Secrets of self-made millionaires by Adam Khoo should be the first personal finance book anyone starts picking up.
Why This is the First Personal Finance Book to Read
Easy to Understand
The first book should be easy to read. Try reading Benjamin Graham’s The Intelligent Investor as your first book. The impression of investing and managing personal finance may be – investing is hard, investing is for people with finance knowledge, and so on. Most people will not go past the first few chapters.
This book is different. It is easy to understand, even an average 10-year old can read it. And that’s the power of Adam Khoo’s books. They are written in such simple English that it makes it really readable. There are books where I keep going back from one sentence to another, just to figure out what it’s trying to say. But this is definitely not one of the books. I can read from one sentence to the next easily.
You have no trouble finishing the book, and understanding it.
All Key Concepts are There
The thing about most non-fiction book is that they have to be similar.
I’m not being rude, I’m just stating a fact.
Let’s use a book on Calculus as an example. It will talk about differentiation and integration. Most books will talk about the first principle of differentiation, and then get on to the formula. It’s a trash book if it doesn’t do so, because they are the crux of calculus. Only, different books tell the concepts in different ways, give different examples, but formula and concept are the same. Content is about 80% similar.
Same for personal finance. It’s not fiction, it is not biography. It is in some sense some degree of facts.
Adam Khoo’s Secrets of Self Made Millionaire is no difference. It’s not trash. In fact, it’s a good book, so it will have all the key concepts covered in other books as well.
And if you can get 80% of the stuff reading this easy to understand book, why go for others?
What’s more, this book is basically a summary of a lot of books into one single book. It contains steps on how to become rich. It teaches the steps on how to start an online business, it teaches how to select mutual funds and stocks. And it provides step-by-step. If you want to learn all these, you don’t need to go to other books. In just a few chapters, this book gives you all the steps to get you started.
More Applicable to Singapore Residents
Personal finance books from the US usually talk about ROTH IRA, capital gain taxes, and so on.
They are less relevant to me. If your residency, or citizenship is non- US, probably that’s the case too.
Yes, we can adopt them to our local context, but they are just very different. I feel Adam Khoo’s book is likely to be more relevant to many parts of Asia, then personal finance books written with the context of US.
Quotes I Like
Quote 1
Quote: “Finally, I would like to challenge you to complete this book within ten days or less.”
My Thoughts:
Most will think I am crazy to call this a quote.
But I really like this quote, and I think it is a very good and important quote.
Be quick to take action, and complete the actions, is often quite important in life. Often, a lot of projects that we take can be done quickly, things often do not need so much time to complete. And the longer we drag something, the less chance of it being completed.
Hence, speed is essential, in many things. Finish it fast.
Quote 2
Quote: “Making money is a game. If you learn the rules of this game, money will flow into your hands.”
My Thoughts:
Since making money is a game, making money is FUN.
About this book
Adam Khoo talks about how to become rich with these steps:
- Have the correct Mindset
- Have a financial goal
- Come up with a plan
- Increase income and Decrease expenses
- Grow your wealth (Invest)
- Protect your wealth (insurances, and save on taxes) – this is not the focus of this book
The rest of the book goes on giving details on how to achieve each step.
Things I want to remember from this book:
On the generating income part:
- You should spend time on high value work.
- If you spend 1 hour doing some low- value tasks which could be outsourced at low cost, and deprive yourself from doing high value tasks which earns more, then you are losing money.
- Income = value x scalability x time
- Be exceptionally so that your value increases
- This book actually talks about spending more time to work on high value items. And that’s what many book don’t say. You actually need to spend enough time to work to earn money (whether it is a passive income, where you need time to create that thing that drives passive income, or active income). But it also emphasis that you should spend time on the correct thing.
- Scale it by serving large number of people at a time. This is the one that makes ones’ income exponential.
- Have multiple streams of income (e.g. through internet businesses) –> this book even goes through the steps on how to set up an internet business. Just 3 chapters (Chapters 10 – 12 or in less than 70 pages), you get all the steps. No need another book.
On the Investing part
You get higher returns for lower risk. The book actually recommends US stocks, as opposed to Singapore stocks. Something that I haven’t gotten myself into.
A reminder to look into that.
The book also talks about how to pick stocks through value investing. If you want an easy to understand book that summarizes the key steps into 2 chapters (Chapter 18 and 19), then this is the book.
Conclusion
I highly recommend this book if you want a book to get started on building wealth.
It is easy to understand, and covers many topics. It goes through coming up with a financial plan, how to set up an online business, how to select stocks and so on. While there are so many stuff covered in a single book, it’s not just touch and go, but filled with the steps on HOW to do it. The book essentially gives us the steps to get them done.
This book is first published in 2006, and while many things have changed, the essentials still remain. Do note that some of the websites referenced in the book may not work anymore, but with Google, you can easily find alternatives.