Almost Infinite Investment Return

I was browsing through my Amazon affiliate sales the other day and noticed that I had sold copies of two great books: 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 (see Two Books that Will Change Your Financial Life for details), 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:

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.

BTW, I like/listen to podcasts for the same reason!

Comments

[Paul N]

I agree with your post that the ideas in these books' will give a grea return, however the only way it is infinite is the case where they are free. Just to nitpick a little because I think it is important for people to have a sense of what various rates of return mean, the actual rate of return is 39% APR compounded monthly. If you just double your return over 30 years, you would have over 70 Billion dollars.

[Sarah]

Nothing against these books, but the books *I* think have had an almost infinite return to me were not about finance.

[Easy]

Are you saying after buying the book for, say, $10, you didn't invest any money, but made a million dollars?

If you have invested say $100,000 and it became a million dollars, the rate of return is 900%, not nearly infinity.

[JeffinWesternWa]

Even more ...if they are a gift, buy, someone a copy!

[FMF]

Paul --

"almost"

[Stacey]

Hey FMF
Curious what podcasts you listen to. I've been listening to a bunch on Sticher lately.
Thanks

[FMF]

Stacey --

I listen to many as well, but the main ones are:

This is Your Life -- Michael Hyatt
Smart Passive Income -- Pat Flynn
Freakonomics
Entrepreneur on Fire
48 Days

Maybe I should do a post on great podcasts! :)

[Old Limey]

The books describe many principles and habits that if followed can certainly make you wealthy.

The problem for a great many people however is that they lack the discipline and willpower to incorporate these principles into their lifestyle over a great many years. It also requires that both the husband and wife be on the same page, if one has a tendency to be a big saver and the other a big spender then the end result is likely to be frustration and possibly even a divorce.

Even with two savers, one of them has to be a disciplined and successful investor and have the skills to steer their investments through troubled times in the market. As your investments grow in size so does the stress of managing them and we each have a different tolerance for being able to handle stress.

I learned a great deal in March 2000 when after a meteoric rise the dot.com bubble burst. Fortunately I had been expecting the crash, was prepared for it, and got completely out over a period of 4 trading days after the peak.

You can see the severity of this bubble by examining a plot of the Nasdaq 100 index. The start was in 10/1999, the peak was in 4/2000, and the bottom didn't arrive until 10/2002.

[Stacey]

FMF,
Thanks...I really enjoy Freakonomics. I've added all of the others to my Stitcher favorite channels and I'll give them a listen. I had heard about Michael Hyatt from a friend at work.

Here are some others that I listen to that you might want to try:

NPR Hourly News
The Truth about Money (Ric Edelman)
The Index Investor Show
The ETF Store
The Disciplined Investor
Money Girl's Quick and Dirty Tips
NPR: Planet Money
Grammar Girl Quick and Dirty Tips

Also, only available on iTunes (not Stitcher yet), is the following:
Paul Merriman

I have about 15 additional podcasts loaded into my favorites...but rarely get passed the above podcasts before the next week's episode loads and I start at the top of the favorites list again.

I think a podcast article would be good. I find listening to podcasts during driving, or walking the dog, fills the time with productive results.