As a doctor, I was told my entire life to not go into medicine for the money. But the idea was perpetuated so much that no one actually ever taught me about money itself. In this article, I’m going to break down the best books on personal finance that I’ve ever read.
Let’s get into it.
Book number one is Rich Dad Poor Dad by Robert Kiyosaki.
This book is about the story of Robert’s two dads. One of them is his real dad who worked as a government employee and lived from paycheck to paycheck. The other one was his friend’s dad who owned a business that allowed him to look at money very differently.
Here are my two biggest takeaways from Rich Dad Poor Dad. The first is that working to be 65 and finally enjoying freedom after all of those years of hard work is an oversold idea.
Instead, ask yourself: How can I make my money work hard for me?
That gets into another concept, which is to look at things as assets versus liabilities.
When you purchase something for the sake of purchasing and having it, it is most of the time just a liability. For example, we buy a car or a house. Those feel nice and they make us feel like we’re growing in society. But often, they just cost us a monthly or a big lump sum payment.
Compare it to something that would be considered an asset like buying a rental property, starting a business, or investing in stocks that grow or pay you a dividend. Understand what your dollars are doing and make sure your dollars are actually working for you.
Buy assets versus liabilities.
How much money do I want to have for myself and my family? How can we have a lifestyle that we’re comfortable with? How many assets do I have to accumulate over the next 20 or 30 years to really help me enjoy life so I do not have to wait until I’m 65?
This book helps me understand what I want to achieve.
Book number two is The White Coat Investor.
As a physician, there is so much financial knowledge that no one really teaches you, but you suddenly have to know.
Here are some examples: How do I go into medical school? How do I pay for it? What kind of loans should I be looking at? What interest rates should I be considering? How do I actually pay off those loans? What are my options?
And then when you get into residency, which is where I am now: What type of things should I be doing when I have my first salary? How should I be paying my loans off? How should I be investing?
What other things should I be considering? These are things like liability and disability insurance, both of which I have now, thanks to this book!
It really helps you have a nice game plan, especially in the first few years of your medical career.
And when you get your first physician salary: What should I do with it? How should I pay off my loans? How should I change my life insurance? What type of things should I be doing to protect myself and my family? And what should I do to live a life where my lifestyle is not creeping up just because my income is?
The White Coat Investor book really breaks down every part of the medical journey. It doesn’t really matter if you’re in medical school, you’re pursuing nursing, pharmacy, or anything related to healthcare, this book is for you.
It’s a quick and easy read, and something that you can always come back to once you’re at the next phase of your journey.
Book number three is The Richest Man in Babylon. I’m a big fan of personal finance books that are told in the form of stories. It’s easier to understand concepts instead of having a bunch of graphs, figures, and numbers, especially if you’re not a numbers person.
The Richest Man in Babylon is exactly like that. It doesn’t feel like a personal finance book. It nicely tells you the story of somebody who’s subtly focusing on the concept of paying yourself first and the benefits that they’re able to accumulate throughout their life.
So if you’re interested, it’s a really quick, easy read.
It also allows you to focus on things like: Am I making sure that a dollar is coming into my bank account, who is getting the benefit of that dollar first? Is it going to my bills? Is it going to paying other people, or am I making sure that I’m paying my future self in 5, 10, 20 years first?
The different concepts that we’ll talk about in the upcoming books will really help you understand what to do with that money.
Book number four is The Total Money Makeover by Dave Ramsey. Dave Ramsey, to put it lightly, can be very polarizing.
On one end, you can say that you love his concepts, but on the other end, you might say that you totally disagree. And it really just depends on how educated you are in personal finance.
He focuses on people who are in debt and have no idea how to manage their money or how to grow their wealth for both themselves as well as upcoming generations.
And if you understand that then his books, especially the Total Money Makeover, do a great job.
As of the making of this article, I’m a little under $200,000 in medical school debt that I’ll have to pay off in the next upcoming years.
This book was one of the first to really break down the steps my wife and I have to do to make sure we’re ready financially. That includes being ready for any kind of emergency like a car breakdown or healthcare costs and paying off debts before we go looking for a house, saving for retirement, and saving for our kids’ education.
This contains initial concepts in personal finance, but it helped me break down the different steps that we needed to take.
The first thing we did was to set up an emergency fund so that if we have some kind of emergency, like our car breaking down, or we have to pay for some emergency travel across the country, we have a fund set up for those.
Now that we’ve learned the basics, then we’ve upgraded our personal finance knowledge to what to do with our extra money while we’re trying to pay off our debt.
So if you are somebody who doesn’t really know what to do with your money, you are in debt, or you feel like your expenses don’t allow you to save enough money, then The Total Money Makeover is a great book for you.
It tackles things like educational debt, personal debt, and how to actually save money, especially when you feel like you’re always spending as much as you’re making.
It also talks about two concepts I really enjoy, which are the snowball and the avalanche approach of how to pay off any debt that you have, including med school debt.
It’s the same approach that I’m taking on how to pay off my med school debt on a monthly basis.
If you’re going to medical school and are interested to know about medical school debt and education costs, then check out this article: My Med School Student Loans
Book number five is One Rental At A Time by Michael Zuber.
Now, we’re starting to make a transition from understanding the basics of personal finance to what to do with the money once you have it.
I’m a big believer that you shouldn’t just put all your money in one basket. So I shouldn’t just go on the stock market, or just start a business, or just go into real estate, but I should have some diversification.
One of the places that my wife and I will soon be putting our money in is real estate. It’s a tangible asset that you can see and that you can pass on to your kids and upcoming generations.
To understand real estate, sometimes finance books really get down to the nitty-gritty with the numbers. But one book that nicely breaks it down in the form of a story is One Rental at a Time.
This is about the story of how Michael Zuber and his family started from one house. It breaks down what they paid and how much it cost, and how they went from one rental to the next rental.
So if you’re interested in real estate, this book gives a nice breakdown of what the numbers look like without getting too number heavy. It’s a very easy read. And it’s a book that I often come back to in my Kindle libraries.
Book number six is Profit First by Michael Michalowicz.
This is technically a business book, but you can still use it for personal finance.
I got this book when I was learning to manage the funds of TheMDJourney and other ventures that I have running on the side.
The real question is how much of that money comes to me, how much goes to taxes, and how much goes to the employees.
It helped me understand some concepts, such as making sure that you pay yourself first.
This is also one of the concepts from The Richest Man in Babylon. But Profit First also shows you exactly how to do that, how much money should come to you, how much money should go into a tax account, and so on.
So, as an example, I’ve been running TheMDJourney for the last six to seven years and there’s obviously income that comes from the ads, the affiliates, or students who decide to buy our books or work with us one on one.
But not all that income is mine. Some of them have to go to my employees or other expenses.
But even the income that’s left after that still doesn’t come to me. I have to pay taxes every three months. And then I have to pay a tax based on my yearly income.
So I have to put money aside to account for taxes at the end of the year, something that you don’t really have to do when you’re just working a normal W2 job where your taxes are essentially taken out of your paycheck.
The Profit First book gives a really nice breakdown of where your money goes.
I know how much will go into my tax account, so I literally have a separate bank account that is meant for taxes. I know how much will go into my expenses account, so I have enough to pay my employees, all the software that we use, et cetera.
I also know how much money will go into my account. So then I can use it however I wish, whether it be for groceries or other investments. It’s a nice distribution.
Again, it is technically a business book that is very nicely told in the form of a story.
I’ve used the same concept on how to manage my personal finance. So every time we get a dollar, whether it be my wife’s job or my own job, or income that we get from TheMDJourney, or if I’m moonlighting in the hospital, we know where each of those dollars goes.
We’ve decided what our priority is. This is how we’re gonna make sure that we pay ourselves and grow our investment. This is how we make sure that we have a budget that can cover emergencies. And that there will be a budget for us to enjoy ourselves, whether it be to buy clothes or buy food, or go out to eat, or buy other equipment such as cameras and laptops and computers. We have a direction for each of those dollars.
And so in a way, we’ve designed our financial life where each dollar is almost like a personal employee and it’s going to work for us in different avenues.
If you’re interested in how to do that, definitely check out the Profit First book. The entire way that my wife and I do reverse budgeting and other concepts that I talk about here in the TheMDJourney are from this book.
Book number seven is The Lifestyle Investor by Justin Donald. This was a book that changed the game in terms of what I saw as a possibility.
When you’re working as a physician, you have a very nice, comfortable salary that can pay for your family, yourself, and your future investments.
Reading The Lifestyle Investor was a light bulb moment for me because I got away from thinking only about stocks, real estate, saving money, and putting money in a 401k, but also thinking about what investments I can have that will work for me so that I’ll be having the life that I want.
It’s the accumulation of all the principles that we’ve talked about in the past few books.
Justin Donald and his wife were able to make enough income from various investments and an eight-figure net worth in just a few years.
Now, he just uses his time to work on different investments and products that he wants to, which sounds like the exact life that we want, but he’s nowhere close to being 65.
And so if you’re interested in the different deals and investments that he looks at, definitely check out this book.
There may be a few years down the line for me leading to a position where that’s a possibility. But it still allows me to see where I want to be.
Maybe you’re 50 and your kids are in their teenage or mid-twenties age. You want to be able to spend as much time with them and not be trapped. And you still need to work to be able to save for your retirement.
This is a nice book that not only talks about future planning but also about things that you can do at the moment.
This is a book that can really inspire you about what your financial future can look like. This isn’t a book where the author says “here is my Lambo” or “here is my yacht”. He doesn’t do any of that in the book. It is a personal finance book that is told using a nice story.
It also has a very engaging podcast that I often listen to on my runs or my drive to the hospital. This is for people who are going from nothing to having this kind of lifestyle where they can invest in the things that they care for while still focusing on their family, philanthropy efforts, or other projects that they’re interested in.
Book number eight is The Random Walk Guide to Investing. This is the one book that changed my entire perception of personal finance.
I actually still have this copy. I give it to friends to read if they don’t understand anything about money.
This is the book that I read in college when I had a job for the first time, and I was managing my own money. I was asking what in the world should I do with my money?
I randomly just grabbed this on Amazon. This book talks about some of the most basic financial principles.
Over the span of my college days and seven years into my medical journey, I’ve easily been able to save anywhere from 50 to a hundred thousand dollars in various different accounts, just using simple principles in this book.
These are ideas such as where you should put your money, how you should look at investing in the stock market, how you should look at a financial advisor, and things like fees and how to consider them.
It also tackles basic topics like bonds, index funds, stocks, and dividends.
This book nicely breaks those down without getting overly complicated. The last few chapters explain the principles that I still use today, which makes my stock investments super simple in the form of index funds.
If you have no idea about what to do with your personal finance and you want to make sure you’re providing for yourself, your family, and your future, consider checking out this book.
If you found this list helpful and you want to know other strategies and lessons on how to get better grades, how to be more productive, and how to manage your time in med school, then go ahead and click the link down below to get access to the absolutely free Med School Success Handbook.
As always, my friends, if you have any questions, go ahead and drop them in the comment section down below.
And if you did enjoy this article, you’ll definitely enjoy these other blog posts:
- My Med School Student Loans
- How To Get A Full Ride To Medical School
- Are Doctors Rich? [The Real Truth]
- Scholarships For Medical School In 2022
- How Much Does It Cost To Become A Doctor (Is It Worth It?)
- How Much Do Residents Make? Full Breakdown
- True Cost Of Medical Schools In USA [Complete Guide]
- Exactly How Much It Cost Me To Become A Doctor
- Can Medical School Student Loans Be Forgiven?
Thanks for being a part of my journey. Hopefully, I was a little help to you guys on yours.
Until the next one, my friend…