I’m starting a series of blogs about questions in the mind of many of my readers. I will try to answer all the questions in short form and post it in this blog site.

The first question was asked by Ray Cuta via Facebook:

Question:  What are your top 10 personal finance book?

Hi Ray.

A few months ago, I wrote about the top books I recommend in my Inquirer column but it’s not 10 books. Let me put those books I recommended in the column plus others to make it 10. Personal Finance books are really helpful but not all are really sound. The following books are those that I personally like:

1)      Total Money Make Over by Dave Ramsey – I love this book as it is a no nonsense book on helping us get on the right track. It is instructional and very sound financial advices.

2)      Financial Peace by Dave Ramsey – Yes I am a Dave Ramsey fan and for a good reason. This book lays the foundation of achieving real financial security – very basic and yet very real.

3)      Pwede Na! The Complete Pinoy Guide to Personal Finance by Efren Cruz – This for me is the best personal finance book written by a Filipino. Very concise and yet full of information. What makes me like this book a lot is that it is written in the Filipino context.

4)      Pwede Na! The Complete Pinoy Guide to Retirement & Estate Planning by Efren Cruz – the follow-up book when you are ready to grow your money and plan your estate. I also like this book because it is factual, concise and written in the Filipino context.

5)      Millionaire Next Door — by Thomas J. Stanley and William D. Danko. This is an iconic book that discusses the behavior of Millionaire in the USA. It is not only insightful, it will actually shatter many of our misconception on wealth and wealth accumulation. I particularly like this book because it is based on solid research. This is a good financial behavior book that may help you make a paradigm shift.

6)      Automatic Millionaire by David Bach — this book by a best-selling author gives you an overly simplistic view on achieving wealth and yet it is effective in its message that in eating an elephant, we need to do it one bite at a time. Simple, practical and sensible. If you think you can never be wealthy, read this!

7)      Money Matters by Larry Burkett — Financial counselling is the most effective route toward achieving financial security but many do not have access to good financial counsellors or advisors. Money Matters is a form of counselling book and I like the question-and-answer format. The questions are very practical and real, not superfluous or ambivalent. The answers of Mr. Burkett are successful in providing advice in an emphatic way; yet, you will find that his answers have sound financial grounding.

8)      Till Debt Do Us Part by Chinkee Tan — another book written by a local author that I highly recommend. Chinkee’s book deals with an issue that plagues many Filipinos and yet one that is hardly discussed openly. The author successfully convinces the reader that debt is not a good thing and yet it gives us hope that being truly debt-free is within the reach of the average Pinoy. I like the practical steps in finding a solution to the debt trap written specifically for the Pinoy psyche. Chinkee has written many best-selling books but Till Debt Do Us Part remains to be my favorite.

9)      The Richest Man in Babylon by George Samuel Clason – A former boss of mine gave me this book in 1994 and probably the first finance book I ever read. I did not read it immediately as I am not fond of fiction but boss insists I read this one. The writing style was great but the message of the book was even greater. It’s all about doing the right things and very fundamental in nature.  This book is full of financial wisdom.

10)   The Bible – Yes, the written word of God is also an awesome finance book. Did you know that the offers 500 verses on prayer, less than 500 verses on faith, but more than 2,000 verses on money and possessions. 16 of the 38 parables were concerned with how to handle money and possessions and Jesus talked a great deal about money. The wisdom you will get from reading the word of the Lord will not only make you a better believer, it will also make you a better steward. Pick up the Bible and experience it for yourself.

There are many more books you can read and I’m sure there are those that will be your personal favourites. Just remember when reading a book – pick up the good things and discard that bad ones as no book is perfect; except the Bible.

Happy reading!

Got questions? Go ask! Send via Facebook, Twitter or email.

“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.” – James W. Frick

One of the most common questions I ask all my financial counselling session is this – ‘how do you spend your money’? The first things we need to establish is reviewing the cash flow statement. Looking at the expenses gives me a quick look at the financial situation of a person and most of the time, I’m pretty dead on.

The cardinal rule of being wealthy is this – “Spend less than what you earn and invest the difference.” The first and most difficult hurdle is often the spending less part. I’ve always believed that there are only two forms of an expense – its either a need or a want. Lo and behold, most people I know (me included) had a problem having a healthy cash flow are those who have difficulties controlling their ‘want’ expenses. In extreme cases, I’ve witnessed some people bring down their ‘need’ spending just to maintain their ‘wants’ – yikes!

The prudent thing to ensure we will have a healthy cash flow (where inflow of cash is far bigger than its outflow) is for us to be sensible in the way we spend. There’s really nothing wrong in spending on ‘wants’ but when those spending is causing you to have a very unhealthy cash flow or worse, being in debt, it’s time to STOP.

Our income is always finite therefore we must be very wise in the way we spend it. Priorities should be clear, communication between spouses and between children should be open so that everyone in the family will understand about priorities in the family income. I implore parents, specially fathers to take a strong lead role in coming up with a healthy family finance so there will be peace and harmony.

I strongly believe that we have the power to curb our wants. We are all rational and logical – its time our finances reflect our real priorities.

A patient man has great understanding, but a quick-tempered man displays folly. – Proverbs 14:29, NIV

“Money, most common of temporal things, involves uncommon and eternal consequences. Even though it may be done quite unconsciously, money molds people – in the process of getting it, of saving it, of using it, of giving it, of accounting for it. Depending upon how it is handled, it proves a blessing or a curse to its possessor; either the person becomes master of the money, or the money becomes master of the person.”

– David McConaughy