Best Personal Finance Books To Read In Your 30's - Frugal Beautiful (2024)

FAQs

What is the #1 rule of personal finance? ›

#1 Don't Spend More Than You Make

When your bank balance is looking healthy after payday, it's easy to overspend and not be as careful. However, there are several issues at play that result in people relying on borrowing money, racking up debt and living way beyond their means.

The 5P's represent - People, Philosophy, Product, Process, Performance. In finance, the 5P's served as a rule-of-thumb guide for our evaluation of whether to invest in a particular fund - hedge funds or private equity funds in my context.

One simple rule of thumb I tend to adopt is going by the 4-3-2-1 ratios to budgeting. This ratio allocates 40% of your income towards expenses, 30% towards housing, 20% towards savings and investments and 10% towards insurance.

The most important lesson from Rich Dad, Poor Dad is that financial literacy is crucial to financial success. He argues that school education fails in this regard and needs to effectively teach financial literacy, including the basics of financial management and wealth building.

One of the key benefits of reading financial literacy books is the development of confidence in managing personal finances. By gaining a solid understanding of financial concepts and strategies, individuals can make decisions with conviction, take calculated risks, and achieve financial independence.

Really! In good news for—likely every reader on this website, a company called WordsRated is looking for “Bibliofile-at-large” (i.e. contractors) to… read books for them. For every book you read, they'll pay you $200.

According to Pew Research, the typical American reads about four books a year. Compare that to the reading habits of American billionaire Bill Gates. He doesn't simply outpace an average reader, he's on an entirely different level; he powers through an astounding 50 books each year. That's about one book per week.

The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings.

Stocks and Mutual Funds

Many millionaires and billionaires made their money, at least in part, by investing in the stock market, or by owning stock in companies they started or worked for. Stocks can be an effective way to accumulate wealth, but rich people understand that you can also lose money in the stock market.

Rule 1: Never Lose Money

This might seem like a no-brainer because what investor sets out with the intention of losing their hard-earned cash? But, in fact, events can transpire that can cause an investor to forget this rule. Buffett thereby swears by Rule 2.

What is the principle 1 of finance? ›

Principle 1: A budget must be established to provide a tool to: project resources necessary to achieve a unit's goals and objectives, measure current financial performance, discover significant transaction errors, and.

The 70-20-10 budget formula divides your after-tax income into three buckets: 70% for living expenses, 20% for savings and debt, and 10% for additional savings and donations. By allocating your available income into these three distinct categories, you can better manage your money on a daily basis.

1. Spend less than you earn. This first principle is by far the most important. The only way you can be successful is by having more income than expenses every month.