There is an amazing amount of knowledge available through the thousands of personal finance books out there. If I had to start my journey of learning about money all over again, and could only choose 5 books, these are the 5 I would choose. And these are THE 5 you should start with.
The 5 Money Books you MUST Read
- Richest Man in Babylon (1930’s)
- Bogleheads Guide to Investing (2006)
- Millionaire Next Door (19960
- Rich Dad Poor Dad (1997)
- Total Money Makeover (2003)
Why These Five Books?
The sum of information provided in these five books is arguably all you need to know to build wealth. No, it won’t make you a billionaire scion. It will, if the advice is followed, provide you with a path to building wealth over a lifetime. No get rich quick schemes here. These books provide you a blueprint for building wealth steadily and safely over time.
Richest Man in Babylon | Spend less than you earn and save and invest a minimum of 10%
A series of informational pamphlets that were bound together and published in book form in 1926, this book dispenses financial advice through a collection of parables set in ancient Babylon. Through their experiences in business and managing household finance, the characters in the parables learn lessons in financial wisdom. This might be the only book I would give someone if I could only give one! You must read it to understand. Then read it again. I’ve read it at least a dozen times.
Bogleheads Guide to Investing | Invest primarily in index funds
This book changed my entire outlook on investing. Before this book was added to my reading list, I was chasing the latest craze stock tip given to me by a friend of a friend of a friend who overheard his stock-broker brother talk about. Remember JDS Uniphase my fellow Gen Xers? Well, this book made me realize I was looking at investing completely wrong. Don’t try to be the best. Be average! The most counterintuitive, but life-changing advice you will ever get. This book MUST be read by anyone even remotely serious about investing.
Millionaire Next Door | Frugality is the trait most millionaires exhibit, so be frugal if you want to be one also
Why this book? Because the advice is based on research of actual wealthy people, and provides advice that proves that anyone can build wealth, if only they adjust their actions. In other words, follow the example of others who have done it. Simple. Even it, not easy.
Rich Dad Poor Dad | An asset produces income, if not it is a liability.
The book focuses on treating your ‘personal’ finance as a ‘business’ – and using tools like the balance sheet and income statement to build your wealth – just like a business does. For me, this message was revolutionary. At that point in my life, I thought I would try and work in businesses or even start a business of my own. I never thought of myself as a business. That shift in mindset changed everything for me. I don’t agree with everything in the book. But it’s certainly a must read for any beginner at wealth building. There are several key concepts that must be learned in order to build wealth effectively.
Total Money Makeover | Eliminate all debt, because all debt is bad.
There’s a reason why one of the most famous and important voices in personal finance is who he is. His book, and his methodology for debt management, is revolutionary. Cut all debt out of your life, by cutting out the insignificant frequent purchases – like expensive coffee, i.e. the “latte factor”. Again, there are several concepts presented in this book that you must understand to build wealth effectively.
Read These Books.
Better yet, buy these books. Then read them. Take notes in them. Then refer to them as you take their advice – and put their advice into practice! Each of these books is worth buying- and reading – multiple times. I’ve read most of these books twice and some, like Richest Man in Babylon, I’ve read many times over.
I contend that if these 5 books were owned, read and the advice in them consistently followed by every single person, we would have zero poverty in the world.
Have you read these books? Do you agree with my “Top 5 list”? What’re your thoughts on them? What book would you remove from my list and what book would you replace it with? Post to comments.
Agree? Why? Disagree? Tell me what books should be on this list instead!
Leave a Reply