Most of what I’ve learned about personal finance, I’ve learned by reading either blogs or books. Every week, I tell you about what I’m reading in the blogosphere, but I thought now would be a good time to talk about some of the personal finance books that have gotten me to where I am today. I hope to review all of these individually and in detail over time, but for now, here is a list. These are all timeless books that I would recommend to anyone looking to learn more about personal finance.
It all started for me, like so many others, with a Canadian classic, The Wealthy Barber by David Chilton. The book isn’t written like most personal finance books. Its not a compendium of financial information. Rather, its a novel that tells the story of a simple barber named Roy, who provides lessons in financial planning to those around him. This is the first book that instilled some of the most basic financial concepts into me, such as saving 10% of your income and contributing to your RRSP.
Though I didn’t end up reading this book until I was in my early 20’s, as a young teenager, my uncle had told me about a book that he had read at my age called The Richest Man in Babylon by George Samuel Clason. The book was published in 1926, but its still extremely relevant and its an extremely quick read. The book uses a number of parables set in ancient Babylon to hammer home the basic fundamentals of financial planning, such as Start Thy Purse to Fattening (i.e. save 10% of your income) and Make Thy Gold Multiply (i.e. invest your money to earn interest).
After starting with those first two gems, the next two books on my list are a pair of books by David Bach that I found sitting on my Dad’s bookshelf on a visit home for the holidays one year – The Automatic Millionaire and Smart Couples Finish Rich (and no, I was not even in a relationship when I read this last one, but I found it fascinating nonetheless). Bach repeated many of the idioms that I’d already read about in The Wealthy Barber and The Richest Man in Babylon but he focuses his main ideas around The Latte Factor, which is essentially asking us to cut out some of the frills in our lives in favour of equally pleasurable yet less exciting/convenient alternatives – i.e. make your own coffee instead of buying lattes at Starbucks.
All these books set me on a great path towards financial responsibility. As I started learning more about investing on blogs, I started digging deeper into some of my options. One of the best investing books I’ve read is The Little Book of Value Investing by Christopher H. Browne. Browne presents his methods for evaluating value in stocks in a short, simple, well-laid out manual. Coping with a lack of funds, about a year ago, I picked 10 stocks I would buy if I could and pretended to buy them (using Google Finance to track their value). In the last year, I am up about 15% overall, which is well outpacing my RRSP low-cost index funds. Though I still haven’t put this knowledge to good use yet, its all there sitting in the back of my mind, ready to spring forth to action when I have some more disposable income and I’m ready to go.
I have to sheepishly admit that I don’t actually own any of these books. I’m a rabid library user, and so I have them all at my fingertips when I want to see them again. But I highly recommend all of them, and I’m always interested in hearing about new books. I just picked up The Wealthy Barber Returns at a friend’s house the other day and flipped through it for a while, but I have to say I was disappointed in what I read. There didn’t seem to be a lot of practical, new advice. Maybe I need to give it more of a chance. Readers, what are your favorite personal finance books. Anything I need to add to my list?Like What You See? Share the Story!
I love the original Wealthy Barber as well – much more than the new one. I like the story. I find the new book to be much more blog-esque. It is well written but I guess being a PF blogger means it doesn’t present anything new whereas the original really opened my eyes.
I also like The Millionaire Next Door, though it can get into the weeds. I am currently reading The Millionaire Teacher by Andrew Hallam and am enjoying it.
I’ve been meaning to check out The Millionaire Teacher as I’ve been hearing a lot of good things about it lately. I’ll have to put it on hold at the library once the strike ends 🙂
Of this list, I’ve only read the David Bach books. The Automatic Millionaire especially was formative for me but they aren’t the type of books that I need to go back to reference.
The book that started me off was Get a Financial Life: Personal Finance in Your 20s and 30s by Beth Kobliner.
Thanks for the suggestion, I will have to look that one up!