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“Did you know that successful billionaires share a common habit? They read—a lot! Warren Buffett, for instance, recommends reading 500 pages every day! He believes that like compound interest, knowledge accumulates over time.
Seriously, reading changes people’s lives. But it’s not just about reading anything and everything you can find, you must read the right books and apply the right principles from the books you read.
Among the 35+ books I have read on personal finance, here are my top ten recommendations that can change your finances forever.
Top Ten Best Personal Finance Books For Beginners.
1. The Richest Man in Babylon by George Clason
2. The Index Card
3. Get Good With Money
4. Rich Dad, Poor Dad By Robert Kiyosaki
5. The Psychology of Money
6. The Total Money Makeover by Dave Ramsey
7. The Simple Path to Wealth by JL Collins
8. Broke Millennial by Erin Lowry:
9. I Will Teach You To Be Rich
10. The Millionaire Next door
1. The Richest Man In Babylon
“The Richest Man in Babylon” is a book by George Clason that tells the story of a poor man who became the “richest man in Babylon”.
It is one of the oldest books on personal finance and in this classic bestseller, George Clason uses relatable stories and parables to teach the basic principles of personal finances like how to generate wealth (referred to as the seven cures to an empty purse), and how to protect and invest wealth (referred to as the “Five Laws of Gold”).
His main advice revolved around saving money, not spending more than you need, multiplying your gold by investing wisely, avoiding investments that sound too good to be true, owning your home, protecting yourself with life insurance to ensure a future income; and striving to improve your earning ability.
2. “The Index Card: Why Personal Finance Doesn’t Have to Be Complicated” by Helaine Olen and Harold Pollack. Published in 2016. Harold claims in this book that the most significant financial advice is so simple that it can be written on an index card. In his words, “if you’re paying someone for advice, you’re probably getting the wrong advice because the correct advice is so straightforward.
The book simplifies financial concepts by compressing the most important ones onto a single index card. Personally, I feel that this is one of the best books a beginner investor will find to guide their financial journey. It covers important topics like saving in your 401(k), paying down debt, and diversifying investments.”
3. Get Good with Money: 10 Simple steps to becoming financially whole by Tiffany Aliche.
In ten simple steps, Tiffany teaches you how to build a brilliant financial future for yourself from scratch. The beautiful thing about getting good with money is that it is not about get-rich quick schemes, or very complicated money management structures.
Instead, the book breaks down financial wholeness into ten simple steps anyone can follow.
Get Good With Money will help you put all the pieces of your financial life together without feeling overwhelmed or ashamed about your current financial state.
4. “Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That The Poor And Middle Class Do Not! by Robert Kiyosaki
Robert Kiyosaki tells us about the different financial mindsets and behaviors between his rich Dad (i.e his best friend’s father) and his poor dad (his own father). His poor dad, who was a well educated man, emphasized the importance of academic excellence, job stability, and living within one’s means.
On the other hand, his rich dad, a successful entrepreneur, believed in gaining financial education, building assets, and investing wisely.
In this book Robert Kiyosaki teaches about the difference between an asset and a liability; the importance of financial education, taking risks and making decisions. He also emphasizes acquiring income-generating assets like real estate and businesses instead of buying liabilities which take money away from us.
It does not just aim at giving ideas of becoming richer but it also meant to encourage people to be self-employed rather than working for others.
He emphasizes that rich people acquire assets meanwhile the poor and middle class acquire liabilities that they think are assets.
One of the core ideas of the book is that the poor and the middle-class work for money while the rich make their money work for them.
He also teaches that it’s not just how much money you make that matters but how much of it you keep.
5. The Psychology of Money by Morgan Housel
Housel explores the psychological aspects of managing money, which are often overlooked in regular finance books. He emphasizes that it is important to develop the right mindset and behaviors so as to build wealth over the long term.
This is more than a financial book as the author teaches that financial success does not only revolve around how much money one has but how he/she thinks and behaves with money. He spends time exploring the complex relationship between human behavior and financial decisions.
Housel shares 19 short but interesting stories exploring the strange ways people think about money and why they make the financial decisions they do.
6. The Total Money Makeover by Dave Ramsey: Dave Ramsey offers realistic strategies in his book to get out of debt and build real wealth.
This book will give you a simple, step-by-step plan to move from where you are financially, to where you desire to be; by changing how you spend and what you spend on. The book will challenge your financial priorities and realign your resources to achieve the financial goals you’ve set.
7. The Simple Path to Wealth by JL Collins is one of the best personal finance books for learning about investing and achieving financial independence. Collins offers and emphasizes a straightforward approach to investing that can help you set up a plan to retire early and comfortably.
The book is very engaging and was written with new investors in mind. Collins covers key investing principles, specific investment strategies, and how to avoid financial schemes. Shares practical wisdom to help you make your money work for you
The simple path he presents is easy to understand and implement, yet even more powerful than complex alternatives.
So, if you want to achieve financial freedom with minimal effort, “The Simple Path to Wealth” may be your go-to resource.
8. Broke Millennial by Erin Lowry:
Broke Millennial by Erin Lowry is another excellent beginner personal finance book. Written specifically with millennials in mind, the book covers every financial challenge a millennial would have; like student loans, homeownership, budgeting, saving and investing, etc.
These days, young adults face unique financial issues like the rising cost of living, an ever-increasing inflation rate, having to juggle multiple jobs, moving back in with parents and navigating money in relationships, etc. Lowry addresses these real-life money issues in a way they would understand and gives answers to some very important questions.
9. Another book I highly recommend is “I Will Teach You to Be Rich” by Ramit Sethi. This comprehensive guide covers the four major pillars of personal finance: banking, budgeting, investing, and saving. Sethi provides a detailed six-week plan to help readers turn their finances around, with actionable tips that can be implemented immediately.
10. The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas J. Stanley, Ph. D
In the book The Millionaire Next Door, Dr. Thomas identifies seven common traits that show up again and again among the wealthiest millionaires.
Some of them include;
a. Living Below their Means (Millionaires prefer to live simply and spend less than they earn rather than flaunting their riches with expensive possessions. This allows them to save and invest a significant portion of their income.)
b. Focusing on Building Wealth, Not Just Income: Having a high income does not necessarily equate to being wealthy. Millionaires prioritize building assets and net worth over a high-consumption lifestyle. As a bonus in the book, there’s a formula to assess if your net worth matches your income level.
c. Investing in Themselves: Millionaires invest in developing their skills and knowledge to increase their earning potential, rather than just pursuing the highest-paying job.
d. Being Disciplined with Money: Millionaires have a financial plan and stick to it, avoiding impulse purchases and lifestyle inflation. They are intentional about how they spend and what they spend on.
e. Surround Yourself with Successful People: Millionaires tend to associate with other financially successful individuals who can provide advice and support on building wealth. The company you keep can influence your financial habits.
In summary, these key lessons can help even the most ordinary individuals become millionaires over time. Get it here:
Summary
In conclusion, these books serve as invaluable companions for beginners on the journey toward financial literacy. You can build a solid foundation for managing your money, making informed decisions, and achieving your financial goals just by wholeheartedly absorbing the wisdom within these pages.
Whether you’re trying to pay off debt, seeking to be financially free as soon as possible, looking for helpful budgeting tips, or simply trying to understand your money, there’s a book in this list for you.
Remember, the key is not just reading these books but applying their principles to your own financial journey.
Regardless of your financial situation, reading books that provide practical advice and insights can be a valuable investment in your financial future.
Resources
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