Category: Books

The 10 Best Personal Finance Books for 2020

April is Financial Literacy Month so I wanted to highlight some great personal finance books that are worthwhile reads and why I recommend them.

The internet is a great source for information about personal finance. If you want to know how an index funds work, which debt repayment method is most effective, or how to save money on groceries, you can find ten articles with the information you need to know.

Sometimes, nothing beats an old fashioned book when it comes to learning about a specific topic. There are a lot of books out there on how to earn, save, budget, spend money and invest. But, deciding which book to invest your time and money on can be overwhelming so I’ve a compiled a list of the books I recommend and what each is “best for”. These 10 personal finance books can help you get started on your journey into personal finance.

These are the best personal finance books for 2020:

BEST BOOKS FOR BEGINNERS:

The Richest Man in Babylon

This is a great beginner book and particularly useful for young adults (can be as young as 16) and those that need/want guidance on spending, budgeting and investing at any age. It’s regarded as a classic for personal finance advice.

The book dispenses its knowledge through a collection of parables set 8,000 years ago in ancient Babylon. The main points are: save (at least) 10% of everything you earn and don’t confuse your necessary expenses with your desires; work hard to improve your skills so you can ensure a steady income; and invest your money safely.

I like it because it’s a quick read, easy to understand, and keeps you engaged while offering sound bits of financial wisdom.

Get a Financial Life: Personal Finance in your Twenties and Thirties

This book is aimed at young adults and focuses on the basics. From doing taxes to debt repayment strategies, Beth Kopliner gives a thorough foundation for anyone wanting to establish a financial life for themselves.

Broke Millennial

Author Erin Lowry makes things easy for young adults who are overwhelmed and confused about debt and budgeting with this smart, motivating guide. Promising to show how to go from “flat-broke to financial badass,” it differs from other personal finance books by covering tricky, real-life situations involving money, from managing student loans to not being able to split the bill with friends. Among the plethora of personal finance books made for older people, Broke Millennial offers a fun, relatable take on managing money for beginners.

Rich Dad Poor Dad

If personal finance is new to you, then you might want to check out the 1997 classic, “Rich Dad, Poor Dad.” This book tells parables about personal finance while advocating for real assets and investments, including real estate.
It doesn’t tell you how to build wealth by avoiding Starbucks and fast food; but how to build successful businesses that will create passive income for you. It’s not about asking for a five percent raise at your job, it’s about creating streams of income that will work for you.

BEST BOOKS FOR INVESTING:

The Little Book of Common Sense Investing

This easy to read book shows you an alternative to actively, poorly managed, overpaid funds by introducing you to low-cost, passive index funds as a sustainable investing strategy, which gets you the retirement savings you need without the usual hassle of stock investing.

The Simple Path to Wealth

JL Collins is a huge fan of John Bogle, the founder of Vanguard and the author of the book above titled “The Little Book of Common Sense Investing”. This book is a guide to money and investing for people who realize that money is important, but would rather spend their time raising kids, advancing in their careers, pursuing other passions and making the world a better place. It’s easy to understand and filled with lots of practical advise. It’s one of my favorite financial books.

BEST BOOKS FOR INSPIRATION:

The Millionaire Next Door

To truly understand how to accumulate wealth, business professors William D. Danko and Thomas J. Stanley explore the seven common traits found among millionaires.
After years of research into the wealthy, the authors interestingly found that most of them don’t live in Beverly Hills or drive fancy cars. Instead, these people acquired most of their wealth by working hard, living frugally, and saving most of their money. Contrary to the media’s flashy depiction of millionaires, the book emphasizes how to get rich without needing a high-profile job or degree.

Your Money Or Your Life

This book encourages readers to take a step back and think about the their ultimate goals and how much money they’ll need to get there. The simple premise of the book is the question: How much money are you willing to trade your life for? Whenever you’re working, your trading your life and energy for money. What does that mean to you? Once you’re clear on the “why” behind your saving and spending, making decisions about investing and budgeting becomes much easier. 

BEST FOR DEBT MANAGEMENT:

The Total Money Makeover

When Dave Ramsey talks about money and finances, people sit up and listen. This is no get-rich-quick scheme — Ramsey’s books never are. The book provides a solid foundation for saving enough money so that the next life emergency won’t derail your finances and you can retire comfortably. Ramsey’s foundations, setup as “baby steps” has always involved paying off your debt so you can get there, and he tells you how.

Best For Building Wealth

The Automatic Millionaire

This book is straight forward. It describes how to take the hard work and willpower out of the saving equation by automating your saving and investing. It’s a classic read to learn why it’s so important to set-up a cash flow system that works and to watch out for all of the little expenses. Bach highlights the fact that changing your habits in a way that you can stick to them, and knowing what’s meaningful to you in your own life and prioritizing that, is what’s going to help you succeed.

Summary

Each of these books offers something unique to learn within the personal finance world. They’re all worthwhile but where you start would depend on where you are in your financial journey. If you’re new, I’d start with the books that are best for beginners. If you are in debt, I’d definitely read “Total Money Makeover” by Dave Ramsey. And, if you’re ready to get into investing, I would read both “The Simple Path to Wealth” by JL Collins and “The Little Book of Common Sense Investing” by the great John Bogle.

Happy Financial Literacy Month and happy reading!

~SMJ