. This book reveals the crucial “soft skills” of investing and personal finance, showing that anyone can achieve financial freedom by adopting the right mindset. Here are the top five takeaways that can help you excel in the often unpredictable world of finance.

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1. Pay the Price

Imagine you desire a luxurious watch and head to the store. You know you can either buy it or steal it and run away. You’d probably choose to buy it because you understand that everything comes with a price. Investing, like purchasing a watch, also comes with its own cost.

Investing in the stock market, particularly in a concentrated portfolio, involves the “price” of volatility. To achieve high returns over time, you must be prepared for the ups and downs. For instance, consider Netflix investors who experienced significant declines during tough periods like in 2011, when the stock price fell 80%. Even a more conservative investment, such as an S&P 500 index fund, has faced substantial downturns, including a 50% drop over eight months.

Investors need to accept volatility as the price for a brighter financial future. Success in the stock market doesn’t come without experiencing and enduring these turbulent times.

2. Never Enough

Capitalism often fosters a relentless drive for more, leading to a perpetual sense of inadequacy. Housel illustrates this through a series of examples where individuals feel financially successful until they compare themselves to someone wealthier. This comparison game is a recipe for dissatisfaction and can lead to destructive behaviors.

For instance, someone in the top 1% of income earners might feel content until they compare themselves to a billionaire. The urge to constantly climb higher can lead to risky financial behaviors, such as excessive leveraging or unethical practices, which may result in severe consequences like financial ruin or personal scandals.

The key lesson is to recognize when you have enough. Don’t trade something you need and value for something unnecessary just because of envy or societal pressure.

3. Crazy is in the Eye of the Beholder

What seems irrational or “crazy” to one person may be perfectly logical to another, depending on their background and experiences. People make financial decisions based on their unique perspectives, shaped by their upbringing, education, and personal circumstances.

For example, lower-income households often spend more on lottery tickets, which might seem irrational to higher-income individuals. However, for these households, the lottery represents a slim chance of achieving dreams that seem otherwise unattainable, such as financial security or a better life.

Understanding that people have different perspectives helps us avoid blindly copying others’ investment strategies. It also reminds us that what works for one person may not suit another’s goals or risk tolerance.

4. Peek-a-Boo

Unpredictable events like the Great Depression, World War II, and COVID-19 influence financial markets. These events, often referred to as “Black Swans,” are characterized by their unexpected nature, significant impact, and the false belief that they could have been predicted in hindsight.

The key takeaway is to prepare yourself mentally and financially for unforeseen disasters rather than trying to predict them. For example, if you missed just four of the best stock market days over the past 20 years, your investment return would be significantly lower. Thus, instead of attempting to time the market, it’s better to stay invested and be ready for volatility.

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