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It is no exaggeration to say that starting to read money and personal finance books changed the course of my life. I quickly started to learn that nearly everything I thought I knew about money was wrong.
Some of the prime examples:
- I thought that debt was a natural, inescapable element of life. It isn’t.
- I thought that investing was risky and would leave you broke. That can happen, but only if you’re greedy or careless.
- I thought that wealth was reserved for only a precious few, and that the rest of us could only “make it” if we were lucky. Absolutely not true.
- I thought that money was meant to be spent, that buying more (and better) stuff was the key to living the good life. Again, not even close.
Good news is, it doesn’t take a lifetime of reading to figure all this out. Weirdly enough, the more I read about economics, managing money, and investing, the less I find I actually need to know. There is a crap-ton of noise, numbers, and ideas out there about money. But most of it is just one big distraction from the few things we really need to understand.
With just a little bit of time and self-educating, anyone can learn to master their money.
Below, I’ve gathered up 6 of the best personal finance books of all time for you to check out. Each one has all the knowledge and inspiration you need to change the whole trajectory of your financial life. Any one of them can set you up for lasting success with money. Take a look!
Books about Living a Healthy Life with Money
When it comes to money, people really like to put the cart before the horse. That is, we skip the big picture and leap ahead to the mechanics of it all: the spreadsheets, percentages, and the like.
But none of that nitty-gritty stuff is worth anything without a clear sense of your big picture. What do you want more money for? What kind of life do you want to build? The following books will push you to re-evaluate your relationship with money, and envision what your own wealthy life might look like.
1. The Millionaire Next Door by Tom Stanley
A million dollars might not be quite what it used to be, but Tom Stanley’s invaluable insights into everyday wealthy families remain eye-opening. You likely have some image in your mind of what a “millionaire lifestyle” looks like, but Stanley reveals it’s most likely way off.
The typical wealthy American does not live the way TV and movies would have us believe – they don’t live in mega-mansions, or have a pool inside their pool; they don’t drive high-end cars; and they don’t frequently luxuriate on wild international travel.
Through an exhaustive study of real-world millionaires, Stanley reveals that most of them become so by patiently saving and investing their money. They live in reasonable homes and drive reliable cars. They carry very little debt. When they do spend money, they do so for real value, not for status or appearance. And most importantly, they live happily and freely.
2. Your Money or Your Life by Vicki Robin & Joe Dominguez
First published in the early 90’s, Your Money or Your Life lived a quiet couple of decades before its recent resurgence as a sort of bible to the financial independence/retire early (FIRE) community.
Years before there were legions of bloggers like myself screeching about saving more money, Robin and Dominguez published a book with a message that no one else at the time was saying: you don’t have to spend your money.
And crucially, every time you do spend money, you’re not just trading paper for a new thing. You’re trading away the hours of your life you spent making that money. Most things we spend money on aren’t worth giving up hours of our lives for.
In arguably the original blueprint for the FIRE movement, Your Money or Your Life encourages re-evaluating your whole relationship with money. Instead of trading all your hours for shiny new things, you can keep that money, and use it to build a life of freedom. One where you don’t have to spend all of your days chasing the next dollar.
Eventually, you can build up enough savings, and buy enough freedom, that you won’t need to work a job at all anymore if you don’t want to. That is the power of financial independence.
Books on Investing and Growing Your Money
Contrary to what Wall Street, Hollywood, and the money manager down the street want you to think, healthy investing for regular people is a simple, cheap, and reliable way to put your money to work for you.
With a little bit of research, and a willingness to make patient, long-term choices, you can build a simple investing strategy and start creating serious wealth. And these books will show you how.
3. The Little Book of Common Sense Investing by Jack Bogle
The gold standard of investing advice for regular people these days is rapidly coalescing around one simple idea: index funds. In case you’re not familiar, an index fund is a single investment that is automatically diversified across dozens, hundreds, or even thousands of stocks, bonds, or other securities.
Forget about picking winning stocks, “beating the market” (it’s a myth), or constantly buying and trading investments for incremental gains. Building wealth for serious investors is about balancing growth potential with stability, while keeping the cost of investing low. Index funds achieve all three of these goals.
For a clear, compelling, and concise explanation of why index investing is so powerful (and how to do it), look no further than the man who invented it. Jack Bogle, founder of The Vanguard Group, will show you everything you need to know about building a simple, low-cost, reliable investment portfolio with tremendous long-term potential.
4. The Simple Path to Wealth by JL Collins
JL Collins, one of the original big-time personal finance bloggers, knows a thing or two about wealth building. In his book, Collins paints a clear, unintimidating roadmap to lifelong financial independence with simple steps and strategy that can work for anyone.
Building on the inspiration of Jack Bogle’s index funds, Collins goes a step further. The portfolio he recommends to one and all, and the portfolio he himself uses, contains just one investment. One particular Vanguard index fund.
What about diversification, you ask? Well, Collins shows how a sufficiently large index fund is inherently diversified already. With one fund, your money can grow with the overall stock market, rather than needing to bet on any specific horse. And the overall market always grows in the long run.
Any micro-optimizations that you could make are unlikely to beat the average for long. Especially when you factor in the fees, taxes, and extra time it takes to keep up with an always-moving portfolio.
Like I said, good investing for regular people is painfully simple. And The Simple Path to Wealth will take you through it all.
Books for Building a Wealthy Mindset
On the road to financial freedom and taking control of your life with money, there will be challenges. You will hear endless bad ideas for what to do with your money. Much of that advice will come from people who want your money for themselves. But some of it will come from people you know and love, who simply don’t know better.
You will also find yourself caught up in the emotional pull of investment trends and popular buzz, and the occasional panic that comes with them. These books will prepare you to weather these challenges the way rich people do, and keep a steady ship on the path to wealth.
5. The Richest Man in Babylon by George S. Clason
Many people say that the Richest Man in Babylon is one of the best personal finance books of all time because it takes the form of a collection of short fables. This makes it a lighter read than some of the more nuts-n-bolts personal finance favorites. But this isn’t what I like most about it.
What I like most about this book is that even though George Clason wrote it in 1926 and it takes place 4,000 years ago, the stories within remain as relevant as ever. This book demonstrates, in a theme connecting its many individual cogent points, that the fundamentals of money and wealth have never really changed.
Currencies and economies will rise and fall over time, as will the ways people make money and how exactly they invest it. But the fundamental mindset of wealth never does:
- Stay out of debt
- Own assets rather than consuming things
- Think for the long term
- Money saved is more valuable than money spent on status symbols
Check this one out for these and other truly timeless reminders of what a wealthy mindset looks like (and always has looked like).
6. A Random Walk Down Wall Street by Burton Malkiel
When you start to read about investing and wealth-building, one thing that you will hear over, and over, and over again is not to get greedy or emotional. Intelligent investing is simple, reliable, and doesn’t change much over time. Some might even call it boring (which, first of all, how dare you).
No matter how many times this is said, written, carved in stone tablets, or tattooed onto foreheads, there will still be gold rushes. People around you will rush to the sexy new “investment” of the week. They will hungrily pour their money into it as its price soars upward. They will scoff at your “paltry” long-term returns and tell you that the old rules of investing no longer apply. And inevitably, most of them will lose a great deal of money.
The old rules apply, as they always have. And this is no better demonstrated than by Burton Malkiel in a Random Walk Down Wall Street. Malkiel, a lifelong economist, masterfully demonstrates how time, time, and time again, people have thought that they could outmaneuver the financial markets and defy the fundamental rules of value. In every case, the winner in the end was the person who rode the wave of the whole market and grew with it rather than trying to beat it. In other words, once again: simple, long-term index investing.