Becoming Financially Responsible

  • Essential lessons for financial stability
  • Financial Lessons from Experts: Book Summaries
  • Financial Stability: Everything you need to know (almost)
  • The best philosophies for financial stability

NB *I am not qualified, nor am I authorised to give financial advice.*

Almost everyone is concerned with money at some stage of their career. However, there’s no point working harder, taking on more responsibility and earning more if you don’t actually feel the benefit of it at any stage. By the way, I’m not merely talking about getting richer, I’m talking about increasing your net worth and sustaining it into the future. Before I go any further, I have to mention that of course not everyone wants to be wealthy, which is fine, but everyone wants to be financially stable.

If you are interested in a discussion on money and happiness, please read an article I wrote for here

This post is about becoming financially responsible and making the best use out of your income. I’m not a financial expert and don’t pretend to be one, but I have summarised some key philosophies and strategies from four of the best sources around (in my opinion).

Some key concepts in this post:

  • Working for money, making money work for you, or both!
  • Working harder and longer versus becoming more valuable to the economy.
  • The principles of compounding and living within your means.
  • A pain-free way to save more money without sacrificing your standard of living in any way.
  • The single best way to have financial security and stability regardless of the economic environment.
  • Becoming a Linchpin.

*NB: I don’t like the stock market as an investing option because I believe that it’s very difficult for most people to play the market in a financially responsible way. When I was finishing my degree in International Business, specialising in finance in 2008, the finance textbooks were telling us that bank shares were the most stable shares in the market, whereas all of the empirical evidence said otherwise. The theory was right until it was wrong - the market is not controlled by predictable forces entirely, but also by speculation, which is highly unpredictable, and therefore financially risky. 

Furthermore, Daniel Kahneman’s book ‘Thinking Fast and Slow’ cites results from a quantitative study of a financial trading company - he found that they weren’t actually making any consistent profits for their clients. "The consistent correlations that would indicate differences in skill were not to be found. The results resembled what you would expect from a dice-rolling contest, not a game of skill”. He outlines this in detail in his book (Thinking Fast and Slow, P208), so check it out for more detailed information. Of course there are exceptions to this rule, but I won’t assume that someone reading this blog would realistically be able to become that exception.

Selected Notes from Book 1: Richest man in Babylon by George S. Clason

This is a good book to read or listen to (if you’re into audiobooks). Here is the summary in 7 points - but remember that this is just a summary and it’s always important to get the full text so that you can get the lessons fully. Also, remember that we need to hear good lessons repeatedly and it’s even better if they are attached to stories - both of these help us to remember the lessons and implement them in our own lives.

  1. The law of compounding. The money you save works for you. "Each cent you earn then becomes your slave". This certainly is not a ‘get rich quick scheme’, but it’s very effective over time. Therefore, the earlier you do this, the better.
    • Remember that money is of a prolific generating nature. Money can beget money, and its offspring can beget more.” – Benjamin Franklin.
    • A part of all you earn is yours to keep.” According to the philosophy of the book, it should be not less than a tenth of your income no matter how little you earn, but it can be as much as you can afford. This sounds simple but not everyone does it. The biggest argument against this is that people don’t earn enough money to do this or that they have debt to pay off first - or both! I think you should believe whatever you want to believe, but know that the most successful people in the investing world subscribe to the compounding strategy. They suggest that even if you have bills, not much money or a lot of debt, if a new tax was introduced - you’d kick and scream, you’d be angry, you’d protest, but in the end you’d still cough up the money. So why not pay yourself this money first, at least it’s going to a good place - your pocket! Make your money work for you.
    • Budget your expenses so that you may have money to pay for your necessities, to pay for your enjoyments and to gratify your worthwhile desires without spending more than nine-tenths of your earnings.
  2. Live within your means. This is a very clear and easy to understand message. We must have a lifestyle that we can afford or find ways to generate more income to facilitate the lifestyle that we have. The alternative means that we will go into debt (or further into debt).
  3. Invest in yourself. It's paramount to invest both time and money in your own education. “Formal education will make you a living. Self-education will make you a fortune."
  4. Track your wealth. “What get’s measured, gets managed” - Peter Drucker.
  5. Have a retirement plan. These days, most people will retire around the age of 65 and will probably need to have enough money for another 30 years of living.
  6. Understand that your home is your biggest expense. Whether you have a mortgage or are renting, your home should be your biggest expense. If something else is bigger than that, you need to reassess where you’re spending your money.
  7. Remember that insurance protects your wealth. Make sure to have insurance as a backup plan if your income stream stops for whatever reason. 

Selected Notes from Book 2: Money Master the Game by Tony Robbins

Written by Tony Robbins, this book promises to be the ultimate guide for investing and money management. It contains never before seen strategies from the best investors in the world. Robbins says that it’s his personal response to the injustices that happened through the world financial crises of 2008. It’s a pretty heavy read at times with a lot of technical information, but it needs to include all of the those points for credibility. At the same time, he also captures a lot of the philosophies around investing, which I found much more enjoyable. As with the other books - you can read the summary and understand the main points, but it doesn’t compare with the complete book which uses examples, reinforces the main messages and elaborates on all the different arguments that people put forward for not following its advice. 

  1. Master the art of compounding - the sooner the better! Even if you start with a tiny amount, it’s a great discipline to build on. 
  2. Make safe investments - be extremely risk averse. Always look for asymmetrical benefits in terms of risks versus returns. This is what the best investors in the world do. Contrary to popular belief, they are not risk-takers, they are extremely risk averse - that’s why they have kept their money for so long. "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1" – Warren Buffett
  3. Learn from the best investors and the strategies that they use. We don’t need to recreate the wheel here. If you want to know more, check out the detailed examples in the chapters on each of them towards the end of this book. 
  4. Make effective use of your taxes and make sure you’re paying the right rates. Not everyone understands taxes, but you should at least hire someone who does. 
  5. Whenever your income or salary increases, instead of spending the difference, try to save it. This way, your quality of life won’t have suffered but your savings will increase. It’s a pain free way to augment your savings.
  6. Invest in yourself and your own financial education - I recommend reading the books here to start. They contain some of the best financial information, tips and strategies that I have ever come across. I specialised in finance in college, but I certainly am not a financial expert, therefore, I am not qualified to give such advice.

Selected Notes from Book 3: Linchpin by Seth Godin

I came across Seth Godin’s book ‘Linchpin’ recently and I strongly recommend it for anyone interested in a strong career. It’s a game changer as far as I am concerned. It’s about being something that we all inherently are: artists. Nope - this doesn’t mean artist simply in terms of someone who paints. This is anyone who is creative, who can generate new ideas and solve interesting problems. This applies to everyone. If you feel you aren’t creative now, that’s  because either:

1) you don’t recognise it in yourself or 2) you’ve lost it at some stage over time. But it’s there.

Here are a couple of big ideas from the book:

  1. Solve interesting and complex problems. We can’t always attempt to outwork the competition because often the competition will be working in parts of the world where the cost of labour is significantly less. Therefore, they can do the same work for less, so trying to outwork them will be fruitless. This means that we should continuously look for new ways of creating value in the organisations where we work and this the key to the future economy.
  2. Become the individual in the company who provides more value and solves more problems than anyone else. This way it becomes very difficult to replace you regardless of the economic environment. Find out what the company needs on a regular basis and endeavour to be the person to help solve those challenges. 
  3. Give people gifts and don’t require reciprocation. I really like this idea because of the reaction you get when you do it. In a society where everything has a price, it can be refreshing to receive some small gift from someone and to know that nothing is expected in return. It makes people feel good and everyone likes to feel good.
  4. Share your expertise - it shows the wealth of your knowledge. Of course, some people will always be afraid that if they share too much knowledge that their clients won’t need them anymore. In my view, considering we live in an age of instant information available at the touch of a button, people are looking for much more than information. In general, I find that the more you share, the more people want from you. Acquiring expert knowledge will certainty take time - however I believe it is one of the most important career decisions you can make. 
  5. Ship on time. This is the idea that projects will not always be perfect (like this blog!) but they need to be done and delivered on time. Ideas aren’t the hard part - It’s shipping that’s difficult. Get it done and get it done on time!

Selected Notes from Book 4: Rich Dad Poor Dad by Roger Kiosaki

  1. Focus on accumulating appreciating assets (not depreciating assets) and aim at making them increase in value. 
  2. For most people, their profession is their income. For rich people, their assets are their income.
  3. Buy luxuries last, not first. To buy something, first generate enough cash flow from assets to cover these. 
  4. Excess cash flow generated by assets should be reinvested into other income generating (capital appreciating) assets.
  5. Do not simply aim for more income, aim for more assets.
  6. Keep your expenses low and reduce your liabilities.
  7. Find a job where you can learn new skills and knowledge while getting paid to do so.
  8. Do not just buy investments. It’s important to invest in learning about investing so that you make the right choices. The books mentioned in this blog are a good place to start.
  9. Find people who are the best in their field at what you want to do and model them.
  10. Failure inspires winners and defeats losers. When something does not work out the way you wanted, try something different.
  11. Be in control over your emotions. Do not let fear or greed dictate your decisions. 
  12. Saying "I can't afford it" shuts down your brain. Asking "How can I afford it?" opens up your brain and triggers your financial genius to come up with an alternative solution.

Hope you enjoyed this and thanks for reading! 


Godin, S., Hagy, J. and MacLeod, H. (2011) Linchpin: Are you indispensable? New York: Penguin Group (USA).

Hill, N., Babylon, G.C.S. and Clason, G.S.S. (2007) Think and grow rich by Napoleon Hill AND the richest man in Babylon by George S. Clason. United States:

Kahneman, D. (2011) Thinking, fast and slow. New York: Farrar, Straus and Giroux.

Kiyosaki, R.T. (2011) Rich dad, poor dad: What the rich teach their kids about money - that the poor and middle class do not! Scottsdale, AZ: Perseus Distribution Services.

Robbins, A. and Robbins, T. (2014) Money master the game: 7 simple steps to financial freedom. United States: Simon & Schuster.