Must Read Personal Finance Books
- May 5, 2022
- by Michael
From saving funds for your retirement to growing rich from scratch — personal finance is an indispensable part of our lives. Our modern lifestyle is directly dependent on smart economic management. Still, do most of us honestly pay enough attention to managing wealth? If you are thinking you have something to learning in the area of personal finance, check out this list of top personal finance books you absolutely must read.
'Rich Dad Poor Dad' is a financial self help book from businessman and author Robert Kiyosaki. Kiyosaki is world-renowned for his finance seminars and runs a private financial education company.
The book portrays financial lessons from a 'rich dad,' what the author terms his friend's father. On the other hand, the 'poor dad' is his father, who, despite working hard, never achieves financial freedom.
It presents a unique take on handling different aspects of personal finance management like asset investments, entrepreneurship, and financial intelligence.
The book was published in 1997 and featured in the New York Times bestsellers list. It has remained an intriguing read for over two decades, undoubtedly making it a must-read. On the downside the writing could be better (quite repetitive). It also almost exclusively directs the reader towards real estate as an investment vehicle (which is likely biased based on timing and luck for the author). The author also takes the opportunity to promote themselves, other books and board games.
Co-authored by Thomas Stanley and William Danko, this book is an in-depth analysis of American millionaires.
'The Millionaire Next Door,' published in 1996, analyzes two types of wealth accumulators — 'under' and 'prodigious.' The authors compare the habits of these two types and explain the impact of lifestyle choices on personal finance.
You learn minute details like spending habits, investment strategies, and key takeaways for an enhanced economic outlook.
Overall, this book helps you gain financial independence. It gives you invaluable tips about spending and saving habits, prevalent in most millionaires. Make sure you add this one to your list without fail.
John Bogle's book subtly divides life into three facets — money, business, and life.
As the first index mutual fund creator, John Bogle's business principles are apparent in this incredibly resourceful finance guide.
The book answers the simple question, 'what's enough?', regarding financial needs and ambitions. As it turns out, things are all about how people can find true wealth in their lives.
You will understand the ill effects of greed and impractical ambitions on the wealth and assets of an individual.
Simply put, 'Enough' will help you discover true happiness in what you already have. If leading a contented life is what you aim for, this book is for you.
The author of this book, Nassim Nicholas Taleb, is known for his 2007 work 'Black Swan.' However, this statistician-risk analyst relates, in a one-of-a-kind narrative, human philosophy and finance.
'Fooled by Randomness' explains the theory of probability — both in market decisions and life. It puts forth how people misinterpret the law of probability and, instead, pushes you to think of it as an actual mathematical problem. The main idea is as follows: given that returns follow a standard distribution, there has to be winners and losers in the actively managed mutual fund game (e.g. stock picking). The winners are not geniuses, they are just lucky, and their track record invariably reverts to the mean.
Taleb writes — 'life is nonlinear.' The book aims at changing our outlook towards business and investment decisions.
Interestingly, 'Fooled by Randomness' made it to Fortune's list of 'Smartest Books of All Time.' Random events can indeed lead to tremendous success. This book is an eye-opener for those who stress too much about success and failure, finance or otherwise.
This book by Burton Malkiel is an excellent guide for personal investment. It emphasizes the value of investments and lays practical investing theories.
You will surely benefit from the technical and fundamental analysis of each theory. Furthermore, it concisely explains stocks, bonds, asset allocation, and stock market trends.
Analytical minds on the lookout for a practical and detailed stock market guide should explore this book. It will equip you with much-needed concepts like 'buy and hold,' and the significance of long-term investments.
The world needed an encouraging, reliable, and unfailing guide to investments. Well, this is certainly one.
Financial author David Bach presents a step-by-step guide for simple wealth-building. In 'The Automatic Millionaire,' Bach conveys three key lessons to make you rich.
This personal finance book focuses on saving, paying personal attention, and the utility of automated payments and is an essential guide to developing a sound personal finance system. On this note, you can quickly write these steps to get started.
- Monitor your cash flow.
- Set clear financial priorities.
- Automate your finances.
- Review your strategies.
Without a doubt, 'The Automatic Millionaire' is a must-read for today's financial age. The main message of 'automating your money' will help you increase your savings and grow rich simultaneously.
The author of this book, Jesse Mecham, started his company, YNAB, in the budgeting domain in 2004.
'You Need a Budget' highlights the significance of 'budget' in an individual's finance. A well-planned budget allows you to have a high level of control over your money.
You may also choose to plan and save better for your early retirement. Moreover, a budget helps organize your finances, keeping you out of debt and focused on financial goals.
This popular title concisely explains how the author overcomes financial anxiety. The structure, full-proof strategy, and story are easy to understand.
'You Need a Budget' serves as an excellent guide for modern-age couples. You learn the secret sauce of how personal budgeting tools like a spreadsheet can craft a steady life even with an average income.
One of the latest books written by Morgan Housel, 'The Psychology of Money,' contains 19 remarkable stories. Each story connects more to the psychological aspect of dealing with money.
The term 'financial psychology' deals with our mind's behavior and impact on investment, saving, and personal finance decisions. This super-engaging book will clear your thoughts about life and personal wealth management.
'The Psychology of Money' has a lot to offer, especially for young entrepreneurs and people who want to refine their thoughts about money. Give it a read to refresh your outlook about finance and become an intelligent investor.
Tips to Get the Best Output From Personal Finance Books
A long list of books can be intimidating. However, it's not rocket science either. Here are some quick tips to get the most out of reading these books:
- Small Reading Sessions: Finance can be a tedious topic, but if you limit your reading sessions, you won't feel overwhelmed.
- Re-read: If you don't understand a concept, take a pause and re-read it. It's not mandatory to get a grasp of financial topics in the first instance.
- Take Notes: Try to correlate a personal finance book to your life. So, keep a notebook nearby and jot down the vital tips that can have a positive impact.
- Create a To-Do List: Simplify your notes into a checklist that is easily accessible.
- Familiarize: Core finance terms can be tricky to comprehend. So, it is benign to know the meaning of such phrases for improved understanding.
To get started, you can pick any one of the mentioned books. Each book covers unique aspects of personal finance. So, choose one that you might find highly important.
Eventually, you will explore similar books after noticing the positive turnaround. For more suggestions, you can check this book list from the famous Bogleheads wiki.