The best gift you could give a young person, starting out in their first job, would be a copy of this book, Strong Money. By starting on the investment ladder early, the easier it will be for them to become financially independent. Compound interest will kick in early and most of the work is done. As a result, they can reduce the amount of salary, they need to allocate to savings because the interest on the investments will cover the gap.
I like this book for young people, because it will discuss in plain English how simple it is to start investing and growing their wealth. If they did nothing but invest in ETFs with low fees. The secret is to start early and consistently save a portion of their wages every week.
Dave Gow, author of “Strong Money Australia – How to Gain Financial Independence and Create a Life of Freedom” started life as a forklift driver and by age 28 had achieved financial independence. He is not a financial adviser, but just a person who wants to share his financial journey.
I believe his strategies are firmly grounded and would be of value to anyone who doesn’t know how to get on the road to financial independence.
When Dave Gow started researching how to get started, he read books about the FIRE movement. F.I.R.E. means Financial Independence Retire Early. Their main strategy is that to retire comfortably you need an investment sum of 25 times your final salary and, during the drawdown phase you can afford to drawdown 4% of your assets each year.
When Dave Gow achieved his financial independence, he found:
We needed much less wealth to retire than I previously thought if our savings were just parked in the right place.
The best part of the book is that he discusses in detail the pros and cons of investing in either shares or property. While initially believing that investing in real estate was the best way forward, he came to the conclusion that investing in shares, either directly or through managed funds, was a better way.
If you decide that you want to follow his lead, you may find the Financial Mappers’ blog, Controlling the urge to buy: Buy One, Throw One Out helpful in managing your spending.
While young people will benefit from this book more, because they will have more time to invest. However, this book is a good read with lots of valuable information for anyone of any age or income.
Glenis Phillips SF Fin – Good Financial Reads
Disclaimer: Financial Mappers does not have an Australian Services License, does not offer financial planning advice, and does not recommend financial products.
