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We cannot stress enough the importance of learning as much as possible about money and personal finance. In our experience, we have found the following books to be absolutely outstanding:
I. Investing
The Elements of Investing, Burton Malkiel and Charles Ellis
This is Burton Malkiel's latest book on investing. Along with Charles Ellis, Dr. Malkiel perfectly describes the investment rules and principles each individual needs to successfully invest.
The Random Walk Guide to Investing, Burton Malkiel
This book is an excellent primer on the subject of investing. Although it is fairly basic and easy to read, it covers all the essentials that anyone that is investing should know. It is a digestable version of the 1973 classic "A Random Walk Down Wall Street".
Some other notable books on investing are:
The Coffehouse Investor, Schultheis (very easy content)
The Bogleheads Guide to Investing, Larimore (moderate content)
The Four Pillars of Investing, Bernstein (advanced content)
II. The Emotional Side of Money
Conscious Finance, Rick Kahler and Kathleen Fox
(as borrowed from consciousfinance.com): “Self-destructive or ineffective financial behavior has little to do with how much money we have. Whether we have little money or whether we are wealthy, our relationship with money can be a source of deep pain and damaging chaos. Conscious Finance helps readers understand that financial decisions are governed, not by logic and facts, but by our emotions and beliefs about money—beliefs we don’t even know we have. It provides solid, practical tools for understanding and reshaping the unconscious assumptions that keep us stuck.”
This book is recommended for anyone who has a desire to look a little deeper into their relationship with money. For anyone that wants to explore this topic even deeper, "The Seven Stages of Money Maturity" by George Kinder is an excellent choice.
III. Spending, Saving and Managing Debt
How to Get Out of Debt, Stay Out of Debt and Live Prosperously, Jerrold Mundis
If you find yourself in significant debt, this is the book to read. The author does an excellent job not only with the mechanical process of getting out of debt but also the emotional and psychological aspects. The result is an extremely healthy process for individuals to get themselves out of the red.
Although we highly recommend this book to people with debt problems, it also has some messages that are appropriate to almost anyone.
All Your Worth, Elizabeth Warren and Amelia Warren Tyagi
This book should be required reading for everyone - although it is especially useful for young individuals and families. It provides information on how to develop a balanced approach to money and life. This balance largely comes from taking control of your "Must Haves", "Wants" and "Savings" in a mindful manner.
Your Money or Your Life, Joe Dominguez and Vicki Robin
First published in 1992, this book has some timeless concepts about how to maximize the benefit that you receive for the amount of “life energy” that you spend working. Although the book lays out nine steps for achieving “Financial Independence”, we find steps two through seven to be by far the most valuable. In a nutshell, the message of this book is to:
- Understand where your money goes
- Spend less on the things that bring you little value
- Spend more on the things that are aligned with your values and beliefs
- Maximize the value of your purchases
- Maximize your income potential
Although we do not agree with the author’s ideas regarding inflation and investing, the approach to spending and earning make this an excellent book for just about anyone.
Affluenza: The All Consuming Epidemic, DeGraaf, Wann & Naylor
This book looks at our society’s attitudes and practices regarding spending and consumption and compares it to an epidemic that it has coined as “Affluenza”. Overall, the book provides a valuable look at our society’s often unhealthy spending and consumption habits.
IV. Retirement
The New Retirementality, Mitch Anthony
This is one of our favorite books on the topic of preparing for retirement. The overriding message of this book is that retirement is much more than an economic change in life. Successfully preparing for retirement includes much more than stockpiling a huge amount of money. The key to success lies in transitioning from full-time work to a life that includes things that are meaningful to you.
The book does an excellent job of questioning the longstanding beliefs that it is always a good thing to retire early and live the “good life”. Although a life centered around activities such as golfing fishing and shopping may seem appealing, many people are surprised to find out that they are quickly bored and unfulfilled in the absence of more meaningful activities.
We highly recommend this book to anyone that is even beginning to think about what they may do with themselves after their full-time careers have ended. Another excellent book on this topic is "Portfolio Life" by David Corbett.
V. Estate Planning
The ABA Guide to Wills & Estates, The ABA
Although this is not the most interesting topic, this book does a great job of explaining some fairly complicated issues in a fairly understandable way.
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