Are you looking for the best personal finance books? If so, this article will make it much easier for you to decide which books would be the best ones to read. The following books are what I consider to be the best personal finance books that should be read by beginners, in no particular order.
There are lots of different ways for you to learn how to manage your money better and how to grow your wealth. You might simply Google questions you have until you are sick of looking at different blogs.
You might ask a friend or relative, one that always seems to be able to take the best vacations and have the best meals with the hottest dates.
You might even go so far as to get a degree in finance, which I wouldn’t recommend unless you’re TRULY obsessed with the stuff.
But on the off-chance that you don’t want to ask a relative, or you don’t want to have to comb through the enormous pile of information on the internet, here’s a list of 10 finance books that will help you take a step in the right direction.
So grab a drink, get comfortable, and take a look at this list:
- The Richest Man In Babylon
- The Wealthy Barber
- MONEY – Master The Game
- The Intelligent Investor
- A Random Walk Down Wall Street
- Rich Dad, Poor Dad
- The Millionaire Next Door
- The Total Money Makeover
- I Will Teach You To Be Rich
- The Four-Hour Work Week
1. The Richest Man In Babylon
Definitely the oldest book on this list and the closest thing that personal finance has to a “classic”, “The Richest Man in Babylon” is one of those personal finance books that has stood the test of time.
Two things about this book make it VERY digestible.
One, it’s really not that long, only 144 pages. Why so short? Because it was written as a series of parables, not as one collective novel.
Two, you won’t find specific advice in this book like “What’s a stock” or “How to budget” or anything along those lines.
What you will find is a series of very simple lessons that anyone can understand that should be used as guiding principles when starting your financial journey.
For example, probably the most famous piece of advice in this book is that you should save and invest at least 10% of your total income.
Now, this was written back in 1926, so things like mortgage-backed securities and the NASDAQ didn’t exist. So this book won’t tell you where to put that 10%, but it’s got great lessons in it and is an absolute must-read for anyone trying to understand personal finance better and get on the road to personal wealth.
2. The Wealthy Barber
In terms of finance books, I have to say that this is one of the best ever written, for one very simple reason: it doesn’t put you to sleep.
With most finance books, it’s some old guy telling you how to pinch pennies and have no fun. David Chilton actually took the time to write this not as a textbook, but as a novel. It’s an extremely easy read, but more importantly, it’s useful.
Whereas “The Richest Man in Babylon” gives you very broad strokes, “The Wealthy Barber” actually gives you some actionable advice on investing.
With that in mind, I do have a caveat: this is not the most updated book in the world.
In fact, there are things in this book that are downright wrong, one of which is “You can earn 15% in the stock market every year.”
Yeah… no you won’t.
If you hit 10% a year you’d be lucky. When this was written, there was a huge upswing happening in the market that led people to believe that they could earn lots more in the market than was actually possible.
So if you’re looking for the updated version, you can find it here:
3. MONEY – Master The Game
Again, in the interest of full disclosure, this is the only Tony Robbins book I’ve read. For those of you that are not familiar with his background, he’s essentially a “life coach” and professional speaker.
Nowhere have I read that Tony has an extensive background in financial research, nor is he a Wall Street hedge fund manager with decades of investing experience.
So why would I suggest one of his books on my list of must-read financial books?
There are a couple of reasons:
First: The advice in this book is sound. He crushes a set of financial “myths” with information that I know to be true, both from personal experience, research, and oh yeah, my degree.
And what I like most is that Tony doesn’t necessarily claim to be an expert. He just finds people that are and asks all the right questions.
Second: This book can really act as a one-stop shop.
If you knew nothing about finance/investment/budgeting and wanted to get a full course of information on the subject, this book will do the trick.
It takes you through the basics of investing even up through using some pretty fancy financial instruments.
Third: If you’re into this sort of thing, the book deals with a lot of the softer issues around finance. Things like goal setting and why you’re falling short are discussed in this book in a way that I haven’t seen anywhere else.
Also, because he’s such a rockstar salesman, he’s got a great way of “showing you, not telling you.” It’s very solid writing and I would imagine helps most people visualize where they want to be and how they can get there.
As far as most finance books go, this one does the trick both in terms of soft skills (like goal setting) and harder skills (like asset allocation).
4. The Intelligent Investor
“The Intelligent Investor”, while not old enough to be the granddaddy of personal finance books is definitely one of the classics.
The author, Benjamin Graham, is known as one of the key founders of value investing, which is a style of investing that says you should buy stocks when they’re super cheap and sell them when they’re expensive.
The book is definitely written with an audience of investors in mind. But, I think it can be helpful to pretty much anyone.
I loved this book for a couple of reasons.
The first, and you should be aware of this, is that it speaks to me. It’s really not a beginner’s book, and in fact, can be quite a challenging read.
After all, this was a guy who was buying stocks like 65 years ago and was a professor at Columbia. That being said, the revised edition has notes that follow each chapter written by Jason Zweig, which means you don’t have to learn any 1950’s vernacular in order to understand the book.
Second, the book does give you an outline as to what makes a good/poor investment, at least from a value investing perspective.
Graham outlines the financial ratios you should be looking at and what they mean. One of my favorite lines from Ben Graham has to do with how you know a stock is cheap and ready to be bought.
This isn’t an exact quote but basically, he says, “Take fat people for instance. Do you need to know exactly how much they weigh to know that they’re fat? No. It’s the same process for value investing.
You don’t need to know what price (and below) would indicate great value.”
Oh, and Ben Graham?
He was the guy that taught Warren Buffet at Columbia Business School. You know, Warren Buffet? Routinely one of the three richest people in the world?
So he might have something of significance to impart on you…
5. A Random Walk Down Wall Street
“A Random Walk Down Wall Street” is not a finance book for the faint of heart.
In fact, if you don’t have a pretty strong background in finance already, you might find this book a little bit of a tougher read than most.
However, if you’ve got the chops for it, this is an absolutely amazing read.
Not only is it written by an academic, but since its first writing back in the ’70s, a lot of the concepts in this book have held true.
In fact, this is one of the first, if not THE FIRST, books to suggest that a broad-based index fund is going to serve the average investor better than the “flavor of the month” mutual funds. Which then (eventually) gave birth to the plethora of financial bloggers (yours truly included).
But he also goes through some other interesting pieces, such as a history of the general populous fucking up in financial markets (Tulip Mania, anyone?) and why traders will never be able to consistently beat the market.
If you’re looking for inspiration that you’re going to get rich quickly in the markets, look elsewhere. If you want a plate of truth with a side of dry academic humor, this is the book for you.
6. Rich Dad, Poor Dad
Again, this is one of the finance books classics. “Rich Dad, Poor Dad” is written from the perspective that the author has two dads: one that was rich and willing to teach him how to become financially independent, and another who was well-educated, worked hard, but never could seem to get a grip on his finances.
Through a set of parables, anecdotes, and concrete advice, “Rich Dad, Poor Dad” offers a really solid introduction into the world of personal finance.
If you’re looking for your “first finance book”, you really can’t go wrong with this one.
It has the perfect balance of concrete advice peppered with lessons on the psychology of money. That being said, if you’re pretty well immersed in the personal finance world, this book won’t contain a bunch of new information you haven’t heard before.
7. The Millionaire Next Door
Think about the word “millionaire”. What comes to mind?
Maybe a big house. A guy with a nice car, fancy watch, and a wife with really big… aspirations. You might see palm trees, sunshine, beaches, booze, expensive suits, and exotic cars.
Either way, you more than likely envision someone who has very “obvious” wealth; when they walk by, you know that they’ve got money for days…
The Millionaire Next Door takes that idea and shits all over it.
Basically, the book was written by another academic who really wanted to explore who these millionaires were.
Were they flashy, living in huge houses?
Did they take super fancy vacations? Eat at the best restaurants? Relieve themselves on gold-plated toilettes?
It turns out, very simply, that most millionaires are the EXACT OPPOSITE of what you’d expect. Most millionaires live in extremely modest homes in the “not rich” parts of town, own their own businesses (but aren’t CEO’s pulling in $50 million a year), pinch pennies religiously, send their kids to public schools, and drive used cars.
They’re incredible deal-hunters, are often married, and don’t have enormous incomes (often below 6 figures). So if you want to model yourself after the profile of true millionaires, don’t be doing your makeup like a Kardashian or get yourself all decked out in tattoos like J. Biebs.
Read this book to find out what defines a true millionaire!
8. The Total Money Makeover
Dave Ramsey is probably the best-known author on this list, and for good reason. The man has been producing solid financial advice books since 1997 and has sold millions of copies of his books.
I’d argue that he’s probably just as good of a businessman as he is an author.
So what makes him different than everyone else on this list?
He’s the “Walter White” of the personal finance world…
… I’m totally kidding.
He’s actually arguably one of the biggest opponents of debt, ever.
The man has made a career telling people that they shouldn’t use debt and helping them crawl out of huge piles of debt. And while my experience has shown me how this can be very misleading (economically speaking, debt magnifies returns and is often very useful in various investments), he does have a great point.
Most people don’t know how to use debt appropriately and go into debt buying assets that depreciate, instead of appreciating.
His 7 step program very clearly outlines what it takes to get out of debt and back in control of your financial livelihood.
One of the things he is most well known for is constantly pushing the “debt snowball” method. Very simply put, this method states that you should pay off your smallest balance loans first, and proceed to the next smallest, and so on.
The reason is most people will continue to feel motivated once they see the number of loans decreasing. Even though, from a money-saving point of view, that’s not quite the best move. But the snowball method has more to do with psychology than economics, so it’s a pretty solid method.
Long story short, if you’re having a really hard time getting your debt squared away (or lowered) then this is your book. However, if you’re looking to reduce the amount of time spent on managing finances, look no further than…
9. I Will Teach You To Be Rich
My boy, Ramit.
THIS guy knows how to write financial help that is useful, actionable, and entertaining.
A Stanford grad who studied psychology, Ramit Sethi doesn’t just stop at the, “save 10 percent of your income”, and “invest in mutual funds.”
He breaks down the psychological barriers holding you back from achieving your goals and gives you the freedom to do so.
He also talks about a couple of things that you won’t find in the other books. He’s big on negotiation, on automating all your finances, and is the only person in this entire list who talks about saving up for weddings.
He also wears his Indian heritage as a badge of honor when it comes to financial dealings, and in more than one instance writes things that his parents would most likely not want to read…
Obviously, Ramit Sethi is known for his book’s eponymous website.
There he offers many different courses, but the ones that really speak to me are the courses where he teaches you his style of entrepreneurship.
I really do believe that we no longer live in a world where it’s enough to save a chunk of your paycheck. If you don’t have at least some sort of side business, then your lack of diversified income will come to bite you someday.
As such, check out Ramit’s book and website!
10. The Four-Hour Work Week
Alright alright, before you start yelling at me that this isn’t a personal finance book, take a chill pill and hear me out.
No, Tim Ferris is not going to go through the finer points of investing.
He’s not going to tell you to cut back 10%, or to snowball your debt, or even make a budget, really. No, he’s going to sing a song that a LOT of millennials want to hear.
“Here’s how to have enough money to do what you want but not be bogged down by all the crap that comes along with being wealthy.”
In the 4-Hour Work Week, Mr. Ferris goes through the exact steps he took to get his business not only up and running but thriving.
However, 80-hour weeks led him to come up with some pretty innovative ways to keep the money rolling in while he took a substantial amount of time off.
This allowed him to work on his “lifestyle design”, which basically means ol’ Timmy can do whatever he wants, whenever he wants.
Not a bad life.
In addition to showing you how to get your business up and running, he also shows a myriad of different things when it comes to “lifestyle design”.
Travel comes to mind.
Tim is an extremely well-traveled man and is even a world champion at some obscure form of Asian boxing.
He’ll also show you how to automate pretty much everything in your life, all the way down to sending apology flowers to your girlfriend/wife.
Want to work at home instead of at the office?
Tim Ferris has got a plan for you.
Overall, this is a GREAT book to get you out of your comfort zone and get you doing things you never thought you could do.
But keep in mind: this is basically a book on entrepreneurship.
If you’re the kind of person that wants to plug away at the same job for 30 years and have a standard, “safe” life, this book isn’t for you.
But on the off chance you like to travel, money, time, or happiness… you’ll definitely want to check this out.
Ok, so do you need to read EVERY single book on this list?
Yes and No.
But if you’re looking to get a very baseline idea of what it takes to become a wealthy man or woman, this list is a great place to start.
Is this list missing anything?
Is there a book that should take the place of another?
What would you include in your list of most influential personal finance books (+4 points if you say it’s mine)?
Let me know in the comments below!
Keep trying to crack the code (and keep reading!) and if you have liked this post, please share it on your favorite social sites.
Until next time friend, have a great day.