A few months ago I read a list of top Canadian personal finance books to read to get smarter about your money. I think it was in MoneySense magazine. Anyhow, in no particular order, here are some of those books and a link to them on my site should you want to check them out:
- The Wealthy Barber Returns, by David Chilton
- Moolala, by Bruce Sellery
- Money Talks, by Gail Vaz Oxlade
- Wealthing Like Rabbits, by Robert Brown
- The Automatic Millionaire, by David Bach
- Stop Over-Thinking Your Money, by Preet Banerjee
- Millionaire Teacher, by Andrew Hallam
- A Wealth of Common Sense, by Ben Carlson
I’ve read almost all of these books – they’re good. However the advice you’ll read about in them is – spoiler alert – not new.
- You should get out of debt.
- You should spend less than you make.
- You should establish and maintain an emergency fund.
- You should make savings automatic.
- You should invest some of your savings for long-term growth.
- You should set some long-term investing goals.
- Once invested, you should stay invested.
- Once invested, you should keep your investing fees very low.
- You should diversify your investments.
- You should mind your taxes.
- You should obtain adequate life and disability insurance.
- You should continue to educate yourself.
- Money doesn’t mean much if you don’t have your health. You should do what you can to stay healthy.
Before I get totally blasted by the authors let me state these authors did a fine job writing about money principles in their own unique way. That’s what makes these books enjoyable and engaging – their stories were different on these same subjects.
The big takeaway for me after reading my list above is most Canadians don’t need any more personal finance advice. There is mountains of it. This blog included!
What most Canadians need is a behavioural change. Myself included. I’ve give you some examples of my own bad behaviour:
- We probably bought too much house for what we need. We’ll live here for now and enjoy it.
- I haven’t killed all debt yet (mortgage debt remains). We’re working on it every month with prepayments.
- We bought a new car many years ago. Buying used would have saved us a couple thousand dollars.
- It took us years to establish an emergency fund. It wasn’t a big focus for us until a few years ago.
- Only in recent years have we made savings fully automatic for investing purposes. I admit, I was lazy on this one.
- I wasted 10 years of my investing career (in my 20s) invested in high-priced mutual fund products. I used to sabotage my portfolio. My wife and I now appreciate the value of low-cost financial products.
- I recognize every year I get older I need to eat better and exercise more if I want to live longer. I’ve learned this is the greatest asset I’ll ever have.
Damn. Behavioural change is tough.
For adults it can be especially painful because behaviours (good and bad) get ingrained over time. We also lose our objectivity as we get older – our perceptions are our reality. As a result, as we age we find more reasons to avoid change than embrace it.
There are dozens of behavioural change models but knowing what to do with your money is only a small part of the equation. People need to deeply understand their relationship with money, embrace it or become invested to change it, and then act accordingly.
Personal finance is more like an exercise in psychology than math…
Until behavioural finance can become more mainstream most Canadians will continue to do what they always do when it comes to money. This is even when they know better.
In closing by subscribing to my site it is my hope you’ll learn about my good (and bad) financial behaviours – so you can reflect on your own relationship with money. I developed this site to share my flawed existence with money and tell stories about others as well. It is my hope you embrace it.
What’s your relationship with money? Do you need more saving and investing advice? Let me know in a comment.