Top Personal Finance Books That Can Change Your Life
Personal finance books are a great way to learn about money and how to manage it effectively. The average millionaire reads two to three books per month. This helps them stay informed and make good decisions with their money. So if information is power, then finding the right books on personal finance should be one of your priorities. But with so little time available, how do you know which book to start with?
Personal finance is a broad topic, so it is important to choose one that covers the specific area you’re interested in. For example, if you want to learn about investing, you’ll need to find a book that covers this topic in depth.
Another thing to consider is the author’s credentials. Make sure the author is an expert in their field and has written other books on the subject. This will ensure they know what they’re talking about and provide accurate information. In addition, some personal finance books can be quite technical, so it is critical to find one that is written in plain English. This will help you with your long term financial goals.
The following are some of my favorite books on personal finance that helped me on my journey to financial freedom.
Rich Dad Poor Dad, By Robert Kiyosaki
In Rich Dad Poor Dad, Robert Kiyosaki tells the story of his two fathers: his birth father (poor dad) and the father of his best friend (rich dad). Kiyosaki grew up in Hawaii, and his poor dad was a highly educated man who worked hard for the family but never seemed to get ahead financially.
His rich dad, on the other hand, was less educated but had a successful business career.
Kiyosaki argues that the biggest difference between the rich and the poor is not education or intelligence but mindset. The rich think differently about money than the poor do. They see it as a tool to be used to create more wealth rather than spending it carelessly.
Kiyosaki’s rich dad taught him four important lessons about money:
- The importance of financial literacy;
- The power of investing;
- The danger of debt; and
- The difference between an asset and a liability.
Rich Dad Poor Dad is an insightful book that offers valuable lessons about money and wealth. It is well worth reading for anyone who wants to improve their financial situation.
The Millionaire Next Door, by Thomas J. Stanley
The Millionaire Next Door is a 1996 book by Thomas J. Stanley and William D. Danko. It is based on an extensive study of millionaires conducted by the authors. The book’s central thesis is that the vast majority of American millionaires are self-made, middle-class people who live relatively modest lifestyles.
Contrary to popular belief, people who are worth seven figures are simple and frugal. Although social media portrays rich people flaunting their money, the reality is that most millionaires are not big spenders. The reason they have money is that they’re discipline with their spending.
Here are fours habits this bestseller reveals about millionaires:
- They value financial independence over status.
- They live below their means.
- They educate themselves by reading books.
- They surround themselves with experts.
This book was a great read. It was fascinating to learn about how millionaires think and behave. It’s interesting to see how wealthy people are in real life than in social media.
The Total Money Makeover, by Dave Ramsey
The Total Money Makeover is a book by Dave Ramsey that provides readers with a step-by-step plan for getting their finances in order. The book covers topics such as budgeting, debt reduction, and investing and includes several helpful tips and resources.
I like the no-nonsense approach by Ramsey, where he tells it like it is. He describes how most people in the United States already have what it takes to be financially independent; but they just lack discipline and awareness.
These are the four lessons I took from this personal finance book:
- Debt is the biggest drag on your finances.
- Buy a leased car instead of a new one.
- Budget with the envelope system.
- Get rid of credit cards.
Most books that try to teach you about managing money are based on theory. What I like about the total money makeover is the proof behind the system.
They have thousands of people that have achieved financial independence following Dave’s advice. It’s hard not to pay attention with all that social proof backing it, which makes this one of the best finance books on my list.
Overall, The Total Money Makeover is an excellent resource for anyone looking to get their financial house in order.
I Will Teach You To Be Rich, by Ramit Sethi
This book is a classic and one of my favorite finance books of all time. It is a financial guide that covers topics such as saving money, investing, and debt management.
The author, Ramit Sethi, provides readers with practical tips and advice on improving their financial situation. The actionable part of the book is what differentiates this book from the rest of the books on this list.
The book is divided into six sections: finding your money, automating your finances, maximizing your earnings potential, living like a rich person, and giving back. Each section contains guidance for readers to improve their financial situation.
This book came at the right time in my life. Even though I had some awareness of how money works, I didn’t know how to automate the process of budgeting and saving.
Here are four pieces of financial advice I got from this book:
- Automate your savings with auto-withdrawal into subaccounts.
- Invest in your retirement.
- Pick one credit card with the most rewards, with zero annual fees.
- Put some money into index funds.
When it comes to improving your financial life, you won’t be disappointed reading this book. It is easy to understand and also different from the other books.
Financial Freedom by Grant Sabatier
Grant Sabatier is the founder of Millennial Money, where he writes about how to achieve financial independence.
In this book, he outlines his own journey to financial freedom and provides tips and advice for others who want to achieve it. There are 13 chapters that provide information to help you find how much money you actually need depending on your financial goals. Without this knowledge, it is impossible to build wealth because you don’t know where your finances are.
These are the money management takeaways I got from this book:
- How to make more money in less time.
- Why time is the most valuable non-renewable resource.
- How real estate makes millionaires.
- How to retire early
This book changed my perspective on the subject of time vs. money. It is a conundrum because when you’re young, you have time but no money. Later in life, you have money but not enough time. After learning how time is the most valuable asset in the world, I improved my business to save time and put that time into creating other businesses.
Money: Master The Game by Tony Robbins
Tony Robbins is a world-renowned life and business strategist. His new book Money: Master the Game shares his secrets to financial success. He has interviewed many billionaires and asked questions about how they handle money.
The book is a summary of those lessons; he also breaks down the steps to reach financial freedom and provides readers with the tools they need to make their money work for them.
My key takeaways from this personal finance bestseller:
- Invest in index funds over mutual funds.
- Create enough income-producing assets to pay for your living expenses.
- You can achieve financial independence sooner if you have a frugal lifestyle.
Money: Master the game is one of the best personal finance books because it gives you actionable advice in different areas. From investing to saving money. Tony’s approach is straightforward and to the point. His style is best suited for people ready to take action.
The 7 Habits of Highly Effective People by Stephen Covey
The 7 Habits of Highly Effective People is a book by Stephen Covey that explores seven habits that can lead to success in both personal and professional life. Although this book is not in the personal finance category per se, applying the book’s principles can help you with you finances.
For example, when it comes to money, you have to create priorities, understand how money works, and also where to seek help with your finances. You can learn those principles inside the book.
In brief, the book outlines seven habits that make someone more effective:
The first habit is to be proactive, which means taking the initiative and being responsible for one’s own life.
The second habit is to begin with the end in mind, which means having a clear vision and goal for what you want to achieve.
The third habit is to put first things first, prioritizing your time and energy on the things most important to you.
The fourth habit is to think win-win, which means looking for solutions that benefit everyone involved.
The fifth habit is to seek first to understand, then to be understood, which means listening more than you speak and trying to see things from others’ perspectives.
The sixth habit is to synergize, which means working together with others to create something greater than the sum of its parts.
The seventh and final habit is to sharpen the saw, which means continuously learning and growing to be the best version of yourself.
The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich by David Bach
The Automatic Millionaire is a book by David Bach that was first published in 2004. The book is based on the idea that anyone can become a millionaire if they make smart financial decisions and put their money into savings and investments. It gives readers tips on how to save money, invest wisely, and pay off debt.
Here are three lessons I learned from this book:
- Pay yourself first.
- Increase your savings progressively.
- Automate the process of transferring your money to retirement accounts.
Transforming your relationship with money is not easy. But David Bach has great storytelling skills where he shares about how other families have managed to save money despite tough conditions. The stories have a way of inspiring you to take action without feeling forced to do it.
The books on this list have helped me achieve financial independence. If you want to have financial goals and achieve them fast, the best way is to start getting your education by reading some of these books.
It is true that the advice is basic, and sometimes it sounds obvious. But when it comes to managing your money, the boring stuff you do matters more than following the new, shiny new object.
It’s also important to have a broad perspective on money. The more books you read on personal finance, the more likely you are to find the right books that speak to your heart. When you do, it’ll feel easy to start investing and saving money. So keep on reading and learning, and sooner than later, you’ll have all the knowledge you need to achieve your financial goals.