10 Life-Changing Personal Finance Books For Beginners — Joney Talks!
These 10 books will help you achieve your financial goals
If you are new to the personal finance world and you want to take control of your finances, a fantastic and rather inexpensive way to get started is to read books about personal finance and money. Reading books on any topic you wish to know more about is a good idea in general anyway. (-> Mindblowing advice! Thanks, I know 😉)
The bad news: You will find tons of books on all sorts of subtopics: Basic personal finance, money management, budgeting, investing in Real Estate, stock markets basics, Value Investing, Money mindset,… and it can be overwhelming at first.
The good news: Most personal finance books are written in simple language and do not require an advanced Ph.D. in econometrics. The most influential personal finance books I have read and heard about are accessible to anyone. And with a couple of friends, we came up with this list of 10 accessible books we warmly recommend for any Personal Finance newbies.
As you will see some of these books are more than simple money guides with basic tips: Some will help you save serious money, some will help you invest better and some have the power to really turn your life upside down! Books hold great power and are underestimated assets.
Anyway and in no particular order, here are the 10 books on Personal Finance I would recommend to anyone!
Young Fun and Financially Free by Leanna Haakons
This is a practical and easy Money 101 guide for starters. The book is an accessible and quick read (easily under 3 hours), there is no fluff and is to the point.
Here is why I would recommend it to beginners :
— The tone is light, young, and fun as in the title.
— Something that made the book stand out is that the first chapter is dedicated to one’s mindset (many Personal Finance books start on straight with budgeting and saving money), which I think is crucial and the author does that well.
— Each chapter is summarized at the end and which makes it easy to identify the key points.
— Leanna shares her frugality tips but the underlying thinking is preservation, not deprivation.
— If you live in the US or Canada, there are some nifty recommendations on services, brokers,…
— Another thing I haven’t seen explained so much in other PF books is the importance of insurances and how to prepare for unexpected events, there is even a paragraph on cyber-security.
— At the end of the book, she talks about building a Dream Team of experts (bankers, financial advisors, mortgage brokers, lawyers,..) and your Core Support System two important groups of people that will indeed help you on your journey to financial freedom! (again another key element not often mentioned in your classic “PF manual”).
— The author shares her personal stories and anecdotes throughout the various chapters of the book which makes it more relatable and not just preachy.
Finance, index funds, saving money,… may scare off (or bore) most young people in their early 20s, and with this book, the author wants to make it easier and funnier to learn about managing one’s finances and she does it well.
I Will Teach You To Be Rich, 2nd edition by Ramit Sethi
Ramit is one of my financial heroes and the great thing with this book and the information he gives out, in general, is the psychology aspect of money.
This book can be used as a 6-week program to get hold of your finances: It deals with credit cards, automating your finances, negotiating your recurring bills, spending on the stuff you loooove, focusing on Big Wins like negotiating your salary, investing in the stock markets, etc All of the steps are meant to shake your beliefs on money and help you achieve your Rich Life (which will be unique to you). If you are in your twenties or thirties this is an absolute must-read to get started with dealing with your finances responsibly. If you are more experienced, getting a new perspective on managing your personal finance will yield positive results.
I read both editions and reviewed the first one here, but I’d recommend reading this second edition since it is more up to date.
For the specifics of your country on retirement accounts and banks, you will have to research yourself locally, but the general principles of the book and the psychology around money apply to all of us. There are several more local versions of that book as well for France, Germany, and the UK for example.
Broke Millennial by Erin Lowry
I did not read this one but my friend Jessie from Metalhead Money and Alternative Control told me she would recommend to PF (Personal Finance) newbies and kindly wrote a short review for us.
Broke Millenial is an excellent read for personal finance beginners. Author Erin Lowry gives a humorous and practical intro from a Millennial perspective, addressing topics like setting freelance rates and getting out from under student loans — in addition to the standard “contribute to your 401K” stuff. There’s even a chapter on negotiating the dynamics of living at home as an adult, which is a reality for many people in our generation — and a great way to knock out those student loans, like it or not.
For me, it was refreshing to read a PF book that acknowledged the financial climate that Millennials exist in rather than blaming imagined “avocado toast” habits for our challenges. Put it on your reading list!
PS: By the way, Jessie also just released her book, check it out here!
The Richest Man in Babylon by George S. Clason
This one is a classic in the personal finance space containing the usual money tips and told in a parable style. The interesting thing is that the book was written in 1926 and the principles still apply today. I listened to the audio version and it takes about 3 hours and a half.
Here is the summary from Wikipedia: The parables are told by a fictional Babylonian character called Arkad, a poor scribe who became the “richest man in Babylon”. Included in Arkad’s advice are the “Seven Cures” (or how to generate money and wealth), and the “Five Laws of Gold” (or how to protect and invest wealth). A core part of Arkad’s advice is around “paying yourself first”, “living within your means”, “investing in what you know”, the importance of “long-term saving”, and “homeownership”. The content is from a series of pamphlets distributed by U.S. banks and insurance companies in 1920–24; the pamphlets were bound together and published as a book in 1926.
The Simple Path to Wealth by J.L Colins
This one will challenge your ideas and fears about investing in the stock markets.
It is an excellent book to understand the basics to start investing. It is called the Simple Path to Wealth, but it is also made simple to understand if you are not familiar with investing and index funds. I am used to US-centric books and, in general, that is not a problem. The fundamental principles are the same and applicable wherever you are and for the specifics, you need to check in your own country. There were, for example, a few chapters (20–23 in particular) I had to skip since it really is for the local market only with Roth IRAs and all the stuff we have (or not) in other forms in the rest of the world. If you live in the US and want to get started with your route to Financial Independence, I would highly recommend it. If you live in Europe or any other country, you are still welcome to read it and we will have a podcast episode where one of my guests explains how this book can be applied in Belgium. So stay tuned!
If I had to summarize the book in one sentence it would be: “ VTSAX and chill “
PS: VTSAX is a Vanguard Total Stock Market Index Fund
Your Money or Your Life by Vicky Robin and Joe Dominguez
I listened to it during a few long car trips. The concepts are absolutely solid and will challenge your current relationship to money. The author challenges your purchasing habits, your beliefs about money, work, your career, how you spend your free time, etc.
As an example, those questions are asked to the reader/listener :
Do you have enough money?
Are you spending enough time with family and friends?
Do you come home from your job full of life?
Do you have time to participate in things you believe are worthwhile?
If you were laid off from your job, would you see it as an opportunity?
The author proposes a clear 9 step plan to help you on your way.
The book can sound repetitive at times but it is an absolute must-read to help you on your path to exchange more “life energy” for the things that matter to you!
The Millionaire Next Door by Thomas J. Stanley and William D. Danko
When you hear the word Millionaire, what does that evoke? Do you think about the movie stars from MTV Cribs (for those who remember the show), successful athletes driving fancy sports cars, politicians in Italian tailor-made suits? While these people certainly make millions, there exists a far more silent majority of millionaires around, and guess what? Your neighbor might even be one of them.
The Millionaire Next Door was first published in 1996 and is an eye-opening book about how most people have it all wrong about how you become wealthy. The authors did a 20-year extensive study of more than 1000 millionaires — people with a verifiable net worth of $1 million or more — and drew conclusions on what factors lead to their financial success.
Some of the common traits of these millionaires include frugality, their focus on building wealth and not on displaying those status symbols, etc. The tone might not be as young and fun as Leanna’s book but I warmly recommend it as well! And you can find a more detailed review here.
Think and Grow Rich by Napoleon Hill
Here is a short review by my amigo Tony from One Million Journey who literally could not believe I have not read it yet!
Think And Grow Rich is a personal development and self-improvement book written by Napoleon Hill during the great depression. Despite being old as gold this book keeps selling to newer generations, as it has become a must-read for everyone wanting to know how to attract money.
Napoleon Hill studied many wealthy people for over 20 years and wrote the 14 principles that made these people rich. I also found this book encouraging and motivating. The great depression was tough for many and that had an impact on the way books were written at that time. Many are now experiencing tough times, so reading Think And Grow Rich could be helpful to get a motivational push or simply new ideas.
By the way, I loved this book so much that I wrote my own Think And Grow Rich statement and definite plan to become a millionaire in ten years. Maybe, it will inspire you to take a similar approach if you read it?
Gracias again Tony and I promise I’ll still read or listen to it this year (it’s been on my Audible app for ages).
Secrets of the millionaire mind by T. Harv Eker
Before you dive into budgeting and planning your Rich Life, one thing to set right is your “Money Blueprint” or money mindset.
The money blueprint as described in the first part of the book will teach you how your thoughts about money stem from childhood experiences and how you still react to that today. You will replicate or rebel against the culture, the environment, the beliefs you grew up with. As an example, you could “rebel” today by spending excessively while you grew up with frugal parents.
I really enjoyed that part of the book as it made certain patterns, behaviors in people around me more clear to understand. And although the book is primarily focused on money, you can apply the same logic to other aspects of our lives. This is the part where I got the most value from the book, this part alone is worth the purchase.
The second part of the book is divided into 17 “wealth files” and will also give you some food for thought to help you revise your money blueprint and work towards achieving your financial goals. I deem this book an essential read and suits beginners very well! What I found fantastic is the fact that you are provided with the tools to identify and change your money blueprint and to set it for success!
The 4-Hour Workweek by Timothy Ferriss
This is one of my top 3 books of all-time and while not exactly a personal finance book, it is one of the few books I really got excited about as I was reading it and it certainly deserves a spot in this list Here is what my friend Matt @matt_OMB who nudged me about shared on Twitter:”It contains a lot of information on mindset and automation. While not really a PF book the section on goal setting and handling fear is worth it.”
I absolutely agree with and in addition, I want to add the passage of The Parable of the Mexican Fisherman and the Banker which deals with setting priorities in life and also indirectly impacts how you view your finances. You can read the full parable here.
The book contains many more golden nuggets, you can find some more in this book review.
Honorable mention
Work optional by Tanja Hester, read the book review by Financial Mechanic: My Work Optional Life.
Bringing it altogether
There are even more books that could have made the list but I wanted to advise about those I or my trusted friends actually read and would recommend to beginners. The books in this list offer a lot of value on a wide array of topics: Basic budgeting, credit cards, automation, priority setting, money mindset, evidence that growing your wealth is not that hard, and so on. So unless you want to go deeper on certain topics or look for country-specific variations you should be pretty set for life in terms of personal finance knowledge. And you can also think of it this way, with each book priced between 10 and 15 euro or dollars, you have all the knowledge you need for maximum of 150 dollars, isn’t this amazing?
And tell me, have you read any of those? Did they help you on your way to reaching your financial goals? What other books would you recommend to PF beginners?
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Originally published at https://joneytalks.com on August 27, 2020.
