Almost Infinite Investment Return

I was browsing through my Amazon affiliate sales the other day and noticed that I had actually sold something! As I've said before, all my profits go to charity, so I was happy that I'll be able to make additional donations to The Sparrow's Nest. But this got me thinking about something else.

The two books that were purchased were The Millionaire Next Door and The Richest Man in Babylon. I got to thinking about these books, what they contain, and the people who bought them. I also started to think about my own life and how it's been impacted by a few good books. This is when I became VERY happy.

I became very happy for the people who bought the books. I know that if they read and apply the ideas found in these books, they will be much, much, much better off financially. In fact, if they apply the ideas over several years, they will become quite wealthy. So for a few dollars, these people now have the ideas that could help their net worth increase by tens of thousands, hundreds of thousands, or even millions of dollars.

So what's the return rate on those investments? If you bought something for $10 and 30 years later it had helped you become worth $1 million, that's a pretty amazing rate of return. In fact, it's close to an infinite rate of return. Now you could get these books from the library and make the return rate infinite (since there's no cost to you), but based on my experience, you need to have your own copies of these so you can read and re-read them often, underline, mark, and write in them, and refer to them at various times in the future. (Now if you get one as a gift, the return could be infinite too.) ;-)

That's why I recommend the books that I do. It's because I've read them over and over, have applied the principles they discuss to my life, and have seen my net worth grow substantially as a result. That's also why my recommended book list isn't 100 books long -- there just aren't that many books (at least that I've found) that meet my criteria. For now, the only books I can give this recommendation to are:

• The Millionaire Next Door
• The Richest Man in Babylon
• The Automatic Millionaire

If you don't have any of these books, I encourage you to get, read, and apply them. Doing so will give you a return close to infinite.

Comments

[Brian]

Those are very good recommendations. I'd suggest reading The Richest Man in Babylon first, then The Millionaire Next Door and finally The Automatic Millionaire.

[Dale]

Knowledge, particularly of the sort involving general rules that have had a broad applicability over a number of years, provides incredible leverage. Knowing how to distinguish the difference is useful too. There are times when you need to learn specific, ephemeral information. The list of mutual funds currently available in your company's 401(k) and the data on their performance is an example. In the long run, knowledge of how to evaluate that information is more valuable.

Learn to evaluate what is ephemeral and what is enduring. Learn the ephemeral things you need to know, but don't spend too much time on them. They won't matter down the road. Take the time to learn, understand and internalize the lasting knowledge and wisdom you can use.

[Matt Hartrich - Buffalo, NY]

What is the saying -- knowledge is power.

[Lazy Man and Money]

Why not use the library, but make notes on a separate piece of paper or computer document? Why not make into a financial wisdom cheat sheet, encompasing all the good ideas you have?

Also you could also set up a re-occurring calendar event every 6 months to remind you to go back and re-read a book.

[FMF]

My process is usually as follows:

1. Check out the book from the library and read it.

2. If it's worth being in my library (I'll re-read it several times), I buy it, then re-read it, taking notes in the front of the book.

3. When it's time to re-read/review it again, both the book and notes are available. In addition, it's available 24/7 in case I want to look anything up.