10 Personal Finance Lessons (Less than $10) that Will Change Your Life

Just reading about how to get rich or how to lose weight will not get you the results you are hoping, but
ignoring the wisdom amassed by others is a sure way of failing. Business books are known to cover a
wide range, from pure thinking gems to plain basic or even charlatan work. Therefore, selecting those
that make a difference and put in simple words valuable lessons, it’s a tough mission.

When reading a great personal finance book, you will most likely have the feeling that it is teaching you
common sense. The real difficulty resides in applying the simple lessons, being consistent and resilient
daily and not giving in to temptations and shopping sprees. It’s like being on a diet (you will hear this
idea again soon).

Amazon has a list of over 38000 personal finance books, and this is growing daily, so it’s difficult to
choose just ten. Instead, we made a simple list of what constitutes the best advice from each book,
grouped into three levels, from beginner to business owner.

These books are by no means “the best” or “must read”, the same ideas are expressed in a dozen
others, but they just stand out either by clarity, humor or sharpness of ideas. Some already are a few
decades old, others are just fresh from the printing press, to have a nice balance is style and something
for each generation.

The selection is organized from finance newbie to small business owner and covers investments,
savings, taxes, and lifestyle decisions.

1.      Take personal responsibility (I’ll Teach You to Be Rich)

One of the best ideas in this book is that money management and weight control have common mechanisms. People talk about it, whine about it, and there are extensive literature and debate on the subject, when in fact the basics are easy: spend less than you earn and eat less than you burn in your daily activities.  That translates to taking responsible decisions and creating a consistent program to follow. We don’t get fat or in serious debt overnight.

2.      Pay yourself first (The Automatic Millionaire)

David Bach’s advice seems counter-intuitive especially when you are living paycheck to paycheck and still have student loans and maxed out credit cards. The secret is to pay yourself a small and constant amount as savings and put this on auto-pilot to avoid forgetting about it or finding excuses.

The “latte factor” as the author calls it is a generic name for the small, unnecessary expenses that we make every day. These dollars add up, and if we would purposely have added them to an investment account, we could end up with an impressive amount by retirement age.

3.      Get your taxes in order (Personal Finances for Dummies)

As the title suggests, this is for the absolute clueless in finances, the 20-year old who received no financial advice or decided to ignore it purposely. The most valuable lesson here is to learn more about the rules of the taxing game, to beat the system. This is all about spending less since taxes are some of the expenses you have little control over.

Telling Assets from Items

4.      Assets don’t have intrinsic value but generate it (Rich Dad, Poor Dad)

A paradigm shift in what an asset really is, in Kiyosaki’s opinion, it is not something that has a current value, like your house, but something that generates value over time. This lesson is worth thinking about when you decide what to spend money on. If you want a new car or a bigger home, those are in fact expenses, not assets. A real asset could be a training course that helps you get some freelance work or an empty garage that you can rent.

5.      You Are Not What You Drive (The Millionaire Next Door)

The pop-culture model of the millionaire with the Ferrari is, in fact, an outlier. Most (middle-aged) people with a considerable net worth are cautious spenders and even thrifty in their options. They prefer mid-range cars and are not afraid to buy used, even making a sort of a blind auction between dealers by asking for the best price. Some go as far as IKEA’s CEO who drives a Volvo from 1993 and shops at flea markets. The lesson here is to avoid social status symbols and focus on the real value: investing.

6.      Just say no! & Rich people dress well (You’re So Money)

It should be a no brainer to refuse any activity or invitation that could result in spending and brings no joy, networking benefits or another type of gain, yet social pressure and the fear of rejection pushes us into such occasions that destabilize the budget.

A bit counterintuitive when talking about saving, spending on quality items makes perfect sense. Using your dollars to look presentable for the job you want, not the one you have, is still a requirement, at least in corporate culture and could pay up in the long run. However, stick to just a few pieces, don’t use this as a shopping excuse.

7.      Anchoring makes you lose money (Thinking Fast and Slow)

Our brain has two systems, an instinctive, automatic one, and a logical one. While each of them is essential for survival and thriving, relying only on the instinctual one for financial decisions could be detrimental. One of the functions of the instinctual brain is to signal us good deals, something interesting, or something that is out of the ordinary. A simple example is a sale price, which is usually a much lower one than the “original price,” used as an anchor for comparison. The instinctual brain says buy, but the logical brain should kick in and make us ask ourselves if the initial price is valid.

8.      Pay in cash whenever possible (The Wealthy Barber)

Although using your credit cards wisely can result in some credit score increases, for better money management it makes sense to pay in cash. This makes budgeting easy and plays a psychological role. When you actually hand down money, you see them leaving your possession, and this increases your chances of being more careful while swiping a card is effortless and doesn’t trigger a pain point. It’s a simple advice and might be the answer why our grandparents were not engulfed by debt.

Business and Beyond

9.      Work on your business, not in your business (The E-Myth)

Most skilled people dream of escaping their 9-5 jobs by starting a business. They think that if they are really good at the technical aspect, this could translate into earning, having a schedule they love and living an accomplished life. The harsh reality hits when they find themselves working longer hours since they don’t have to do only the job, but take care of administrative and marketing stuff as well. Burnout and frustration rates are high, and you could be losing money on the long run.

The most important lesson here is that to be successful in business, you need management and investment skills, not just technical ones. If you are passionate about your domain but hate administrative work and networking, don’t start a business, find a better employer.

10.    Frugality is a marathon, not a sprint (Frugality for Depressives)

Learning to live a frugal lifestyle takes determination and a series of endless good choices. Living with depression makes everything feel more exhausting and leads to poor life choices, that add up. Ordering food instead of cooking, taking the taxi instead of waiting for the bus, all seem like the best option on the spot but are not on the long run. After struggling with depression for years, the author concludes that you should take it one step at a time and never expect quick fixes. Resilience and bouncing back from bad spending are more important than stressing over a strict budget.



All finance advice seems common sense when reading it. When it comes to implementation, most people can vouch that if it had been easy, everybody would have been a millionaire. This apparent simplicity fuels a flourishing industry of personal finance books and personal finance consultants. Having a budget, not giving in to shopping spree temptations and being informed about taxes are the most important pieces of advice.

What is your favorite personal finance book? What is your lesson?



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