Books are amazing sources of knowledge. Reading activates the brain in a vast number of ways and the benefits are profound. Here’s something you may not have considered. Reading can diversify your knowledge on a subject like personal finance – even when the books you read are unrelated to personal finance.
When I set out to read twelve books in 2017, I wanted to make a list. So, I set out with an intention to not search for personal finance books to read. I know, a personal finance blogger doesn’t want to read about personal finance. Sounds crazy, right? I promise I had a method to my madness.
Instead of searching for the greatest personal finance books known to man, I looked elsewhere. I scoured the reading lists of the top universities in the country. For a few days, I looked for reading lists for business schools, economics departments, and anything else I could find. I wanted to avoid reading purely about personal finance.
In my life, I truly believe I’m a better person because I’ve tried so many things. I played sports, tinkered with building websites as a kid, put on a national Halo tournament, and a bunch of other stuff. In high school, I started playing poker which I still play today. Now over the years, I’ve read books, played video games, traveled some, improved my golf game, and much more.
In doing all of those things, I truly believe it’s helped my career. I feel more creative after a round of golf. Different parts of my brain are activated after playing a poker tournament for 6 hours. By getting out and doing different things, you can boost your creativity.
Diversifying the books you read can have great effects on your personal finance expertise.
One of my favorite books so far is Thinking, Fast and Slow by Daniel Kahneman. Kahneman has won nobel prize in economics, but the book is about psychology and the way we think. One of my favorite parts of the book is this:
It is important to remember that this is a statement about averages: some individuals did much better, others did much worse. However, it is clear that for the large majority of individual investors, taking a shower and doing nothing would have been a better policy than implementing the ideas that came to their minds.
Kahneman goes on to write:
Men acted on their useless ideas significantly more often than women, as a result women achieved better investment… Click To Tweet
They showed that men acted on their useless ideas significantly more often than women, and that as a result women achieved better investment results than men.
It’s impossible for this section to not catch your eye. For one, it says ignoring your ideas and going to do something else could be a better investment strategy than investing in XYZ Company. Secondly, as a man, it basically says you suck at investing – and by simply being a man you are automatically worse off than a woman.
As Kahneman says, you need to remember this is on average. However, the findings are something to remember as you go on with your life. The book tells you that sometimes you will have useless ideas – and to me, that’s fine. The important point to remember is to expect some of your ideas might be useless in the end.
In general, your thought process will be effected.
Whenever you can break out of your comfort zone, you have a chance to grow significantly. The same can be said about reading beyond your normal subjects of interest. See what others are doing and relate it to your own life.
When I started reading The Power of Small: Why Little Things Make All the Difference, I was intrigued. I’m sure you’ve heard to focus on the bigger picture. However, this book focused on the little things you can do every day to ensure your success. The book ends with this:
…once we saw the power it had, small became the vital element of our professional and personal lives, nurturing both our careers and our relationships. Focusing on the tiniest of details of the work we love, finding magic in even the smallest inspirations, embracing the briefest moments – that’s where the passion is.
When you’re setting goals far into the future, that’s great – but it’s far too easy to become too focused on them. Instead, allow your goals to be the map, but then shove the map in your pocket. Appreciate all of the little things you can do along the journey. Don’t lose sight of the beauty around you.
You may have a goal to be a millionaire some day. That’s great. Keep striving for that goal, but be careful. You should still try to be a good person, a good friend, and positively effect the people around you.
Books can change the way you think about your money.
When I first started reading The Song Machine: Inside the Hit Factory by John Seabrook, I didn’t expect to learn much about personal finance and money. I knew it was a book about the pop music industry and how they churn out hit song after hit song. As a read the book however, I started to think a bit differently about my own net worth and how I should think about increasing it.
In the book, Seabrook talks about Rihanna’s boot camps where dozens of song writers travel to a city and write songs for an artist. After a week or two, the boot camp is supposed to emerge with a hit song ready to go for the artist. (I highly recommend reading this book if you’re a music fan.)
It wasn’t obvious at first how my thinking was effected by what I read. I had to reflect on the book for a few weeks before I could truly understand what I was thinking.
In the end, the book taught me you can’t do it all by yourself. If you want to increase your income, you need to learn how to use the tools around you. You need to learn how to work with others.
There’s this romance around music where we worship the singer songwriter. It’s easy to naively think all artists do everything by themselves. It’s romantic. Instead, that couldn’t be further from the truth.
Successful people are products of their experience and the people around them. Generally, nobody is able to be successful solely on their own efforts.
I believe I’m better off by making this realization. If my success grows over time, my wife, my family and the people around me will all play a part. In different ways, the people in your life make sacrifices, add to your expertise, and generally make you a better person. You are the sum of the people in your life.
If you want to get better with money and your personal finances, reading is key. Read about personal finance and everything in between. However, don’t forget inspiration and understanding may come from anywhere.
You don’t need to only read personal finance books to be better with your money. Business books, psychology books, and books about random subjects may serve as inspiration. Knowledge alone isn’t everything. It’s how you apply the knowledge that matters.
You can boost your creativity and understanding by removing yourself from the day to day. Simply walking down a hiking trail and noticing the trees, flowers, and animals around you can help a great deal.
By reading books unrelated to personal finance, you get a new perspective and you can reach a different level of understanding. Much like we’re all encouraged to diversify our portfolios, you can also diversify your knowledge and reap the benefits.
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