6 Must-Read Books to Transform Your Mindset From Money to Net Worth

6 Must-Read Books to Transform Your Mindset From Money to Net Worth
6 Must-Read Books to Transform Your Mindset From Money to Net Worth

For most young people, the concept of “Net Worth” is mostly related to billionaires and folks with quite high incomes. However, net worth goes beyond that and is a fundamental concept that can help you understand and improve your money habits.

Net worth reflects more than just how high you are on the rich list. For the vast majority of the world, Forbes or the Wall Street Journal might be a far fetch. However, knowing your net worth and how to calculate it will help you learn fundamental money principles. These principles such as how to compound savings, and how to invest in stocks and mutual funds are rarely taught in formal schools.

In this article, we’ll provide 10 book recommendations that establish some core concepts around net worth. Hopefully, you’ll be able to reflect on your financial well-being and the options available as regards your future. But before that, let’s check out some insights on net worth from theory and practice.

Theory vs. Practice of Net Worth

In academia, the concept of net worth arises from several theories. such a question is likely to arise in an Economics essay, exam, or term paper. If you do encounter such assignments, be sure to check out services like Essay Writer UK that avail professional writers and sample papers.

Academic theories that anchor the concept of net worth take into account its social, human, environmental, and cultural dimensions. These include the Social Capital Theory, Human Capital Theory, and Bourdieu’s Theory of Social Reproduction, amongst others.

In traditional finance, the concept of net worth relates to maximizing assets while minimizing liabilities. Thus, the net worth of a business or an individual is simply its assets minus liabilities. That might be assets such as land, machinery, intellectual property, and cash balances, less all debts that are owed. In effect, that is the value of a company, although it is usually more complicated than that.

The concept remains the same for both people and companies. However, a company will be eager to balance the books through hedging while maximizing shareholder return. People will on the other hand use strategies such as saving, investing in assets and the stock market while holding out for long-term positions.

Practical Finance, Plus 6 Book Recommendations on Net Worth

Understanding how to grow your net worth looks and sounds as simple as maximizing assets and minimizing liabilities. The truth is slightly more nuanced although similar. One has to prioritize saving, invest wisely, and reduce unnecessary debt. Furthermore, factors such as lifestyle choices, career development, and risk tolerance all play a role in net worth.

Besides that, there are individuals who by the nature of their occupation might attain a higher net worth faster. However, that is wholly related to their spending.

Mark Cuban has stated that passion is the most important thing that an individual should have because with passion they can make anything work. Jeff Bezos has encouraged folks to never be afraid to bet on themselves – calculated risks and investing in personal growth can help your net worth grow.

Let’s now check out some important lessons from these ten insightful books:

I Will Teach You to Be Rich by Ramit Sethi

Sethi’s book is a straightforward and practical approach to various financial topics like investing, budgeting, saving, and debt management. Common misconceptions about finance are debunked, with automation encouraged regarding investments or expenses. The book’s six-week turnaround program encourages readers to take fast action to see their desired results.

Despite this, Sethi’s book might be deemed too materialistic by some. Important components of net worth such as social capital and personal development are overshadowed.

Broke Millennial Takes on Investing by Erin Lowry

This is one of the most practical books for young adults looking to start their investment journey. The book addresses realistic concerns for millennials looking to invest. For example, should millennials invest while still paying off student loans? how should they invest in socially conscious ways? Are robo-advisors and bots any good? And, where is the best place to get online investment advice?

Think and Grow Rich by Napoleon Hill:

Mindset matters, and this is what this book written decades ago in the 1930’s emphasizes. That is practical advice to the youth on the power of mindset and positivity. Hill highlights the power of persistence and the importance of goal setting and having a clear vision. Both of these are quite crucial to investment.

Despite its philosophical approach to finances, the book might be overly simplistic in some respects. The power of thought to attract material wealth seems to be devoid of evidence. Additionally, some principles that might have been applied during Hill’s time might not be applicable today.

The Simple Path to Wealth by J.L. Collins

One review has described this book as “what happens when a master storyteller learns the ins and outs of the financial industry”. This is a very practical book that offers detailed investment advice to folks who know practically nothing.

Collins elaborates on which investment opportunities one should prioritize depending on their income. The order he assigns is a match 401k, max Roth IRA, max 401k, and finally funding your taxable account with leftover cash. He also offers practical advice for the stock market, such as braving it through all the yearly volatility. While some of the concepts are a bit technical, you don’t need to be too savvy to follow through.

The book focuses on the stock market and money market funds, which not everyone might be too keen to get into.

Atomic Habits by James Clear

Atomic Habits doesn’t explicitly focus on personal finance. However, the principle of habit formation emphasized is important for long-term success. Small consistent changes can be made that can compound and significantly impact net worth.

The book promotes a “1% better ever day” principle that encourages the youth to look beyond quick fixes and focus on long-term strategies. One of these strategies for a college student would be to buy essay from trusted companies freeing up time for investment.

Your Money or Your Life by Vicki Robin and Joe Dominguez

This book takes on a literary self-help prose that many readers looking for financial advice might find squeamish. It functions more as a self-help book rather than a guide to financial investment. Still, YMYL gives some lucid advice that helps one to be in touch with their money habits.

YMYL aims to transform your relationship with money. That relationship encompasses more than just earnings, spending debts, and savings. The time spent on these functions paints a picture of your relationship with money, and eventually your satisfaction and fulfillment.

 Wrapping Up

With this article, we’ve aimed to showcase how can you integrate core principles related to net worth into your life as early as possible. The six book recommendations will also serve as a handy guide on how and where to invest, the required mindset, and the correct approach. Combine these insights with your personal goals to craft a unique path to financial fulfillment and high net worth.