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Understanding how money works and more specifically how YOUR money works is one of the first steps towards achieving financial independence. There is a misconception out there that everyone must follow the same pattern of getting a steady job after schooling, working for until you are 65, and then retiring. While the majority of Americans map out their life roadmap that way, your path can be different. Many people are seeking financial independence as a way to feel financially secure and feel empowered to pursue life goals that fulfill them and make them happy.
Being financially independent means having enough money in investments and savings that you do not have to rely on a typical 9 to 5 job. Being financially independent means you can spend more of your time on things that make you happy. Everyone’s journey will be different but you can use the below 9 best books on financial independence to start your journey.
Rich Dad, Poor Dad is often known as many people’s introduction into the world of investing and financial independence. Kiyosaki does a great job of analyzing the average person’s mindset on managing money and sheds light on why so many people get stuck in the lower- and middle-class cycles. Rich Dad, Poor Dad also aims to get readers in the right mindset to change their relationship with money. Rich Dad, Poor Dad will challenge you to stop saying “I can’t afford it” and start asking “how can I afford it?”
Set for Life is a great book for people who want a road map of what a journey towards financial independence could look like. Set for Life is broken up into three parts: The First $25,000 is the Hardest, From $25,000 to $100,00 through Housing and Income Generation, and Moving from $100,000 to Financial Freedom. Each section of the book gives detailed guidance on how to achieve each financial goal. Becoming financially independent can feel like a massive goal and Trench does a good job of breaking that large goal into smaller achievable goals that the reader can follow.
Financial Freedom touches on many different elements of achieving financial independence. The author, Grant Sabatier, starts the book by chronicling his own journey of starting with $2.26 in his bank account to ultimately achieving financial independence. Financial Freedom covers many topics that can help you on your journey including how much you will need to achieve financial freedom, how to approach spending money, and how to invest. Financial Freedom is a good book for those looking to draw inspiration from someone who has achieved financial independence.
Your Money or Your Life is a staple in the financial independence community. Robinson does a great job shifting your mindset to not think about purchases merely as spending money but as spending your time- your life. When you begin to think about purchasing a new purse or new TV in hours of your life needed to pay it off, it can really open your eyes to what items are truly worth. Frugality is a staple of Your Money or Your Life and many in financial independence community use it to focus their priorities and kick start their journeys.
Want to learn how to become financially independent through index fund investing? The Simple Path to Wealth is for you. Collins does a great job of outlining how the stock market, and index funds, work in general and how they can work for you. He also addresses general fears associated with investing and index funds and walks the reader through specific examples throughout history to validate index fund investing as a reliable means of achieving financial independence. If you are interested in achieving financial independence through passive investing, then The Simple Path to Wealth is your book.
The Millionaire Next Door does a great job challenging the idea that millionaires are solely people that own expensive clothes or flaunt their high income for society. Many millionaires in the United States are everyday people that have worked hard to accumulate wealth over time and implement strategies that teach their children to be wealthy as well. Read the Millionaire Next Door to see how your habits stack up with the everyday millionaire and learn how you can implement their strategies to accumulate wealth.
The 4-Hour Workweek provides an interesting take on setting up a fully automatic lifestyle. Ferris focuses on changing the reader’s mindset to accept that they do not have to life a normal 9 to 5 job and then challenges them to automate everything they are able to in order to maximize their free time. The 4-Hour Work Week proposes ideas all over the financial independence spectrum and is a good read if you are looking for how to simplify the work processes in your life.
Unlike many of the other books on this list, Playing with FIRE is told more like a traditional narrative story. Playing with FIRE chronicles the financial independence journey of the author Scott Rieckens, and his wife Taylor, as they grapple with the decision and execution of choosing a financially independent lifestyle. While Playing with FIRE has less actionable tips then the rest of the books on this list, it is good for people who want a personal story to relate to and learn from.
For those looking to achieve financial independence through real estate investing, Retire Early with Real Estate may be the book for you. Carson does a great job of outlining why real estate investing is a good option for achieving a financially independent lifestyle. He also includes a general road map for each step in your journey and how to capitalize and enjoy every stage. This book is a must for readers looking to explore real estate investing as a means to retire early.
What can you do now to start your financial independence journey?
To achieve financial independence, you first need to figure out where you are starting at and what you want to achieve. Goals like setting up a budget, tracking your net worth, and improving your credit score are just a few of the necessary first steps towards achieving financial independence.
Once you have tackled your debt, you will want to focus on growing your money. Investing is a great way to do this, whether it be through traditional stock market index funds or real estate. Read up on the different types of investing and dive in.
Track your spending and determine how much you need to be financially independent using the 4% rule. The 4% rule is a good starting place to determine your end goal number for considering yourself financially independent.