In this guide, we will explore our pick of the six best-selling, highest-rated, and beginner-friendly books on finance to help you improve your financial literacy and make the best decisions with your hard-earned cash. Beginners’ corner:
What is Investing? Putting Money to Work 17 Common Investing Mistakes to Avoid 15 Top-Rated Investment Books of All Time How to Buy Stocks? Complete Beginner’s Guide 10 Best Stock Trading Books for Beginners 15 Highest-Rated Crypto Books for Beginners 6 Basic Rules of Investing Dividend Investing for Beginners Top 6 Real Estate Investing Books for Beginners 5 Passive Income Investment Ideas
#1 Ramit Sethi “I Will Teach You to Be Rich”
In the mold-breaking New York Times and Wall Street Journal bestseller “I Will Teach You to Be Rich,” Ramit Sethi, dubbed the “wealth wizard” by Forbes, outlines a 6-week program for making and saving more money. While geared towards millennials and beginners in finance, if you’re new to the FIRE (financial independence, retire early) movement, this book is a must-read, no matter your age. The book is a step-by-step guide to determining what constitutes your personal “rich life” and how to set up a “conscious spending plan” so you can spend money on the things that make you happy by ruthlessly cutting out the things that don’t. In particular, the book is packed with actionable advice, helpful money lessons, and simple steps to improve your overall relationship with money. Among its many lessons, the book will provide practical advice on how to:
Save money while still treating yourself to that daily latte; Deal with recurring expenses like phone and insurance bills; Talk about finances with your partner; Crush your student loan debt; Automate your finances, so your money goes where you want it; Set up low-cost, high-interest bank accounts; Wiggle your way out of late fees; Apply set it and forget it (or buy and hold) investment strategies to beat the market; Manage major purchases and expenses (e.g., buying a car, house, paying for a wedding); Negotiate a raise.
#2 Erin Lowry “Broke Millennial”
In another book directed towards avo-toast-brunching Millenials, author Erin Lowry breaks down how 20 to 30-somethings can get in control of their finances. Filled with refreshingly straightforward advice and personal anecdotes, “Broke Millennial” is the ultimate handbook every financially clueless millennial needs to become a responsible spender. The book is loaded with helpful tips for beginners and will teach you how to navigate the market in alignment with your beliefs as well as values. From understanding your relationship with money to managing credit card debt or student loans to budgeting and investing, this book covers young people’s most significant money challenges today. Additionally, readers can expect tips on:
How to open up the big money talk with your partner; Budgeting styles including the Cash Diet, Track Every Penny, the Envelope system, Percentage Budgeting, and Zero Sum budgeting; Choosing the best financial products (i.e., savings accounts); How to use credit score to your advantage.
#3 JL Collins “The Simple Path to Wealth”
Grown from a series of letters from the author to his daughter to help her with her financial planning, “The Simple Path to Wealth” represents the perfect primer for casual investors who want to grow their net worth without spending all their time watching Wall Street. Collins argues that money is one of the most critical tools to navigate the world, and as such, understanding it is paramount. The book goes straight to the point with clear advice on investing and ultimately proposes that investing at its core is simple. The book is written in an informal tone but doesn’t shy away from diving into more complicated topics, either, and is the perfect choice to ease you into the process of achieving financial success one step at a time. After reading this book, you’ll feel more confident in implementing your investment plan. You’ll find detailed lessons on:
What is and how to avoid debt; Importance of having F-you Money; Investment strategies that work; The stock market and how to take advantage of it; Investing in bull or bear markets; Wealth building and preservation phases of your investing life and the asset allocation that goes with it; Simplifying the world of 401(k), 403(b), TSP, IRA, and Roth accounts; Introduction to TRFs (Target Retirement Funds), HSAs (Health Savings Accounts), and RMDs (Required Minimum Distributions); Investment advisors and whether you need one at all; What is the 4% rule, and how to safely spend your wealth; The truth behind Social Security; And much more.
#4 Vicki Robin “Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence”
Vicki Robin’s “Your Money or Your Life” can be considered one of the most influential books ever written on personal finance. With over a million copies sold, readers can expect to find tried and true techniques and advice on achieving financial independence. On top of traditional financial guidance, this revised edition will cover current topics like index funds, managing side hustles and freelancing, tracking your finances online, as well as having hard conversations about money. The book is structured as an easy-to-follow nine-step program to help you start organizing your finances from a total net worth perspective, not just budgeting from paycheck to paycheck. The steps are concrete and straightforward, making it simple for beginners who don’t know where to start and what to prioritize. While it does provide saving and earning money tips, there is a significant focus on how to change your mindset and relationship with money and jobs. You’ll find practical advice on how to:
Crush debt and develop savings; Create mindful money habits, rather than stick to strict budgeting; Minimize your life and live well for less; Make your savings work for you; Start consciously investing; FIRE your life.
#5 Morgan Housel “The Psychology of Money”
Morgan Housel’s “The Psychology of Money” is a must-read on personal finance and the psychology of money. We can agree that many decisions around money are taught to be made through a mathematical point of view, where data and formulas show us precisely what to do. However, in reality, people don’t make financial decisions on a spreadsheet. Instead, those decisions are made at the dinner table or in meeting rooms, where personal history, the person’s unique view of the world, ego, pride, risk tolerance, and odd incentives are scrambled together. Indeed, doing well with money isn’t necessarily only about what you know. It’s about how you behave, and behavior can be hard to teach. The book gives readers tips and tools for combating these biases in the form of 19 short stories exploring the peculiar ways people think about money and teaches you how to start looking at the emotional and behavioral aspects of investments. Some of the book’s topics include:
How to cut down on unwanted spending and increase savings; The importance of emergency savings; How to hold your investments for a long time; Predicting the market and why it’s a bad idea; How and why to start investing as soon as possible.
#6 James Clear “Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones”
“Atomic Habits” is a New York Times bestseller by author and behavior science expert James Clear. In the book, the author draws on the most proven ideas from biology, psychology, and neuroscience to summarize how we can transform our lives by making minor tweaks to our daily routine, referred to as “atomic habits.” Ultimately, this book can provide valuable insights and strategies for changing your behavior to better suit your financial goals. Indeed, it can be hard to establish good spending habits and stay consistent when it comes to managing your finances, no matter how many tools and resources you have at your disposal. For example, many things are out of your control – the stock market, interest rates, inflation, etc. Importantly, you can control your behavior and how you respond to financial opportunities and challenges. James Clear argues that the problem isn’t you if you’re having trouble changing your habits, but your system. Essentially, bad habits repeat themselves, not because you don’t want to change, but because you have the wrong system in place. So, to reshape the way you think about progress and success, the author offers a proven framework for achieving your goals by revealing practical techniques to teach you how to change your habits and master the tiny behaviors that lead to remarkable results. “Atomic Habits” will give you various tips on managing your finances, such as:
How to not focus on your financial goals but rather on the systems that will lead you there; Tracking your money habits and progress; Developing consistency to stick with good money habits (“fall in love with boredom”); How to stay patient; Make time for new habits; Design your environment to make success easier; How to get back on track when you’ve fallen off the course; And much more.
Indeed, that is precisely why financial education is necessary, to understand the subtle shades of gray hiding behind all the investment half-truths.
