Personal Finance Classics: Think and Grow Rich
There are less than two months left in 2012 and I have a lot of reading to do! To recap, I designated five books to be my foundation in personal finance:
1. The Richest Man in Babylon by George S. Caslon (Click for my review)
2. The Millionaire Next Door by Thomas Stanley and William Dank (Click for my review)
3. Think and Grow Rich Action Pack by Napoleon Hill
4. A Random Walk Down Wall Street by Burton Malkiel
5. The Intelligent Investor by Benjamin Graham
With Think and Grow Rich, we’re moving away from the foundation of personal finance success (like: not being a flashy bastard, spending less than you make, etc) and taking steps to create an above-average income, and hopefully an above-average life with it. It’s time to look beyond changing my habits and creating self discipline. I want to move to the next level in income. That’s where inspirational authors from the 1930s come in! Napoleon Hill wrote Think and Grow Rich in 1937. Hill was a student of Dale Carnegie, whose How To Win Friends and Influence People from 1936 is timeless advice that can teach you the basics of salesmanship and how to connect with people better than any contemporary work. Think and Grow Rich is well-cited and is an entrepreneurial must-read. I was excited to read it. But first, a question.
I run into lots of resistance when I talk about money. Being rich is a goal that makes many people uncomfortable and doesn’t really make sense as an end unto itself. Is the desire for wealth a base desire? Are we giving into greed and avarice by focusing any sort of effort into acquiring wealth? I have struggled to justify spending any time on building wealth because I held the belief for a long time that I cannot think about money because that would make me crass, base or deprived. But not thinking about money sends you down many wrong paths. A little bit of self-discipline over the past year and a half and I feel much less emotional about money and confident that I can use money as a tool to do good, have fun, be creative and be myself. I think many of us hesitate to think of “having a lot of money” as a noble goal because we equate “having a lot of money” with “being a total jerk who stomped on a lot of necks and sacrificed family and friends to get where he is”. I’m not the only one right? If we have not come from wealth and our understanding of having it has always been ostentatious wealth, then it’s easy to assume a desire for wealth makes you a less noble or interesting human being. But I have come around from that understanding. Wealth does not need to be ostentatious. Nor does it need to be your only shining goal in life. You can be who you are while building wealth. And if you are driven to create and are interested in building your own business, accumulating wealth from those efforts should be one of the rewards of those efforts! To conclude, wealth is not evil. If you want to make a lot of money, be comfortable with it. If you are focused, determined and willing to work towards your goal, Think and Grow Rich can help you get there.
Back to my review: The book is divided into 13 steps towards riches AND THEY ARE IN ALL CAPS IN THE BOOK TOO with lots of punctuation marks!!! (Did Tom Wolfe read Napoleon Hill?):
- Step One: DESIRE
- Step Two: FAITH
- Step Three: AUTOSUGGESTION
- Step Four: SPECIALIZED KNOWLEDGE
- Step Five: IMAGINATION
- Step Six: ORGANIZED PLANNING
- Step Seven: DECISION
- Step Eight: PERSISTENCE
- Step Nine: POWER OF THE MASTER MIND
- Step Ten: THE MYSTERY OF SEX TRANSMUTATION
- Step Eleven: THE SUBCONSCIOUS MIND
- Step Twelve: THE BRAIN
- Step Thirteen: THE SIXTH SENSE
While some of the titles are self-explanatory, many are not. I will let you enjoy the wonders of SEX TRANSMUTATION on your own. Each chapter is filled with both personal and now-historical anecdotes about Henry Ford, JP Morgan, Charles Schwab, Thomas Edison and many others. The Points to Pin Down give you an easy summary of the chapter, but you will learn more by really reading and re-reading this book. Do you have a master mind group? The power of the collective mind is incredible. I’ve been collaborating on a weekly basis with some blogging friends among other things, and it’s been effective and bringing back my creative side. Are you persistent? Do you know how to keep trying and to stay focused even when you are ready to let discouragement take over? Think and Grow Rich is one of my favorite books about money. It doesn’t have any technical education, but I guarantee it will make you richer, if you’re into that sort of thing.
A few great quotes from Think and Grow Rich
The “missing link” in all systems of education may be found in the failure of educational institutions to teach their students how to organize and use knowledge after they acquire it.
The majority of people who fail to accumulate money sufficient for their needs are generally easily influenced by the opinions of others…If you are influenced by the opinions of others, you will have no desire of your own.
Genuine wisdom is usually conspicuous through modesty and silence.
Spasmodic or occasional effort to apply the rules will be of no value to you. To get results, you must apply all of the rules until their application becomes a fixed habit with you. In no other way can you develop the neccesary “money consciousness”.
Next Time on Personal Finance Classics
It’s happening. Im reading the mother of all value investing books, The Intelligent Investor. In order to properly digest it, I think I may have to review one chapter at a time. I am also not convinced A Random Walk Down Wall Street needs to be in the Top 5. I really like the other four, and need to find a worthy final pick. What’s your favorite personal finance/money/investing book? I’d love to find the last book for this series!