I began my foray into personal finance through reading personal finance books. Although I was dabbling in personal finance already before reading personal finance books (and of course, not completely understanding it), it wasn’t until my friend told me about a book called The Wealthy Barber that I became really interested in personal finance and investing.
The Wealthy Barber led to me reading other great personal finance books. Although I haven’t read as many personal finance books as Teacher Man probably has (what was the last count, Teacher Man? 232? 😉 ), I think I have read my fair share (to the point that I probably lost count).
So I thought I would share with you my thoughts on the top five personal finance books you should read. These five are great books with enough personal finance to wet your appetite for more personal finance. I am even giving you a chronological suggestion on which books to read first, look at that!
Findependence Day Review
This book is written by Jon Chevreau who is currently the editor of Moneysense Magazine (a great magazine to subscribe to, by the way). If you are interested in a fictional piece with personal finance information sprinkled and seemingly hidden within the prose, this is the book to read.
It follows the life of a couple, very much like you, who are interested in seeking financial independence. The book gives the concept of personal finance relevance to your own life. I really liked it because it is very relevant and isn't too “high level” so that it piques your interest in personal finance just enough for you to get interested in reading other books.
This is the first personal finance book I read and I instantly became hooked. Since then, the author, Dave Chilton, has written another book. This book also follows characters as they learn about personal finance while talking about it in a barber shop. It’s similar to Findependence Day in that personal finance information in sort of hidden or weaved into the writing in a very stimulating way. I highly recommend this book especially if you are Canadian!
After learning about the relevance and meaning of personal finance in the context of our day to day lives, by this time you’re probably interested in learning about how to change your current saving habits. The Automatic Millionaire by David Bach is another great read- he emphasizes the concept of paying yourself first. This is probably by far the most important concept of personal finance and saving that you should take home.
Although some of the examples he uses are not as relevant in our current economic situation with the stock market (8% returns aren’t really the norm these days), there is still some great information in this book.
This book is written by Andrew Hallam, who is an expatriate, a school teacher, living in Singapore. He shows you that you can be a millionaire even though you don’t have a six digit salary. Andrew Hallam is no-nonsense and the book is an intermediate read. He helps you pique your interest in investing, especially index investing, which he is a big fan of. Index investing is the way to go. Say no to mutual funds 😉
I saved this book for the last spot in this list because I found that it was the most difficult to read, though I would definitely recommend this book for anyone who is interested in purchasing stocks in the stock market, or investing. This book teaches you what indicators to look for and how to buy value stocks and what dividend investing is. It’s a great read and the recent edition includes commentary after each chapter in more “laymen’s” language and terminology (e.g. so I could actually understand the book lol).
These five books are by far my favourite personal finance books (trust me, there are a lot of junky books out there) and I highly recommend that you read them if you’re just starting to get into the realm of personal finance. These books can help you jump from a personal finance newbee to someone who feels comfortable with saving, investing, and understanding that to save, you need to spend less than you earn. 😉
Readers, what are your favourite personal finance books?