Hand-picked quotes about money from the best non-fiction books

Poverty is simply having more problems than solutions. Poverty is caused by a person’s being overwhelmed by problems he or she can’t solve.

We all do crazy stuff with money, because we’re all relatively new to this game and what looks crazy to you might make sense to me. But no one is crazy—we all make decisions based on our own unique experiences that seem to make sense to us in a given moment.

Bubbles form when the momentum of short-term returns attracts enough money that the makeup of investors shifts from mostly long term to mostly short term.

There are trillions of ways to make more money because there are trillions of, if not infinite, problems to solve.

Ultimately, it is not the asset that makes you rich. Information makes you rich... or poor.

The biggest single point of failure with money is a sole reliance on a paycheck to fund short-term spending needs, with no savings to create a gap between what you think your expenses are and what they might be in the future.

Money is multiplied in practical value depending on the number of W’s you control in your life: What you do, When you do it, Where you do it, and with Whom you do it. I call this the “freedom multiplier.”

People with enduring personal finance success—not necessarily those with high incomes—tend to have a propensity to not give a damn what others think about them.

But if something has 95% odds of being right, the 5% odds of being wrong means you will almost certainly experience the downside at some point in your life. And if the cost of the downside is ruin, the upside the other 95% of the time likely isn’t worth the risk, no matter how appealing it looks.

By the time a person hears a hot tip about a company’s new product or news that a company is in trouble, people on the inside and close to the inside have already traded on that information. The battle has already been won, and the average investor has lost.

Since I know a trend can reverse and change direction, I do not blindly invest for the long term. The Information Age is about change and I need to be flexible... not a robot.

Always remember that the process is more important than the goal.

In the Information Age, information alone can make you very rich.

If respect and admiration are your goal, be careful how you seek it. Humility, kindness, and empathy will bring you more respect than horsepower ever will.

The more you want something to be true, the more likely you are to believe a story that overestimates the odds of it being true.

Studying a specific person can be dangerous because we tend to study extreme examples—the billionaires, the CEOs, or the massive failures that dominate the news—and extreme examples are often the least applicable to other situations, given their complexity.

It’s a daily struggle against instincts to extend your peacock feathers to their outermost limits and keep up with others doing the same.

Money’s greatest intrinsic value—and this can’t be overstated—is its ability to give you control over your time.

The key is to realize that the process of solving those problems makes you rich. And once you start solving not only your own problems, but others’ as well, then the sky is the limit.

It should surprise no one that many of us are bad at saving and investing for retirement. We’re not crazy. We’re all just newbies.

My personal philosophy is that it is easier to change myself than to change the system. In other words, I am not a person who battles the winds that drive windmills.

I consider myself successful by the amount of money I make. The freedom that comes with that. And the experiences I'm living every day.

The odds of picking a job when you’re not old enough to drink that you will still enjoy when you’re old enough to qualify for Social Security are low.

Every job looks easy when you’re not the one doing it.

The new capitalism puts millions of workers’ money into investments that allow them very little control or leverage.

There is no reason to risk what you have and need for what you don’t have and don’t need.

Compared to generations prior, control over your time has diminished. And since controlling your time is such a key happiness influencer, we shouldn’t be surprised that people don’t feel much happier even though we are, on average, richer than ever.

If a VC makes 50 investments they likely expect half of them to fail, 10 to do pretty well, and one or two to be bonanzas that drive 100% of the fund’s returns.

Start thinking of income and expense in terms of monthly cash flow—dollars in and dollars out—instead of grand totals.

The first idea—simple, but easy to overlook—is that building wealth has little to do with your income or investment returns, and lots to do with your savings rate.

Two topics impact everyone, whether you are interested in them or not: health and money.

The more problems you solve, the richer you will become.

Happiness is a complicated subject because everyone’s different. But if there’s a common denominator in happiness—a universal fuel of joy—it’s that people want to control their lives.

A small amount of wealth means the ability to take a few days off work when you’re sick without breaking the bank. Gaining that ability is huge if you don’t have it.

Having a strong sense of controlling one’s life is a more dependable predictor of positive feelings of wellbeing than any of the objective conditions of life we have considered.

I simply want to know the rules and play by the rules. This does not mean I believe the rules are fair or equitable. They aren’t.

In a world where intelligence is hyper-competitive and many previous technical skills have become automated, competitive advantages tilt toward nuanced and soft skills—like communication, empathy, and, perhaps most of all, flexibility.

A bureaucrat’s job is to get their hands deeper in your pockets—legally—and your job is to have them take as little as possible—legally.

The ability to do what you want, when you want, for as long as you want, has an infinite ROI.

“It’s not whether you’re right or wrong that’s important,” George Soros once said, “but how much money you make when you’re right and how much you lose when you’re wrong.” You can be wrong half the time and still make a fortune.

Investors often innocently take cues from other investors who are playing a different game than they are.

Warren Buffett is a phenomenal investor. But you miss a key point if you attach all of his success to investing acumen. The real key to his success is that he’s been a phenomenal investor for three quarters of a century. Had he started investing in his 30s and retired in his 60s, few people would have ever heard of him.

Just because you invest or are self-employed, does not mean you are an investor or a business owner.

Entrepreneurs have two characteristics... ignorance and courage.

There’s only one way to stay wealthy: some combination of frugality and paranoia. Getting money is one thing. Keeping it is another.

Most of the middle class’s financial priorities are: Priority #1: Get a high-paying job. Priority #2: Make the mortgage and car payments. Priority #3: Pay bills on time. Priority #4: Save, tithe, and invest. Priority #4 should come first.

You can save just for saving’s sake. And indeed you should. Everyone should.

To enjoy life, you don’t need fancy nonsense, but you do need to control your time and realize that most things just aren’t as serious as you make them out to be.

A financially intelligent person does not want a big paycheck. A financially educated person would rather be paid royalties or dividends because taxes are lower on these types of income. A knowledgeable investor at least knows enough to invest for portfolio or passive income.

Inside every problem is a gem of wisdom, a gem that makes us smarter, stronger, and able to do better regardless of economic conditions.

In the world of money, there are two things investors invest for: capital gains and cash flow. In most cases, investing for capital gains is gambling, or speculation.

Many people get into trouble simply because they do not know the rules, ignore the rules, or break the rules. Know the rules!

A true capitalist is simply someone who recognizes a problem and creates a product or service to address that problem.

When it comes to the game of money, most people are playing—if they know they are playing at all—not to lose rather than playing to win.

The reason you do not count your money while you’re sitting at the table is because as long as you are at the table, your money does not belong to you. The moment you step away from the table, the money in your pocket is your money and you can count it.

Good investing isn’t necessarily about earning the highest returns, because the highest returns tend to be one-off hits that can’t be repeated. It’s about earning pretty good returns that you can stick with and which can be repeated for the longest period of time. That’s when compounding runs wild.

More than I want big returns, I want to be financially unbreakable. And if I’m unbreakable I actually think I’ll get the biggest returns, because I’ll be able to stick around long enough for compounding to work wonders.

There are books on economic cycles, trading strategies, and sector bets. But the most powerful and important book should be called Shut Up And Wait. It’s just one page with a long-term chart of economic growth.

Successful investing demands a price. But its currency is not dollars and cents. It’s volatility, fear, doubt, uncertainty, and regret—all of which are easy to overlook until you’re dealing with them in real time.

Being financially rich and having the ability to live like a millionaire are fundamentally two very different things.

If you want to be rich, become a customer of businesses that are dedicated to making you richer. For example, I am a long-term customer of a number of investment newsletters and financial magazines.

The highest form of wealth is the ability to wake up every morning and say, “I can do whatever I want today.”

This new capitalism is based upon feel-good economics. As long as a person’s net worth is going up, the illusion of prosperity, based upon debt, not production, continues. Who needs freedom when you’ve got things?

A smart investor knows the difference between facts and opinions. Generally a person who invests for capital gains is investing on an opinion. A cash flow investor invests for facts. If possible, a smart investor will invest using both opinion and facts, and invest for both cash flow and capital gains.

Intelligence is the ability to take information and make it meaningful.

Offer feedback or advice only if it’s asked for. Nothing infuriates people more than feedback they did not ask for... even if it’s feedback they know they need. As that ancient bit of wisdom goes, “Don’t teach pigs to sing. It wastes your time and it annoys the pig.”

Having more control over your time and options is becoming one of the most valuable currencies in the world.

Capitalists believe in producing a better product for a better price.

Being able to live well and still invest no matter how much you make requires a high level of financial intelligence.

Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort. They are so similar that you can’t believe in one without equally respecting the other.

There is little correlation between investment effort and investment results.

People make financial decisions they regret, and they often do so with scarce information and without logic. But the decisions made sense to them when they were made.

Bill Gates once said, “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”

The problem is, after paying their expenses, most people don’t have any money left to do save/invest. The reason is because they consider saving, tithing, and investing as a last priority.

The reason most financial advisors say that higher returns mean higher risk is simply because they sell only investments that allow very little control.

Professional investors don’t diversify. As Warren Buffett says, “Diversification is a protection against ignorance. Diversification is not required if a person knows what they are doing.”

Exercise is like being rich. You think, “I did the work and I now deserve to treat myself to a big meal.” Wealth is turning down that treat meal and actually burning net calories. It’s hard, and requires self-control. But it creates a gap between what you could do and what you choose to do that accrues to you over time.

The value of my apartment house is based upon the rent my tenants pay. In other words, the true value of the property is the value my tenants think the property is worth. If I can increase the perceived value of my property to my tenants, I, not the market, have increased the value of the property.

Golf is not my game. Golf is what I do for fun. Business, investing, and making money is my game. I love my game.

In this new age, information enabled the coordination of resources at a much quicker and higher level than ever before. It is this coordination that creates the super-rich.

The definition of leverage is doing more with less. A person who puts money in the bank, for example, has no leverage.

If you want to become richer, it is important to continually upgrade your environment. This does not mean running out and buying a big house, flashy cars, new clothes, and getting into piles of bad debt. What I mean is to consciously and intelligently challenge yourself to improve your standard of living by increasing your financial intelligence.

If you can free your time and location, your money is automatically worth 3–10 times as much.

Do not aim to be coldly rational when making financial decisions. Aim to just be pretty reasonable. Reasonable is more realistic and you have a better chance of sticking with it for the long run, which is what matters most when managing money.

Do you know how hard it is to maintain a long-term outlook when stocks are collapsing?

“It’s not that I want money. It’s the fun of making money and watching it grow.”

Wealth is just the accumulated leftovers after you spend what you take in.

The first rule of compounding is to never interrupt it unnecessarily.

The problem with arguing with an idiot is that there are soon two idiots: you and the person you’re arguing with.

Lifestyle Design is not interested in creating an excess of idle time, which is poisonous, but the positive use of free time.

Some of the appreciated value of a house is due to the decline in value of the dollar. In other words, the house is not going up in value. It just takes more dollars to buy the same house because the government and central banks keep injecting more funny money into the system to keep the economy afloat.

Have the courage to be open to feedback. If you want to improve, seek more feedback. This is why coaches and mentors are important to successful people. Successful people seek more feedback.

Important financial decisions are not made in spreadsheets or in textbooks. They are made at the dinner table. They often aren’t made with the intention of maximizing returns, but minimizing the chance of disappointing a spouse or child.

Past a certain level of income, what you need is just what sits below your ego.

“If only I had more money” is the easiest way to postpone the intense self-examination and decision-making necessary to create a life of enjoyment—now and not later.

If you don’t solve a problem, you will have that problem all your life. Problems rarely solve themselves.

«People having control over their time tend to be happier in life» is a broad and common enough observation that you can do something with it.

You must come to terms with the fact that problems will never go away.

“The only way to win in a Las Vegas casino is to exit as soon as you enter.” That’s exactly how the game of trying to keep up with other people’s wealth works, too.

A healthy environment is one that offers feedback. Life is constantly giving you priceless information if you are willing to receive it, and most of the time the feedback is free. Every time you open your pay envelope and see how much is lost to taxes, this is feedback. If your creditors are calling, demanding payment, this is feedback. If you are working harder and not earning enough, this is feedback.

Independence, to me, doesn’t mean you’ll stop working. It means you only do the work you like with people you like at the times you want for as long as you want.

If a government agency is efficient and saves money, the agency is punished, instead of rewarded, by having next year’s budget reduced. To avoid this, most government agencies spend all their budgeted money, even if they do not need to. This means costs keep going up and the chances of a government budget surplus are slim to none.

There has been too much greed, misinformation, and corruption running our businesses, governments, and schools.

Getting money requires taking risks, being optimistic, and putting yourself out there. But keeping money requires the opposite of taking risk. It requires humility, and fear that what you’ve made can be taken away from you just as fast.

The difficulty in identifying what is luck, what is skill, and what is risk is one of the biggest problems we face when trying to learn about the best way to manage money.

Another reason many people fail in their process is they cannot live without instant gratification.

Every decision people make with money is justified by taking the information they have at the moment and plugging it into their unique mental model of how the world works.

Napoleon’s definition of a military genius was, “The man who can do the average thing when all those around him are going crazy.”

History is mostly the study of surprising events. But it is often used by investors and economists as an unassailable guide to the future.

You might think you want an expensive car, a fancy watch, and a huge house. But I’m telling you, you don’t. What you want is respect and admiration from other people, and you think having expensive stuff will bring it. It almost never does—especially from the people you want to respect and admire you

Everyone agrees that we need to share the wealth, as long as it is your wealth, not their wealth.

The universe doesn’t conspire against you, but it doesn’t go out of its way to line up all the pins either.

But life isn’t any fun without a sense of enough. Happiness, as it’s said, is just results minus expectations.

My own theory is that, in the real world, people do not want the mathematically optimal strategy. They want the strategy that maximizes for how well they sleep at night.

Two of the main reasons I do not like mutual funds is that banks do not lend money on them and insurance companies will not sell me insurance against catastrophic loss if the market crashes—and all markets crash.

We should avoid the extreme ends of financial planning. Assuming you’ll be happy with a very low income, or choosing to work endless hours in pursuit of a high one, increases the odds that you’ll one day find yourself at a point of regret.

The world is filled with people who look modest but are actually wealthy and people who look rich who live at the razor’s edge of insolvency. Keep this in mind when quickly judging others’ success and setting your own goals.

In the Information Age, knowledge is the ultimate leverage. Information is the single greatest asset of this era.

Investing for cash flow is investing for income. If I put savings in the bank and receive 5 percent in interest, I am investing for cash flow.

Government bureaucracies are designed to operate on a budget deficit. A budget surplus is an expense.

When more money does not solve a problem they create new taxes with clever names. Since the problems only get bigger, the percentage we pay in taxes only goes up.

The problem with letting bureaucrats and bankers manage your money is they think your money is their money.

We tend to judge wealth by what we see, because that’s the information we have in front of us. We can’t see people’s bank accounts or brokerage statements. So we rely on outward appearances to gauge financial success. Cars. Homes. Instagram photos.

Focus less on specific individuals and case studies and more on broad patterns. You’ll get closer to actionable takeaways by looking for broad patterns of success and failure. The more common the pattern, the more applicable it might be to your life.

It is far more lucrative and fun to leverage your strengths instead of attempting to fix all the chinks in your armor.

How you behaved as an investor during a few months in late 2008 and early 2009 will likely have more impact on your lifetime returns than everything you did from 2000 to 2008.

Sunk costs—anchoring decisions to past efforts that can’t be refunded—are a devil in a world where people change over time. They make our future selves prisoners to our past, different, selves. It’s the equivalent of a stranger making major life decisions for you.