Have you ever talked with someone about money. I don’t mean talk about products like Mutual funds, Insurance or listen to lecture by parents on saving money,buying a house etc but talk about your attitude towards money, your feelings about personal finance, your financial dreams. The book,11 Principles To Achieve Financial Freedom: Master Your Financial Life 3, is coaching session between Sam, an IT professional, and his financial coach. In simple language, it lays down foundation to achieve Financial Freedom.
About the Book: 11 Principles To Achieve Financial Freedom
Sam is confused, direction less when it comes to the world of finances. In his own words
“I was never taught about money in school or college. I learnt a few things from my parents and when my company asks to show tax saving investment proof, I generally follow my colleagues and relative’s advice, I have never studied any financial product in detail until date, I really find the number frustrating and I put my signature wherever asked. I think I have invested money in all wrong products and now I feel I will never be able to produce wealth in life. I am worried in the area of money and because of that I am having a very disturbing recurring dream all the time that I am going to miss my train. My wife and I both stay busy with work schedule and we are left with no time for our finances”
Have such thoughts also crossed your mind? Do you see yourself in Sam’s shoes?
He meets the coach who questions him, makes him think, guides him for example when he meet Financial coach for the first time, coach asks him How do you perceive personal finance? to which Sam replies
I see personal finance like a jigsaw puzzle. When someone starts to discuss about personal finance I feel like running away from that place. To me personal finance is all about numbers,calculations and complex financial products. I get many SMS,emails and calls everyday to buy different financial products and that pushes me away from making investments. Very honestly, with so much over communication and over selling I am a confused investor who really does not know where to invest. I feel everyone is making money from my money.
Sam then joins financial coach’s program called 90 Day Money Game that consists of 11 levels given below. These sessions helps him to change his attitude about money, relationship with money, his approach to personal finance and his life. Sessions are conversation between coach and Sam in very simple English supported with stories, anecdotes, quotes, questions, tables. At the end of every session or chapter there is summary called as Words of Wisdom and Assignments to complete. He starts to enjoy the process of wealth creation, taking interest in financial matters and creating wealth. The 11 levels are :
|
Level 1 |
Laying a strong foundation |
|
Level 2 |
Creating new relationship with money |
|
Level 3 |
Investigation begins |
|
Level 4 |
The game changers |
|
Level 5 |
Don’t set goals, set yourself |
|
Level 6 |
Create system to create wealth |
|
Level 7 |
Mastering game of financial freedom |
|
Level 8 |
Active income vs. passive income |
|
Level 9 |
How wealth is created |
|
Level 10 |
How to increase your income |
|
Level 11 |
Make each year your best financial year |
Insights from the book
The sessions between the financial coach and Sam are thought provoking (at time eye opener) for example I was zapped when I read Coach explaining Sam that There is no such thing as perfect financial life. (Level 1 Laying a strong foundation)
Take the game of cricket. Before the match starts the players don’t strive for perfection or look for certainty and that is how they are able to focus on the game. That is what helps them to focus on the game. They don’t know what is going to happen in the next moment of game. Just by playing you get better, even if you play badly.
To create wealth you have to slow down and focus on those actions that matter to you. Wealth creations is all about taking one action at a time.
Financial coach questions Sam on Why does a daily wage worker earn money? Why do you earn money? He asks Sam to Choose why you want to earn money Financial freedom or basic needs. (Level 2 Creating new relationship with money) . He makes Sam wade through questions like Why is my financial life not the way I want it to be? Why am I unable to produce desired wealth? Am I a spender or a saver? What money lies do we tell ourselves?
- I don’t have time
- I can’t say NO to my friends and relatives who come to sell me financial products.
- I don’t know why my financial life is complex.
- I earn well but at the end of month I don’t know where it all goes.
He also makes him realize that health is true wealth. To Enjoy your wealth you need to invest in health.
He makes Sam realize that Wealth and choices go hand in hand. Your current financial life is a result of the choices you made in past. Just like farmer, One needs to put focus on putting the right seeds rather than focussing on needs. He then help Sam create a system to create wealth. (Level 6 Create a system to create wealth)
Future is an illusion and I should not worry about what is going to happen after 30 years, I just have to play fully, follow a system and enjoy the process of wealth creation. The game of wealth creation becomes easy when you divide your financial goals into outcome wealth goals and process wealth goals.Coach explains
Let’s assume I want to have 12 clients a year by which I am able to do X turnover. This is my outcome wealth goal that I will be acheiving at the end og the year. Now I have to break this into process wealth goals so if I want to have 12 clients a year I will be making on an average 1 client a month and for generating 1 client a month I will have to have conversation with 5 people each month. So talking to 5 people each month is my process goal.
If I focus on getting 12 clients in the year every day, it fills my life with worries. I don’t want 12 clients right now. I want 12 clients at the end of the year so it becomes my outcome goal. It is not in my hands.
He tells Sam about two key traits in successful investors
- They manage their own money well with the help of a system
- They work on self improvement and keep refining their system.
Helpful Practical tips, Questions and Tables in Book
The book is not only full of practical financial gyan (it all not about preaching,teachong) there are some practical tips for example how to clean your financial portfolio as Financial clutter leads to Product Jam.
| Parameter | Answer (yes or no) |
| Do I understand how this product works | |
| Am I clear about purpose of the product?Why do I have this product? | |
| Lock in period of the product | |
| Clarity about return the product can fetch you | |
| Expense or cost involved | |
| Tax implication |
- I really don’t have time to manage money
- I can give money to some but I can’t ask that easily.
- I do not allocate any dedicated time each week to read about personal finance
- I do not have any kind of passive income in my life
- I am not able to find time for my hobbies
Tables : Cash flow table which echoes the thought there is no better way to powerfully manage your money than to be completely aware of where it is coming from and where it is going (Level 9 : How wealth is created)
| Income | Yearly Amount | Expenses | Yearly Amount |
| Income from Salary | Household expenses | ||
| Income from Business | Utilities/Bill Payment | ||
| Income from Other Sources | Entertainment/Outings | ||
| Travelling | |||
| Investments/Premiums | |||
| Education/Health expenses | |||
| Other expenses | |||
| Total income | Total expenses | ||
| Surplus (Total income – Total expenses) | = |
Should you buy the book
Do you buy any books? Do you personal finance books or magazines? Often Many people spend money on buying gadgets or entertainment but hesitate to buy book worth Rs 500 or Rs 1000. As in the book the coach reminds Sam of words of Jim Rohn “It isn’t what the book costs; it’s what it will cost if you don’t read it”. It is important to become a student of wealth and design your reading program as an investor. It is the art of learning that is transforming
I would recommend reading the book. Personal finance can’t get simpler than this. I have already read it twice and would be visiting it again and again( and discussing it in my blog posts). The important take away I had from the book were :
- There is no such thing as perfect financial life.
- Focus on process not on outcome.
- Make wealth creation a game or hobby.
- Develop a system for wealth creation and keep on refining it
- Maintain a wealth journal,
This book is 3rd one from jagoinvestor team . They have also published 2 other books in past . We have reviewed Book Review-JagoInvestor:Change your relationship with money now called 16 personal finance principles every investor should know. You can look at their books page to get all information about the books. They are also doing Personal finance show Plan F on CNBC-TV 18 about which you can read at Personal Finance Shows in India : Smart Money, Plan F
Related articles :
- Personal Finance Books For Adults And Young Adults
- Book Review-JagoInvestor:Change your relationship with money
- Books on Money for Children
- Personal Finance Shows in India : Smart Money, Plan F
Do you read personal finance books? If yes which one did you like and why? What efforts are you making at improving your personal finance information, habits?
Thank you Kirti for writing such a wonderful review of my book. Your review is special and means a lot to me and manish. Your encouragement and support matters!
Thanks for commenting Nandish. It’s a great book and this was the least I could do. I have learnt so many things. Wish more and more people read it and benefit from it.
Thank you Kirti for writing such a wonderful review of my book. Your review is special and means a lot to me and manish. Your encouragement and support matters!
Thanks for commenting Nandish. It’s a great book and this was the least I could do. I have learnt so many things. Wish more and more people read it and benefit from it.
People will say that why waste money on books read it once and then return it but I strongly believe that a book is a mans best friend. Only when you have a copy with you can you read again and again and clarify your doubts. Experimenting with own money is a big risk but learning from an expert and then trying will reduce the risk too. I feel its a must buy for those who wish to make money and investing a part of their life.
Well said but sadly people will spend money on buying a pizza than buying a good book.
People will say that why waste money on books read it once and then return it but I strongly believe that a book is a mans best friend. Only when you have a copy with you can you read again and again and clarify your doubts. Experimenting with own money is a big risk but learning from an expert and then trying will reduce the risk too. I feel its a must buy for those who wish to make money and investing a part of their life.
Well said but sadly people will spend money on buying a pizza than buying a good book.