Trey's "Financial Literacy" Reading List

 

Host: Trey Stone

 

Co-Host: Bobby Duncan

 

Trey Stone’s Reading List

 

“Our school systems do not teach financial literacy and they have failed our youth in this regard” Trey Stone

 

Financial literacy is one of the building blocks for financial success regardless of their income level. Friend of Trey, Gary Blumberg is married to a professor at UHT. One of her classes is about financial literacy and what she explained is even though these kids are college-aged, they don’t know how to balance a checkbook. They don’t understand that when you write a check it acts as money. They think that it’s almost like a credit card. They don’t understand how checks bounce and why fees are charged.

 

Trey feels that youth are targeted- credit card stations are set up on campus giving away a free t-shirt when you apply for a card. Companies go after naive young adults. Trey says, “When you take people who don’t understand the difference between an asset and liability, they don’t understand that if you get into debt from consumption and you run up interest, now you’re paying so much in fees and interest to your credit card company that you’ve taken that item and you’ve made it more expensive by 2x,3x,4x as much.”

 

Trey feels that schools have made room in the curriculum to teach these things but the mathematical principles that high schools are teaching are so much more complex than the basics you’ll need in a financial literacy class. It’s disappointing that kids go into the world as fresh, unsuspecting victims. Credit card companies, auto-finance companies, payday loan companies are ready to pounce on them and they will spend the rest of their lives in debt. As a result, they’ll never accumulate wealth or stop certain negative cycles in their families like poverty, food insecurity, etc. All of this leads to living in places with higher instances of crime, worse education systems, and it’s a downward spiral effect generationally and we can do better. It’s something Trey is passionate about and he mentors in this area. Part of this contribution to educationg people is his reading list that helped him in his career and in his life overall.



 

First Book to Discuss: Rich Dad, Poor Dad

Trey says that this book is the first step for many real estate investors. Robert Kiyosaki has a way as an author of communicating complex topics in very simple ways. He takes these accounting principles: looking at assets minus liabilities, equals your net worth. He suggests that as an individual, you should have a balance sheet. Normally that’s something for a business. He also talks about having a personal income statement or profit/loss statement. 

 

Elite Martial Arts owner, Eric Williams, has a son named Blake who just graduated from college. Blake came to Houston to work in energy trading and reached out to Trey to discuss taking the next step financially because even in Columbia in Business School he hadn’t learned certain financial principles. Trey explained that he needs to create a balance sheet and income statement for himself personally. He also referred him to this book as part of his journey.

 

Kiyosaki explains to you in this book, what’s an asset vs. a liability. He says, “if every month something takes money out of your pocket, it’s a liability. If every month, something puts money into your pocket then it’s an asset.” He talks about how a lot of people think their main asset is their home. “Well I own my home so that’s my biggest asset.” From a technical point of view, they’re right. But at the end of the day, if you don’t rent that home out- if it’s not an income-producing property, then you are regularly paying for the home; so, it’s taking money out and by Kiyosaki’s definition that makes it a liability.

 

Another big takeaway from the book for Trey is an anecdote from Kiyosaki’s childhood. Kiyosaki uses an example in the book about a childhood friend’s dad and his style of managing finances. Building assets vs spending money on things that require payments. He decided that things that were going to produce income, he paid with a credit card. Things that would be consumed or things that do not produce income, he paid in cash. 

 

Second Book: The Richest Man in Babylon

Trey considers this book to be “the Bible of personal finance” because it breaks things down for people who may be the first generation in their family looking to generate wealth. 

 

For Trey, “This is the book that has made the biggest impact on my day to day finances. It’s about shifting your paradigm and redefining the words assets and liabilities. Understanding that a person can have an income statement and balance sheet. It’s similar to Rich Dad Poor Dad, it’s in that storybook format, but it gives you a little bit more of the nuts and bolts of some of the step by step things that you need to do if you want to build wealth.”

 

For example, he talks about how you should pay yourself first and you should save a percentage of your income. Trey always looked at savings as a great thing to strive for but it’s something you do later when you make a lot more money. The reality is that when you put your bills first, you’re working to pay for those bills. Even essentials, unless you get them for free- you’re paying someone else for them and you’re working for them. 

“Pay yourself first is the idea that a portion of everything I earn is mine to keep.” That’s the way they phrase it in The Richest Man in Babylon. If you take a percentage of your income by saving a portion from every single check that comes in and you treat that no different than paying bills, you manage to get by with the money left over. If you try the opposite, there’s never any money left over and a lot of times you even end up having to put something on a credit card. 

 

As he continues through the chapters, he talks about the education of a young man in ancient Babylon. It’s all a fictitious account to illustrate these principles in a storybook format. The young man’s mentor basically teaches him about money and how it works. He makes a series of mistakes that help reinforce the lesson. By the end of the book, you get enough that if you just did the things in that book and nothing more, you’ll have a better understanding of why you’re “broke” if that’s the case for you. It addresses investments and suggests that if you invest with a partner, you should choose an expert in that field. 

 

Trey applied the principles he learned and tracked a personal spreadsheet every month, year over year. He graphed his progress and his cash flow regarding his “pay yourself first” initiative. Measuring your progress, graphing it, and committing to it really reinforces it and the sacrifices that you might have to make to save that money. Even when you make investments, save the money from those investments to do more investing until you reach a certain level where you can then start to spend that money because you’ve created an engine that continues. It starts with having the raw material. The written plans allow you to be conscious and intentional about your choices. So many people who don’t have a written plan and aren’t conscious about their choices are susceptible to paying other people and never paying themselves.

 

Trey reads this book every January, every year, and he plans to do this for the rest of his life. This helps him refocus and re-evaluate all of the roles he plays in his life. It doesn’t matter how many times you return to the material, we all need that repetition to find the ways in which we can do better and not to allow ourselves to be complacent or fall short of our goals. 

 

“What could be sadder than any emotion than regret,” Trey Stone

 

Third Book: The Millionaire Next Door

 

Trey lovingly refers to this book as “the Ramen noodles book.” Millionaires aren’t necessarily people with a bunch of flashy stuff. Millionaires are not necessarily wealthy because of what they made but because of what they didn’t spend. Young people see commercials, social media, and things on TV about material things equating to wealth. Simply put it’s “The Kardashian Effect”- famous for being famous. They look a certain way, drive a certain car, vacation a certain way, to demonstrate their wealth.

 

This book has scientific research that is mathematically based in which they break down why the majority of the millionaires in America actually live a lifestyle that looks nothing like what’s printed in magazines, featured on the internet and television. The majority of the people in this country who have a net worth above 1 million dollars actually don’t drive a new car, in fact, they don’t even buy new cars. They buy lightly used and save that money. These are people who don’t use credit cards to buy things that they can’t pay off at the end of the month. They don’t run debt up and make minimum payments. It’s a very different presentation of wealth. 

 

This is probably the most dry of the books on the list but what makes it dry is that it’s so well-researched and it’s backed by such a scientific methodology. The book teaches you that there’s nothing wrong with living on cans of tuna and ramen noodles. Anyone can go around looking like a “yesterday’s pay-check millionaire” but over time it will be obvious that you’re not actually wealthy. At some point things could get repossessed. People are going bankrupt at a faster rate than any time in American History. Trey believes it’s because we are so driven in our pursuit of the way wealth is presented - driven by that false presentation. People who truly accumulate wealth, do it by spending less than they bring in. It’s okay to enjoy nice things and make those purchases but Trey suggests building up your asset column first. You can do that by minimizing your expenses and cutting down your liabilities. 

 

If the partner that you’re choosing for real estate investments doesn’t support that then maybe you need another partner or maybe they need some financial literacy classes.

 

The Millionaire Next Door breaks down how they got there by just simply being frugal. By pinching their pennies and adopting behaviors like cutting coupons, they lead a path all the way to becoming millionaires. As they build up that net worth and invest to create more income, they reach a point where they can live where they want, drive what they want, and vacation where they want; but when everyone tries to start out consuming in a frivolous way, they’re at risk of losing it all. It’s the “trappings of wealth.” With the culture we have today and the influence of social media on our youth, this book is relevant more than ever.

 

Fourth Book: How to Win Friends and Influence People by Dale Carnegie

“Business is a team sport” popular saying that Trey relates to this book.

 

This book teaches you about human relations. You learn how to develop relationships with people that are more rewarding. 

 

At the end of the day, no one achieves success on a grand scale all on their own.” Trey Stone

 

Developing rewarding relationships with people requires skill just like anything else and this book helps you learn how. Monetizing that is how you can leverage other peoples’ skills, resources, and knowledge to build wealth far faster than you would ever be able to do on your own. This book breaks it down in simple, applicable things you can do in the form of techniques. It’s a book that has been around since the early part of the last century but it’s still relevant. Dale Carnegie ran a lot of self help programs and leadership programs. He was a master at his craft. This book delivers the information in a way that you can read it two or three times and immediately see a massive transformation in the way people respond to you.

 

If you want to be someone who goes and gets a job, living paycheck to paycheck- you might not need this book. If you’re someone who wants to accumulate a substantial amount of wealth, you’re going to need relationships with people to accomplish this. In Trey’s career he’s had several mentors, mentees, colleagues, friends, etc to help develop his career.

 

One example is Trey’s friend Emery. In the beginning of their relationship, Emery was a mentor to Trey and Trey didn’t have much to offer him in return. Books like this help you to understand that if you want to develop a relationship where you don’t have as much to offer as the other person, some day you can be in a position where you’ve accomplished a greater thing or built some wealth and some expertise then you’ll eventually be at that level where you can go back and forth. You have to start somewhere. People sometimes get stuck and they don’t get to that point where it’s a mutual thing- you’re an expert, they’re an expert but they don’t know how to bring people into their circle to start that out. This book explains that people have basic needs. Maslow’s hierarchy of needs breaks things down by : how do people like to be addressed/what kind of feedback are they looking for. Dale Carnegie explains this in a really blunt way. It’s a little repetitive which is also impactful. Trey feels like if he hadn’t learned this he may have never been able to convince a buddy like Emery to mentor him. This self help book stands out among the real estate and financial books on the list but it is on Trey’s list because it is so impactful.











Blog Post:

Top Lessons to Learn from Four Featured Books on Trey Stone’s Reading List

 

Trey’s Reading List 

 

Multi-family investor Trey Stone is passionate about financial literacy. To him, financial literacy is one of the building blocks for financial success regardless of income level. Often, youth are targeted because they don’t have financial literacy education and life skills. For example, credit card stations are set up on campus giving away a free t-shirt or other prizes when you apply for a card. Young adults sign up, not fully knowing what they are getting into. Companies go after naive young adults. Credit card companies, auto-finance companies, and payday loan companies are ready to pounce on them and they could spend the rest of their lives in debt. As a result, they’ll never accumulate wealth or stop certain negative cycles in their families like poverty and food insecurity. All of this could lead to living in places with higher instances of crime, insufficient education systems, and it’s a downward spiral effect. Trey is adamant that we can do better and he mentors in this area. Part of this contribution to educating people is his reading list.

 

Trey also believes in continuous learning, re-focusing, and improving himself. He recommends that everyone follow that mindset. He has put together a reading list of the most influential books in his career and his life as a whole. He uses this reading list himself, often re-reading his favorites or the most transformative books on the list. This helps him refocus and re-evaluate all of the roles he plays in his life- as an investor, a husband, and a father. Trey says, “It doesn’t matter how many times you return to the material, we all need that repetition to find the ways in which we can do better and not to allow ourselves to be complacent or fall short of our goals.”

 

“What could be sadder than any emotion than regret,” Trey Stone





Lesson 1:

From Rich Dad Poor Dad by Robert Kiyosaki

https://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1612680194/ref=sr_1_3?crid=24A9ZGBV33XYY&dchild=1&keywords=rich+dad+poor+dad&qid=1599160305&s=books&sprefix=rich+dad+poo%2Cstripbooks%2C204&sr=1-3

 

Non-traditional definitions for asset and liability.  If every month, something takes money out of your pocket, it’s a liability. If every month, something puts money into your pocket then it’s an asset.

 

Lesson 2:

From Richest Man in Babylon by George S. Clason

 

https://www.amazon.com/Richest-Man-Babylon-George-Clason/dp/1640950494/ref=sr_1_1_sspa?dchild=1&keywords=richest+man+in+babylon&qid=1599160353&s=books&sr=1-1-spons&psc=1&spLa=ZW5jcnlwdGVkUXVhbGlmaWVyPUExUVBBTDFYQ05INVJaJmVuY3J5cHRlZElkPUEwMjk5MzU2REpJUUw4Uk5RWVhZJmVuY3J5cHRlZEFkSWQ9QTAwMjU5ODcxWVFUNlNQMjVYWkg3JndpZGdldE5hbWU9c3BfYXRmJmFjdGlvbj1jbGlja1JlZGlyZWN0JmRvTm90TG9nQ2xpY2s9dHJ1ZQ==




Prioritize saving a percentage of your paycheck. “Pay yourself first is the idea that a portion of everything I earn is mine to keep.” 

 

Lesson 3:

From The Millionaire Next Door by Thomas J. Stanley

 

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

 

To accumulate wealth, it is best to be frugal. The book teaches you that there’s nothing wrong with living on cans of tuna and ramen noodles



Lesson 4:

From How to Win Friends and Influence People by Dale Carnegie

 

https://www.amazon.com/How-Win-Friends-Influence-People/dp/0671027034

 

If you want to develop a relationship where you don’t have as much to offer as the other person, you have to understand that some day you can be in a position where you’ve accomplished a great thing or built some wealth and expertise, and then you will be at that level where you can support each other mutually. You have to start somewhere and you just need the skills to do it.



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