Are you aiming to read more books or improve your finances this year? If so, why not combine the objectives? Below is a list of some of the best personal finance books. Read one (or all) this year to deepen your financial knowledge and take practical steps to improve your financial situation.
I’ll Teach You How to Be Rich by Ramit Sethi (2009)
Much of the financial advice we hear involves lots of do’s and don’ts and intimidating terminology. But in “I will teach you how to be rich“, Ramit Sethi goes beyond math and focuses on the psychology of money, guiding the reader through a practical six-week program. Sethi writes in a down-to-earth, humorous style that makes for easy reading. You can download the first chapter of the book at http://iwillteachyoutoberich.com/blog/thank-you/first-chapter/.
Notable quote: “Investing is the most effective way to get rich. By opening an investment account, you give yourself access to the greatest rewarding vehicle in the history of the world: the stock market.
The Millionaire Next Door by Thomas J. Stanley and William D. Danko (1996)
“The Millionaire Next Door: The Surprising Secrets of America’s Rich“ reveals seven traits that appear again and again among millionaires. The book’s observations come from interviews with millionaires, many of whom are blue-collar workers — in other words, the people next door.
What are the seven traits? The millionaire next door:
- lives below his means,
- Spend time learning how to create wealth,
- Prioritizes financial independence over social status,
- Did not rely on financial support from his parents when he became an adult,
- Raises economically independent children,
- Successfully target market opportunities and
- Chose the right profession.
Notable Quote: “Wealth is most often the result of a lifestyle of hard work, perseverance, planning, and most importantly, self-discipline.”
The Psychology of Money by Morgan Housel (2020)
Money can make us irrational, and when we make financial decisions, we can behave with overconfidence, impatience, and anchoring bias (the tendency to trust too much the first information we learn about a topic). These irrational beliefs and emotions surrounding money have a real effect on our personal finances and, by extension, global markets. In “The psychology of money“, Morgan Housel delves into these topics, sharing anecdotes, research and advice.
Remarkable quote: “There is no reason to risk what you have and need for what you don’t have and don’t need.”
George S. Clason’s Richest Man in Babylon (1926)
This classic book shares “the secrets of the success of the ancients” through parables set in ancient Babylon. It just goes to show that money management principles are timeless! In the book, George Clason covers savings, financial planning, personal wealth and more.
Notable Quote: “’A part of everything I earn belongs to me.’ Say it in the morning when you first get up. Say it at noon. Say it at night. Say it every hour of every day. Say it to yourself until the words pop out like letters of fire in the sky.
Your Money or Your Life by Vicki Robin and Joe Dominguez (2008)
“Where is all the life we are supposed to have earned at work? For many of us, isn’t the truth closer to ‘killing’?” Vicki Robin told http://yourmoneyyourlife.com/book-summary/.
The book goes through nine steps to create a new “road map” for money:
- Make peace with the past
- Being in the present – Tracking your life energy
- Three questions that will transform your life
- Make vital energy visible
- Enhance your vital energy – Minimize expenses
- Enhance your vital energy – Maximize your income
- Capital and the crossing point
- Manage your finances
Notable Quote: “Money is something you exchange your life energy for. You are selling your time for money. It doesn’t matter that Ned over there sells his time for a hundred dollars and you sell yours for twenty dollars an hour. Ned’s money doesn’t matter to you. The only real asset you have is your time. The hours of your life.
Read a finance book (or five!) this year to improve your financial knowledge. From “The richest man in Babylon», published in 1926, for The psychology of money, written in 2020, the finance books of the last century are full of pearls. And to keep up to date with current financial trends, consult the useful links on http://merrillfinancialassociates.com/useful-links/.