Page 43 - DIY Investor Magazine | Issue 33

BOOK #1 – TO BECOME FINANCIALLY INDEPENDENT YOU MUST UNDERSTAND MONEY
The Psychology of Money by Morgan Housel is a great place to start if you want to understand and improve your relationship with money.
One of the key takeaways from this book was that it pays off to be humble. Everyone’s past is different, so you shouldn’t judge people for the way they manage their money. Instead, focus on making choices that you are comfortable with.
For example, many people opt for “Barista FI”, which is when you save up enough to cover your basic expenses and then work for your luxuries.
Others prefer safety and save up way more than they need to live on. This is called “Fat FI”. In between, there are many variations of FI that suit different people.
Personally, I am unlikely to stop earning an income because I like many of the self-employed jobs I do. At the same time, I enjoy the security of having enough money to live on forever, even if this isn’t strictly necessary.
Thus, I am likely to aim for Full FI and then reduce my hours significantly or focus on passion projects. Any extra income I have can then be spent wisely or donated to effective charities, thus increasing my positive influence on the world.
After reading this book, I have the confidence to pursue FI on my own terms instead of following someone else’s ideas.
Read the full book review here >
BOOK #2 – AVERAGE JOE CAN BE MILLIONAIRE BY TAKING CHARGE OF HIS FINANCES
The Millionaire Next Door by Thomas J. Stanley and William D. Danko is a classic that should be read by both beginners and those further along on their FI journey.
BONUS - LEARN THE INVESTING JARGON
Personal finance can be confusing, especially if you’re new to it. ETFs, Passive Investing, Bear Market or FIRE – what do all the terms financial bloggers use actually mean?
When I first developed an interest in managing my own money, it took me several years to learn about the various concepts and strategies. I have summarized all of them for you.
About Kathrin 15 Articles
Kathrin is an independent teacher and writer with a keen interest in Personal Finance topics. As a self-employed, she quickly realised that she had to take her financial future into her own hands, so she has studied how to save, invest, and plan for Early Retirement.
Kathrin joined BankeronWheels.com to bring a new perspective as she started her portfolio from scratch
in her early twenties and understands the challenges people face when first starting out. Kathrin currently lives in London but grew up on the continent and also takes a view of a European reader. Kathrin gets around on her foldable and electric GoCycle GX bike.
Read the full book review here (with videos) >
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DIY Investor Magazine · Apr 2022