Transcript for:
Exploring Diverse Investment Strategies from Literature

over the last few years I have read almost every  book that exists on money and investing from the   classic books that cover the fundamentals like  Rich Dad Poor Dad to the psychology focused ones   like Think and Grow Rich to the books that go  into investing like one up on Wall Street so in   this video I'm going to break down the key things  I have learned and taken away from all the books   I've read some of them really surprised me because  they contradicted to what I learned from my day   job in Investment Banking and I'm curious to know  if you shared the same perspective so let's start   off with the basics and the most popular one and  that is Rich Dad Poor Dad this is the classic of   Classics and I can definitely see why it's so  popular it covers the foundations for finance   and money that isn't taught to us in school the  premise of this book is based around the author's   Two Dads his biological father who recommends  getting a secure job taking the traditional path   and retiring with the pension and then there's a  second dad who is his best friend's father and he   was a high school dropout he built a business  Empire and was all about independent thinking   and buying assets that make money for you and  this book is what introduced me to the concept   of assets and liabilities assets as it explains  are things that put money into your pocket this   could be anything from Investments like stocks  and shares real estate side hustles or businesses   that bring in extra income on the other hand  liabilities are things that take money out of your   pocket and they lose value over time and these  are the things you want to avoid especially in the   years that you're trying to build yourself up he  says that when you think of your home as a primary   investment you end up paying more for it and  buying more house than you need and that sucks up   a lot of your money in monthly installments that  could have been used more profitably somewhere   else so this is a really good book to begin  your personal finance Journey explains the Core   Concepts in a very digestible way and emphasizes  the importance of giving each pound or each dollar   a purpose and viewing it as an employee that  is constantly working for you so this mindset   clarifies the trade-off between in present  expenses and future income because every dollar   or every pound spent today is one that ultimately  won't be able to work for you later down the road   then he has a follow-up book which is the cash  flow quadrant so there are hundreds of ways to   earn money beyond the conventional nine-to-five  job most people think that a stable job is the   only legit and realistic way to Financial Security  but this book will paint a whole new picture it   makes you really understand the limitations of  an I25 job and how you don't have to be tied to   a desk for the rest of your life in order to  make money and be financially free in fact it   takes that one step further and says how relying  purely on your job might just be the worst thing   you do when it comes to making money and seeking  Financial Freedom the cash flow quadrant that he   discusses represents the four ways to earn money  it's being an employee so working a nine-to-five   job being self-employed or having a small business  so for example if you're a dentist a freelancer   and then there's being a big business owner and  then finally being an investor and in this book   he talks about how you can use this concept to  Achieve Financial Freedom and which of these paths   are most likely going to lead you down that road  it's a good book to get your mind ticking with   ideas but when it comes to actionable takeaways  and things you can Implement I would recommend   this book and that is the four hour work week  by Tim Ferriss so when I read this or even when   I saw the title I was initially quite skeptical I  mean a four hour work week sounded too good to be   true but as I got deeper into the book I realized  it wasn't at all about working less it was purely   about working smarter he talks about how anyone  can live a retired millionaire Lifestyle by   building their own business automating it and then  collecting their income as they go and live their   best life or the life that they would usually  wait for years and years and years to live when   they retire when you read the book it illustrates  how something that is initially very far-fetched   and seems like it's completely out of reach is  actually a lot more achievable than you think so   these two books go hand in hand cash flow quadrant  opens your eyes to the possibilities of earning   money outside the traditional job setup and then  the four hour work week week gives you the tools   to make that happen then we have the millionaire  fast lane the point that the author makes in this   book is that there is no such thing as get rich  easy but there is such thing as get rich quick   which is really interesting because you don't  hear that very often he talks about the three   paths in financial life the first path is the  sidewalk and it is one where you spend more than   you earn repeatedly which keeps you trapped in  a cycle of being paycheck to paycheck the second   part that he talks about is the slow lane and it's  about taking the safer apart in life getting good   grades getting a good job saving a portion of your  paycheck every month and then putting that into   Investments and eventually being able to retire at  65 plus years old and the issue with this is that   it is the slow game and you're ultimately trading  your time for money and then there's path three   and that is the fast lane and that is leveraging  your time to create passive income so in other   words investing your time in work that generates  passive income by creating a product or a system   that's capable of earning an income long after you  original time investment has been put into it and   it expands your income potential so what I really  like about this book is that MJ the author while   saying there is such thing as getting rich quick  which can sound a bit scammy he keeps it very real   in that it isn't possible without a lot of hustle  a lot of hard work and a lot of discipline you   need to be incredibly committed and even though  it might be or might look like that you get rich   really quick it's actually accumulation of years  and experience and knowledge that gets you to that   point next we have Think and Grow Rich this is one  of the books that tends to have different opinions   you either love it or you hate it there's hardly  a middle ground with this book I've come across   people who felt that this book was all fluff  and didn't really deliver on what I promised   they expected a clear actionable road map to  wealth and so they were quite disappointed when   they didn't find that and on the other hand there  are people who credit this book with transforming   their mindset and their financial lives for them  it was like this light bulb moment that helped   them unlock their limiting money believes and  figure out what was holding them back so what's   my take on it when it comes to success I believe  mindset is everything if you approach life with   a scarcity mindset thinking that there's never  enough and that money is hard to come by then   that is what you'll experience whereas on  the other hand if you believe in abundance   and that you're capable of achieving wealth your  actions will align to those beliefs and Lead You   towards success but and there is a big but mindset  alone is not enough you can have the most positive   abundance orientated mindset in the world but if  you're not taking any action you're not going to   get very far it's like having the best tools in  the world but never using them to build anything   you need both the right mindset and then also  consistent focused action so if you're looking   to improve the former and you're open to exploring  your beliefs and digging deep into your mindset   then this book is for you if you're not a fan of  the philosophical approach and you're looking for   a step-by-step guide to Building Wealth then  you might want to skip it and go for some of   the other ones that I mentioned in this video  when it comes to the getting rich part next we   have another classic which is the psychology of  money so I have a whole video dedicated to this   book and the lessons I've learned so I'll link  that over here ultimately money is as much about   psychology as it is about maths it's about how  our minds perceive and interact with money our   feelings towards money our past experiences  with money and these things often overshadow   the raw Financial knowledge that we have the  most interesting part of this book for me is in   relation to the fact of how often we misattribute  the role of chance or luck in our financial lives   so how's all the author talks about how most of us  learn what to do and what not to do about money by   studying the most exceptional financial success  stories like the Bill Gates of the world and   we think that we can replicate her but the more  exceptional the story The more likely it is that   luck played a bigger role in the outcome and so  the fewer lessons you can actually take from it   and Implement into your own life so he actually  recommends paying attention to the patterns and   not to the people so if one person took root  a to get success but 10 people took root B to   get success chances are root B is what's going to  work for you because it's more likely that chance   or luck played a role for the person that took  Route a when it comes to money there are some   key patterns and fundamentals that can apply to  absolutely everyone and it doesn't require a whole   amount of chance or luck and I've got a free guide  that goes into this and on page 32 of that guide   it goes through the most likely things that will  guarantee your success when it comes to investing   these are the things that have been proven Time  and Time Again by investing experts that have   trodden the path before us and things you need to  consider again that guide is completely free if   you want to check it out it's in the description  box below there are also some fundamentals that   I think most of the money books fail to mention  and I'll go into that in a second but firstly now   that we've covered the basics about how to manage  your money what about the getting rich part how do   we do that where do we put our money where should  our money be channeled into to multiply its value   Alex formosi introduced this concept of ignorance  it's debt when it comes to Gathering knowledge   he explains that the difference between your  current level and earning 100 million is just the   information that you haven't yet learned it's the  fact that you don't know how to make 100 million   and we can use this ignorance debt concept when  it comes to investing as beginner as we tend to   think we understand the topic a lot better than we  actually do you may think that we have grasped all   the intricacies and we're prepared to make really  big decisions when it comes to money investing but   this premature level of confidence can mislead us  if we don't have a strong enough Foundation when   it comes to our understanding so what are some of  the books that can help us tackle this ignorance   debt and that can start you on your investing  journey two books the intelligent investor and   girls that invest are great places to start the  intelligent investor is a book Warren Buffett   read when he was 19 and he still calls this  the best book on investing that has ever been   written the principles of this book are Timeless  and it illustrates how investing over the long   term does not require any specialist knowledge  it doesn't require being super intelligent   or having really deep Insight on anything it just  requires two things and that is one a rational   framework to make a decision and secondly not  letting your emotions override your rational   framework he covers how the market behaves the  basic fundamentals of finance and how to maintain   control of your psychology then the girls that  invest is written by a friend of mine sem another   really good book for the ultimate beginner who  wants to understand why they should invest the   basics and the terminology of investing and how  to find your investing personality type and create   a portfolio that matches that then there's a  little book of Common Sense investing written   by John Bogle who is the CEO of Vanguard and he  invented index fans so naturally he argues how the   winning strategy for beginner investors is simple  invest in index funds and do it indefinitely he   talks about why index funds outperform primary  Alternatives and talks about the ideal asset   allocation of stocks to bonds depending on your  age I personally think this book is a little bit   outdated for a number of reasons and I think that  BOGO who is a bit conservative when it comes to   asset allocation so a good follow-up to this book  is the dandor investor and one up on Wall Street   they both follow similar principles when it comes  to the best investments and it's that the best   investments are often right under your nose in the  sense that they align with what we already know   and engage with in our daily lives and based on  this we actually have a huge advantage over Wall   Street Pros I do agree with this to some extent so  for instance I had inverted line treatment done on   my teeth about five years ago and at the time I  was super impressed with the product I was able   to straighten my teeth without needing to wear  silver braces the treatment was discreet and I   was really happy with the results so I decided to  look into the company further and I found that it   was publicly listed I looked at the company's  reports and I decided to buy the stock that   investment turned out to be the investment that  I've made the biggest return on out of everything   that I've invested in and it was purely from me  being a customer and seeing the impact first hand   so I do somewhat agree that the average investor  has the potential to one-up professionals but it   isn't as simple as just okay be a customer  it requires a lot more research to do before   investing in that stock one common thread amongst  all of these books and across all legit genuine   Finance advice is that there is no shortcut  to success and that there are no shortcuts to   getting rich it requires discipline it requires  persistence and the ability to control your   emotions when it comes to money or when it comes  to those things in life what I have found that at   least from the money Focus books very few touch on  the importance of putting money towards yourself   before investing in the stock market and I guess  those are two very different topics but the truth   is investing in most cases is a very long and very  slow game whereas investing in yourself whether   that's your ability to manage money your ability  to make more money through a business through a   side hustle that is more important when it comes  to the short term although it does require a lot   more work and discipline and knowledge if you want  to go down this route I have plenty more videos   that can get you started and I've made a playlist  that I'll link up over here that you can look at   and I'll leave you with that but before I close  this video off can you do me a favor over 75 of   people who watch my videos haven't subscribed  to the channel and that is abnormally high so