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The 10 Best Finance Books Money Can Buy
There are lots of different ways for you to learn how to get your financial shit in order. You might simply Google questions you have until your sick of looking at blogs (except this one, you LOVE this one…). 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 gargantuan pile of information on the internet, here’s a list of 10 finance books that give you a VERY solid base on which to build your money empire! 🙂
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 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.
Yeah, that makes Mr. Clason the Aesop of the personal finance world. 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 principals when starting your financial journey. For example, probably the most famous piece of advice in this book (and then reiterated in pretty all other finance books) is that you should save and invest at least 10% of your 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 money.
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 then was actually possible.
So if you’re looking for the updated version, you can find it here: The Wealthy Barber Returns. Disclaimer – I haven’t read this updated version and won’t vouch for it. The guy wrote a really good finance book a couple of decades ago, I’m assuming he did so again.
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/invest/budgeting and wanted to get a full course of information on the subject, this book will do the trick. It takes you through the basic 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. 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).
“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. I loved this books for a couple of reasons. The first, and you should be aware of this, is that it speaks to me as a guy with a degree in finance. It’s really not a beginners 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. 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… 😉
“A Random Walk Down Wall Street” is not a finance book for the feint 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 it’s first writing back in the 70’s, a lot of the concepts in this book have held true.
In fact, this is one of the first, if not THE FIRST, book 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 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 quick in the markets, look elsewhere.
If you want a plate of truth with side of dry academic humor, this is your book!
Again, this is one of the finance books classics. “Rich Dad, Poor Dad” is written from the prospective 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.
Think about the word “millionaire”. What comes to mind? Wealth, obviously. 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, and expensive suits. Either way, you more than likely envision someone who has very “obvious” wealth; when they walk by, you know that they’ve got money fo’ 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? In 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 tatoos like J. Biebs. Read this book to find out what defines a true millionaire!
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 finance degree has shown me how this can be very misleading (economically speaking, debt magnifies returns and is often very useful in various investments), he doest have a great point. Most people don’t know how to use debt appropriately, and go into debt buying assets that depreciate, instead of appreciate.
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 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 and so forth. The reason is most people will continue to feel motivated once they see the number of loans decreasing. Even though, from a money-savings 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…
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 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 on 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, than your lack of diversified income will come to bite you in the ass someday. As such, check out Ramit’s book and website!
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. It’s essentially:
“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 go 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 the fuck 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 travelled 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 travel, money, time, or happiness… you’ll definitely want to check this out.
HA! And you thought it was all over!
I couldn’t give a list of top finance books you should read and NOT include my own! “The 10 Financial Commandments” is your one-stop shop crash course in personal finance. There are a couple of reasons that I decided to write an ebook, as opposed to just telling people that they should read others work.
- This book is short! ON PURPOSE! There are lots of personal finance books out there that really take their time getting to the point. I’m the driver on “thecodetoriches.com” bus, and I’m going to drop you off right where you need to be without any detours. If this book takes you more than an hour or two to get through, you’re spending too much time reading it. Or you need glasses. Probably the latter…
- This finance book has everything needed to become dangerous when it comes to money. Need to know how to budget, but don’t want to spend days figuring out how? I got you. Want to know where to invest, but you don’t completely understand how the American financial system works? Got your back bro. Want to know how to set financial goals and actually hit them? I… well, you got the point!
- This finance book is FREE! I’m not even trying to cover the costs of production, I just want you to have this information! Enter your email in the field at the top of the page to get your free book! Someone call the cops, because at this “price” you’re robbing me blind… I’m sorry. Clearly I spent too much time with car salesmen…
The 10 Best Finance Books – The Wrap Up
Ok, so do you need to read EVERY single book on this list in order to understand finance?
Yes No. But if you’re looking to get a very baseline idea of what it takes to become a wealthy man/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). Comment below!
Keep trying to crack the code (and keep reading!),