Here is a list of books that I’ve personally read and recommend. I think it’s a good idea to commit to life-long learning and understand different points of view. When pertaining to finance, it’s important to learn about different strategies that have worked for different people and apply what works to your individual situation. All of these books have added value to my life.
The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John C. Bogle – Bogle is the founder of Vanguard and creator of the first index mutual fund. This book explains why the everyday investor is better off investing in an index fund, as opposed to an actively managed fund. He talks about the statistics of winners and losers in the managed money business in plain language, which is valuable for every investor to understand.
The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel by Benjamin Graham – Graham is renowned to have been Warren Buffett’s mentor. He defined value investing and insists on long-term investing.
The Warren Buffett Way by Robert Hagstrom – Hagstrom takes a look at how Buffett created his wealth by looking into his past. He documents how he grew up and analyzes the investment transactions that made Buffett a billionaire. Most astonishing are the charts that demonstrate the power of compounding. I read this one on my honeymoon in Tahiti. Romantic, eh?
The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach – This book is all about setting up automatic withdrawals from your paycheck or bank account to invest for your future. The catch phrase here is Bach’s famous “latte factor,” which describes how spending a little bit here and there really adds up. I think the biggest misstep in the book was mentioning that real estate always increases in value. It’s also a bit misleading to say that it’s a one-step plan. Every action plan included more than one step. Still, the book is a decent read and can help beginners take action towards spending less and saving more.
The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas Stanley & William Danko – Stanley and Danko conducted studies of millionaires to find out more about their lifestyles and habits. Surprisingly, they found that people who appeared to be rich were deep in debt. True millionaires were found to be humble and lived frugal inconspicuous lifestyles. It’s pretty interesting to find out how they profiled wealthy individuals to detail what kind of cars they drive and how they made their money.
The Money Class: How to Stand in Your Truth and Create the Future You Deserve by Suze Orman – OK, so a lot of financial bloggers dismiss Orman because of her style and her infamous debit-card, but I do think that she does have some good advice to give in this book. Her catch-phrase is “stand in your truth.” It basically means that you should get to know yourself and accept the reality of your life. Then, you can truly take the action necessary to become financially secure. I’ll admit, I listened to this one as an audio-book while driving to Las Vegas.
The Total Money Makeover: A Proven Plan for Financial Fitness by Dave Ramsey – Another controversial financial guru with a mantra, “If you live like no one else, later you can live like no one else.” I didn’t really care for the religious aspect of this book, but I think a lot of people can identify with it. The book details 9 “baby steps” that you can take in order to achieve financial fitness. The plan will work for those that need to pay down debt and get a fresh start. However, if you are a disciplined individual, I think it’s quite alright to ignore the advice to pay for everything in cash. I also think that most people will need much more than a $1,000 emergency fund to start. I used Ramsey’s plan to develop my own plan and paid off over $57,000 in debt in less than one year. Read my book review.
Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Ind ependence: Revised and Updated for the 21st Century by Vicki Robin & Joe Dominguez – This book is life changing. The basic concept is that money really represents your life essence – or time. They walk you through how to figure out your “real wage” and the steps to financial independence, or FI. Many readers debate the validity of investing solely in Treasuries, but I think those readers missed the point. You need to read this book.
Self Help & Philosophy
Man’s Search for Meaning by Viktor Frankl – Frankl details his real-life account of events at Nazi concentration camps, including Auschwitz. He discusses the psychological perspective on human suffering, the will to survive, and finding meaning in life. It will be rare for anyone to have experienced hardship like the people depicted in this book have. Reading this book will put your life in perspective.
Who Moved My Cheese?: An Amazing Way to Deal with Change in Your Work and in Your Life by Spencer Johnson – This is a simplified tale about how humans deal with change. Most of us hate, and are resistant to change. We get used to the way things are and become comfortable with our lives. It’s totally normal. However, in order to adapt and overcome, we need an attitude adjustment and tools to deal with change. Spencer offers some simple solutions on how to detect and handle change. Read my book review.