“Books are the quietest and most constant of friends; they are the most accessible and wise counselors, and the most patient teachers. – Charles W. Eliot.
As the holiday shopping season begins, I thought I’d share these personal finance and investing books that have been my best “friends”, “advisors” and “teachers”. If followed, these books have the power to change your financial life and the life of someone you know.
For the young or new investor, I cannot recommend a better book. The Bogleheads’ Guide to Investing explains in an easy to understand way investing, mutual funds, bond funds, asset allocation, taxes and more. I bought this book for my sister earlier this year. Having no investment experience, she said the book was very easy to read. She now also regularly invests in her 401 (k)! If you or someone you know is intimidated by the idea of ââinvesting, this book is a must read.
If you or someone you know is raising children, this book is a must have. I’m struggling to find the best way to teach my kids about money. Are you paying an allowance or not? Do you tie the allowance to household chores? How do you teach your children to be responsible with money? Raising Money Smart Kids (Kiplinger’s Personal Finance) answers these and other questions. The book is easy to read and gives lots of great ideas. With two teenagers, I cannot stress the importance of teaching children at a young age the right attitudes towards money, and this book can help.
Whether you are a beginner or unsatisfied with your career, what color is your parachute? (2011) can help you determine what type of job you would like the most. What Color Is Your Parachute Binder: How to Create an Image of Your Ideal Job or Next Career is an accompanying binder that is also worth considering. Both books can also help you if you’ve lost a job or are considering a career change.
For the not-so-new investor, The Intelligent Asset Allocator is a great book for learning some of the more advanced concepts in asset allocation. If you’ve read this book, two good alternatives are The Four Pillars of Investing and All About Asset Allocation. So once you’ve read The Bogleheads’ Guide to Investing and are looking for more advanced material, these books are the best of the best.
Your money or your life describes very well how our lives and our money should interact. This book will certainly give you a new perspective on money and work. A note of caution, however. The book includes chapters on inflation and investing that are really misguided. But the rest of the book is worth reading, especially if you or someone you know is having trouble controlling your spending.
This book can be a real paradigm shift if you envision most millionaires as driving expensive cars and living in mansions. The Millionaire Next Door describes how most self-made millionaires actually live. I’ll give you a hint: they live modestly. I think some of the millionaires described in this book go to an extreme that most of us would find unacceptable. But there are some important lessons to be learned here that can help us achieve financial independence.
Written by Kimberly Palmer of renowned US News & World Report, Generation Earn is a recently published book that is ideal for young adults. I’m working on a full review of the book Know, but an important aspect of this book includes real-life examples of how young adults have managed their financial lives. It helps to hear about mistakes and successes that others have experienced. The book also takes controversial approaches to certain aspects of money, particularly debt. Rather than just aligning with traditional finance books, Generation Earn takes a fresh approach to money issues that have plagued people for generations.
If you’ve read other great books on personal finance or investing, share them in the comments below.