Sometimes, in order to use money wisely, it is best to take tips from time-honoured books. Books from the authors below have stood the test of time, inspiring many of us to improve our financial standing and use money in a wise way.
1. ‘"You desire to help thy friend, do so in a way that will not bring thy friend’s burdens upon thyself,"
George S. Clason, author of The Richest Man in Babylon, published his bestseller in 1926, but the fable-style book had already been set out as a series of pamphlets sent out by banks and insurance companies prior to becoming a published title.
The classic book dispenses financial advice through stories set in ancient Babylon. Its axioms, including the advice quoted above for those tempted to stand guarantor on a loan, are still relevant today.
2. “You may think, perhaps, that a little tea, or a little punch now and then, diet a little more costly, clothes a little finer, and a little more entertainment now and then can be no great matter but remember what Poor Richard says: “Many a little makes a mickle; beware of little expense for a small leak will sink a great ship.”
‘Poor Richard’, the author of Poor Richard’s Almanack, back in 1732, was in fact US Founding Father Benjamin Franklin. His almanac of homespun sayings written under the pseudonym seem to caution against luxury spending, even if tea and punch have turned into avocados and takeaway coffees in more recent times.
Ironically, ‘Poor Richard’ was a huge financial success for Franklin, affording him the chance for as much luxury spending as he desired.
3. “Fix in your mind the exact amount of money you desire. It is not sufficient merely to say: ‘I want plenty of money.’ Be definite as to the amount.”
Business consultant Napoleon Hill turned the Great Depression to his advantage, publishing bestseller Think & Grow Rich in 1937 to an eager audience. In the book he espouses a theory that has definite currency in the modern age - if you can visualise your goal (in this case a fixed amount of savings), you are more likely to meet it.
4. “Annual income 20 pounds, annual expenditure 19 [pounds] 19 [shillings] and six [pence], result happiness. Annual income 20 pounds, annual expenditure 20 pounds ought and six, result misery.“
Charles Dickens, whose father David spent some time in Marshalsea debtors’ prison, knew a thing or two about the importance of budgeting. Here he puts surprisingly wise words into the mouth of perpetual debtor Wilkins Micawber, in David Copperfield. Whether in old money or new, spending beyond your means always results in unhappiness.
5. “There is always risk, so learn to manage risk instead of avoiding it.”
A modern classic, Rich Dad Poor Dad by Robert Kiyosaki has sold over 27 million copies since its publication in 1997. The book talks about harnessing the power of cashflow from assets, so that they work for you, rather than you working for them. This quote is a timely reminder for anyone who is looking to start their investment journey.
6. "Have you ever noticed those people whom you see jogging day after day? They are the ones who seem not to need to jog. But that’s why they are fit. Those who are wealthy work at staying financially fit. But those who are not financially fit do little to change their status.”
Thomas Stanley and William Danko analysed the wealth and status of 292 millionaires back in the 1990s, when being a millionaire was relatively unusual.
The result, bestseller The Millionaire Next Door, became an instant classic.
Its central premise is that many millionaires accumulate wealth quietly, without status symbols, by sensible planning and spending time on financial fitness, as the quote above shows.
7. “Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
When the Sage of Omaha, Warren Buffett, names one of his children after a financial author, you can bet that he has something particular to offer. Benjamin Graham, writer of The Intelligent Investor, is a favourite of Warren Buffett’s and considered the father of value investing. Like Buffett, his strategy is to choose stocks carefully and hold them for as long as possible, hence the quotation above, aimed at highlighting the importance of control above impulsivity in investment.