Companion article to One Thousand Gurus Podcast Special Episode #60
The Books That Changed How I Think About Money
Over the past decade, I’ve read dozens of personal finance books. Some were helpful, many were repetitive, and a few were downright misleading. But three books stood out as absolute game-changers—books that I wish someone had handed me when I first started my financial journey.
Today, I’m going to share the most powerful insights from these three books and show you how they work together to create a complete personal finance system:
- I Will Teach You To Be Rich by Ramit Sethi = The SYSTEM (the how-to mechanics)
- The Psychology of Money by Morgan Housel = The MINDSET (the behavioral foundation)
- The Simple Path to Wealth by JL Collins = The PHILOSOPHY (the long-term strategy)
By the end of this article, you’ll have a complete roadmap for building wealth—not just tactics, but the psychology and philosophy to back them up.
Why These Three Books?
Here’s what makes this combination so powerful: Most financial advice focuses on only one dimension. You’ll get books that are all tactics (“open this account, buy that fund”) or all philosophy (“money is energy, abundance mindset”).
But real financial success requires three things working together:
- The mechanics – You need a system that actually works
- The mindset – You need to understand why you make the money decisions you do
- The strategy – You need a long-term plan that compounds over decades
These three books, when read together, give you all three dimensions. Let me show you how.
PILLAR 1: The Foundation – Getting Your Financial House in Order
The Problem: Most People Have No System
The biggest issue I see with personal finance isn’t that people don’t want to save money—it’s that they rely on willpower instead of systems. They tell themselves “I’ll try to save more this month” or “I should invest something soon.”
Willpower fails. Systems succeed.
Ramit Sethi’s Automated Money System
In “I Will Teach You To Be Rich,” Ramit Sethi introduces what he calls the Conscious Spending Plan. This isn’t a budget in the traditional sense. Instead, it’s a system that automates your money so you can spend extravagantly on what you love while cutting costs mercilessly on what you don’t care about.
Here’s the breakdown he recommends:
- 50-60% – Fixed costs (rent, utilities, debt payments)
- 10% – Savings goals (emergency fund, wedding, house down payment)
- 5-10% – Investments (retirement accounts, index funds)
- 20-35% – Guilt-free spending (restaurants, hobbies, travel, whatever you want)
The magic happens when you automate everything. Here’s how:
The 6-Week Setup:
Week 1-2: Optimize your credit cards and bank accounts
- Get a high-yield savings account (currently 4-5% APY vs. 0.01% at most banks)
- Choose 1-2 credit cards with the best rewards for your spending patterns
- Close accounts you don’t need
Week 3-4: Open investment accounts
- Contribute to your 401(k) up to the employer match (free money)
- Open a Roth IRA if you’re eligible
- Consider a taxable brokerage account for additional investing
Week 5: Automate your infrastructure
- Set up automatic transfers on payday: Checking → Savings → Investments
- Automate all bill payments
- Create calendar reminders for quarterly check-ins
Week 6: Start investing automatically
- Set up automatic investments into index funds
- Increase contribution percentages annually
The 85% Solution: Done Is Better Than Perfect
One of Ramit’s best concepts is the “85% solution.” Don’t wait until you have the perfect investment strategy or the perfect budget. Start with something that’s 85% right, and you’ll be ahead of 99% of people who never start at all.
Key Insight from “The Psychology of Money”:
Morgan Housel backs this up with behavioral science: “Financial success is not a hard science. It’s a soft skill where how you behave is more important than what you know.”
The system works because it removes emotion from the equation. You’re not making daily decisions about whether to save or invest. Your money flows automatically to where it needs to go.
The Big Takeaway: Your financial system should be boring and automatic. If there’s too much excitement in your personal finance strategy, you’re probably doing something wrong.
PILLAR 2: The Mindset – How to Think About Money
Why Smart People Make Dumb Money Decisions
This is where “The Psychology of Money” by Morgan Housel becomes invaluable. The book is filled with insights about why we behave the way we do with money—and why traditional financial advice often fails.
No One’s Crazy
Different generations experienced different economic realities. Someone who lived through the Great Depression thinks differently about money than someone who came of age during the dot-com boom. Understanding this helps you:
- Have empathy for how others handle money
- Recognize your own biases based on your formative experiences
Luck and Risk Are Siblings
Success isn’t purely about skill, and failure isn’t purely about mistakes. Bill Gates went to one of the only high schools in the world with a computer in 1968. That’s incredible luck. But his friend Kent Evans, who was just as talented, died in a mountaineering accident before they could build Microsoft together. That’s risk.
The lesson: Be humble about success and compassionate about failure—both yours and others’.
Getting Wealthy vs. Staying Wealthy
This distinction changed how I think about investing:
- Getting wealthy requires taking risks, being optimistic, and putting yourself out there
- Staying wealthy requires humility, frugality, and paranoia about losing what you’ve built
Most advice focuses only on getting wealthy. But the skills that make you rich are different from the skills that keep you rich.
Wealth Is What You Don’t See
Here’s one of my favorite passages from the book:
“When you see someone driving a nice car, you rarely think, ‘Wow, the guy driving that car is cool.’ Instead, you think, ‘Wow, if I had that car people would think I’m cool.'”
Wealth is the nice car you didn’t buy. Wealth is the jewelry you didn’t purchase. Wealth is sitting in an investment account, compounding quietly while you drive a reasonable car and live in a modest house.
This is the paradox: The only way to build real wealth is to not look wealthy.
Room for Error: The Most Important Part of Every Plan
Housel emphasizes that “the most important part of every plan is planning on your plan not going according to plan.”
This means:
- Having a 6-12 month emergency fund
- Not investing money you’ll need in the next 5 years
- Building margin into your budget
- Never using leverage (borrowed money) to invest
The Goalpost That Never Stops Moving
Perhaps the hardest financial skill is getting the goalpost to stop moving. There’s always someone with more. There’s always a bigger house, a fancier car, a more exotic vacation.
The antidote: Define “enough” for yourself. Then ruthlessly protect that definition from comparison and lifestyle inflation.
The Power of Compounding (And Why You Can’t Feel It)
Warren Buffett’s net worth is $84.5 billion. But here’s the kicker: $84.2 billion of that came after his 50th birthday. $81.5 billion came after he turned 60.
His skill is investing. But his secret is time. He started at age 10 and never stopped.
The problem with compounding is that it’s counterintuitive. The first decade feels like nothing is happening. Then suddenly, in year 30 or 40, the numbers explode.
As Housel writes: “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.”
The Big Takeaway: Wealth isn’t about what you drive or wear. It’s about what you’ve saved and invested that nobody can see.
PILLAR 3: The Strategy – Building Long-Term Wealth
Simple Beats Complex Every Time
After reading dozens of investing books and testing various strategies, I’ve come to a profound realization: The simple approach beats the complex approach almost every single time.
This is where “The Simple Path to Wealth” by JL Collins becomes your bible.
The Path to Wealth Is Brutally Simple
JL Collins distills everything down to these core principles:
- Avoid debt (especially high-interest consumer debt)
- Spend less than you earn
- Invest the surplus in VTSAX (or equivalent total stock market index fund)
- Avoid financial advice from salespeople (they’re selling products, not advice)
That’s it. That’s the entire strategy.
Why Index Funds Beat Almost Everything
Here’s what took me years to truly understand: You don’t need to pick individual stocks. You don’t need cryptocurrency. You don’t need real estate (unless you want to be a landlord). You don’t need gold, commodities, or hedge fund strategies.
You need one thing: A total stock market index fund.
Here’s why:
Lower costs = more money in your pocket
- Index funds charge 0.03-0.04% in fees
- Actively managed funds charge 1-2% in fees
- Over 30 years, that difference is hundreds of thousands of dollars
Diversification = less risk
- VTSAX holds every publicly traded company in the U.S. (roughly 4,000 stocks)
- When you buy it, you own a piece of the entire American economy
- Individual stocks can go to zero; the whole market can’t
Passive investing beats active investing
- Over a 15-year period, 92% of active fund managers underperform the S&P 500
- Over 20 years, that number goes up to 95%
- The few who beat the market one decade usually don’t beat it the next
The Concept of “F-You Money”
JL Collins introduces a concept that fundamentally changed how I think about financial freedom: F-You Money.
It’s not about being rude. It’s about having enough wealth that you can walk away from things you don’t want to do:
- A toxic job
- A bad relationship
- A city you hate
- Work that drains your soul
F-You Money is freedom. And the path to it is simple: Save aggressively, invest in index funds, and wait.
The 4% Rule: How Much You Need to Retire
Here’s the math that determines financial independence:
If you can save 25 times your annual spending, you can retire.
This comes from the “4% rule”—the research-backed finding that you can withdraw 4% of your portfolio each year (adjusted for inflation) and your money will last 30+ years.
Examples:
- Spend $40,000/year → Need $1,000,000 saved
- Spend $60,000/year → Need $1,500,000 saved
- Spend $80,000/year → Need $2,000,000 saved
The key insight: It’s not about your income. It’s about your spending. Lower your expenses, and you need less to retire.
Specific Allocation: Keep It Simple
From “I Will Teach You To Be Rich,” Ramit suggests:
Option 1: Target-date fund
- One fund that automatically adjusts as you age
- Set it and forget it
- Perfect for beginners
Option 2: Age in bonds rule
- Your age as a percentage in bonds
- The rest in stock index funds
- Example: At 30 years old → 30% bonds, 70% stocks
From both Ramit and JL Collins:
- Don’t try to time the market – “Time in the market beats timing the market”
- Ignore the news – Market corrections are normal and expected
- Keep investing through downturns – This is when you’re buying stocks “on sale”
Reasonable > Rational
Morgan Housel adds an important nuance: Do what helps you sleep at night, even if it’s not mathematically optimal.
If having 30% in bonds makes you feel secure (even though historically 100% stocks performs better), do it. The best investment strategy is the one you’ll stick with for 30+ years.
The Big Takeaway: You don’t need 50 stocks, crypto, real estate, and gold. You need a simple index fund, patience, and consistency.
PILLAR 4: The Action Plan – Your Next Steps
Knowledge without action is useless. So let’s turn everything you’ve learned into a practical 30-day plan.
Week 1: The Money Audit
Goal: Get crystal clear on where you stand financially.
Action steps:
- Track every dollar you spend for one week using an app (Mint, YNAB) or a simple spreadsheet
- List all your accounts: checking, savings, credit cards, investment accounts
- List all your debts: credit cards, student loans, car loans, etc.
- Calculate your net worth: Assets (what you own) minus Liabilities (what you owe)
Why this matters: You can’t improve what you don’t measure. This baseline is essential.
Week 2: Build Your System
Goal: Set up the infrastructure for automated wealth-building.
Action steps:
- Open a high-yield savings account (Ally, Marcus, or similar – currently 4-5% APY)
- Optimize your credit cards (if needed, get a rewards card that matches your spending)
- Open investment accounts:
- If your employer offers a 401(k), enroll (or increase your contribution)
- Open a Roth IRA with Vanguard, Fidelity, or Schwab
- Consider opening a taxable brokerage account
- Create your Conscious Spending Plan using the percentages from earlier
Why this matters: The right accounts make everything else easier.
Week 3: Automate Everything
Goal: Remove willpower from the equation by automating your money flow.
Action steps:
- Set up automatic transfers:
- Paycheck → Checking account
- Checking → Savings (10% for goals)
- Checking → Investment accounts (5-10%)
- Checking → Credit card payment (full balance)
- Automate all recurring bills
- Schedule a quarterly “money date” with yourself to review everything
Why this matters: Automation means you pay yourself first, before you can spend the money.
Week 4: Start Investing
Goal: Put your money to work in the stock market.
Action steps:
- Choose your index fund:
- VTSAX (Vanguard Total Stock Market) – requires $3,000 minimum
- FZROX (Fidelity Total Market) – no minimum
- Target-date fund – no minimum, automatically adjusts over time
- Start with whatever you can: $50, $100, $500, $1,000
- Set up automatic weekly or monthly investments
- Commit to not checking your account more than quarterly
Why this matters: Starting is more important than starting perfectly.
The One Number That Matters
If I could only give you one metric to focus on, it would be this:
Your savings rate.
Your savings rate is the percentage of your income that you save and invest each month.
- Save 10% → You’ll need to work 51 years before you can retire
- Save 20% → You’ll need to work 37 years
- Save 30% → You’ll need to work 28 years
- Save 50% → You’ll need to work 17 years
- Save 75% → You’ll need to work 7 years
(Based on Mr. Money Mustache’s math assuming 5% real returns and the 4% rule)
The formula for building wealth isn’t complicated:
- Earn money
- Spend less than you earn
- Invest the difference consistently
- Wait decades
- Repeat
That’s it. That’s the whole game.
What I Wish Someone Had Told Me 10 Years Ago
Looking back on my financial journey, here are the lessons I learned the hard way:
1. Start Earlier (Even If It’s Small)
I waited until I “had enough” to start investing. That was a mistake. Starting with $50/month at 22 beats starting with $500/month at 32.
2. Ignore the Noise
I spent years reading financial news, trying to predict market movements, following stock tips. All wasted time. The buy-and-hold index fund approach beats 95% of active strategies.
3. Lifestyle Inflation Is the Enemy
Every time I got a raise, I upgraded my lifestyle. That delayed my financial independence by years. Learn to increase your savings rate as your income grows.
4. Comparison Is Poison
I spent too much time looking at what others had—better cars, nicer houses, exotic vacations. Wealth is built by ignoring what others have and focusing on your own path.
5. The System Matters More Than Motivation
I relied on motivation to save and invest. But motivation fades. Systems last forever. Build a system that works even when you don’t feel like it.
Take Action Today: Your Resources
Here’s the thing—I just gave you the highlights from three incredible books, representing probably 1,000 pages of reading. And honestly? This is just scratching the surface of what I’ve learned over 10+ years.
I’ve made the mistakes so you don’t have to. I’ve read the confusing books, tested the strategies, wasted money on bad investments, and eventually figured out what actually works.
My Digital Products Store
I’ve taken everything I’ve learned and condensed it into digestible, actionable guides that cut straight to the point:
- Low-cost PDF guides that break down complex financial topics into simple, actionable steps
- Audiobook versions so you can learn while commuting, working out, or doing chores
- Everything I wish someone had taught me 10 years ago—condensed into formats that save you years of confusion
Visit my store: stan.store/marloyonocruz
One-on-One Coaching
If you want personalized guidance—if you have specific questions about your situation, want accountability, or are ready to take your finances to the next level—I’m now offering coaching services.
Find me on Instagram: @yonocruzcoaching
Website: https://www.yonocruzcoaching.com/coaching
Final Thoughts: Money Serves You
Personal finance isn’t about deprivation. It’s not about living on rice and beans or never enjoying life.
It’s about designing a life where money serves you, not the other way around.
It’s about having the freedom to say yes to what matters and no to what doesn’t.
It’s about building a system that runs in the background while you focus on the things that actually make life meaningful: relationships, experiences, growth, contribution.
These three books—”I Will Teach You To Be Rich,” “The Psychology of Money,” and “The Simple Path to Wealth”—gave me that perspective. They changed my relationship with money from one of stress and confusion to one of clarity and confidence.
My hope is that this article does the same for you.
Remember: You don’t need to be an expert to start. You just need to start.
Read the Books
If you want to dive deeper, I highly recommend reading all three books:
- I Will Teach You To Be Rich by Ramit Sethi
- The Psychology of Money by Morgan Housel
- The Simple Path to Wealth by JL Collins
Each book offers far more depth than I could cover in one article. But if you only have time for one, start with “The Psychology of Money”—it will change how you think about everything.
Listen to the Full Episode
This blog post is a companion to my One Thousand Gurus Podcast special episode on personal finance.
🎙️ Listen here: #60: Mastering Personal Finance – Insights and Strategies from Three Major Books | Book Highlights
Subscribe to One Thousand Gurus wherever you get your podcasts:
Connect With Me
- Blog: marloyonocruz.com
- Podcast: One Thousand Gurus
- Digital Products: stan.store/marloyonocruz
- Coaching: @yonocruzcoaching on Instagram
- Podcast Instagram: @onethousandgurus
What’s your biggest takeaway from this article? Have questions about implementing any of these strategies? Drop a comment below or reach out on Instagram—I’d love to hear from you.
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