I read a lot of books and over the years I’ve compiled a decent reading list of what I think are the best personal finance books.
When you think about it, books are an amazing tool with a really high return on investment. You can usually get them for free at the library, so they cost nothing to read. And if the book is good enough and worth buying, you can usually buy it used for a few bucks. A good personal finance book should have an ROI much higher than the cost of the book.
There are a ton of books out there and many of them are solid books. When someone asks me for a book recommendation, however, I’m a little more selective. My criteria for a book worth recommending is basically one that’s worth buying and keeping forever. It should either change your life or be good enough that it’s worth referencing over and over.
A few readers have asked me about the books I recommend and after writing a few emails listing these books, I thought the best thing might be to just share them in a single post. What follows is a list of what I consider the best personal finance books that are worth having on your bookshelf. There are still a lot of books I haven’t gotten around to reading yet, so consider this a fluid reading list that is subject to change.
The Simple Path To Wealth
Whenever I need to point someone to just one personal finance book, I almost always point them to The Simple Path To Wealth by JL Collins. This book is legitimately a life-changing book and will change how you think about and approach investing. I sometimes wonder how different my investing life might have been if a book like this existed back when I was in college.
What makes this book so valuable is how it takes what can be a complicated and scary subject like investing and breaks it down into a really simple and easy-to-understand format. Most people who are into personal finance and investing often forget that we take a lot of the information we have for granted. JL Collins understands this and as a result, this book is very much written for regular people to be able to read it and understand it without falling asleep.
The bulk of his book is going to explain why investing is such an important tool for wealth building and break down how investing in a simple index fund like VTSAX is the best way to invest. If that’s all you learn, you’ll already be ahead of the game.
Much of the book is derived from JL Collins famous stock series, so if you really don’t want to drop the money to get this book or spend the time getting it for free at the library, then you could also read his blog and get much of the same information.
My recommendation is to get this book and keep it on your shelf. It’s that good.
I Will Teach You To Be Rich
I first read I Will Teach You To Be Rich by Ramit Sethi back when I was in college, but sadly, since it was the middle of the recession and I had no money or job, I didn’t really apply much of the stuff that I read in it. His book came out in 2009, right at the bottom of the financial crisis. I’ve heard Ramit say that if you applied what he wrote back then, you’d be a millionaire today. In a way, he’s absolutely right, which makes this book a tremendous investment.
The value in this book comes from the systems that Ramit teaches you how to create. Indeed, a lot of the stuff that I do – things like creating a Stupid Mistakes Fund, saving for long-term goals, and creating multiple sub-savings accounts – came directly from what I learned in this book.
I also like how I Will Teach You To Be Rich focuses on the big-ticket items, rather than the small, daily minutiae that really doesn’t have much impact in the long run. This is pretty different advice compared to a lot of other personal finance writers who will typically tell you to deny yourself a lot of little pleasures. Ramit basically says the opposite – spend on what’s important to you, cut the stuff that’s not important to you, and automate so that you can actually afford to buy the things you want.
This book first came out in 2009 and I still have a copy of that book on my shelf. Ramit recently released a 2019 edition of this book, so if you don’t have this book yet, I’d definitely recommend getting the new edition or at least checking it out at the library.
The Automatic Millionaire
As you can probably tell, I’m a sucker for learning how to automate stuff. The Automatic Millionaire by David Bach is the first personal finance book I ever read and as a result, it has a special place in my heart.
The big value in this book, like in a lot of the stuff I read, is in creating automated systems. David Bach doesn’t exactly give you the step-by-step on how to create systems, but he does show you how valuable these systems can be. And he also does a good job of demonstrating how powerful compound interest is over the long term.
There’s some stuff that people will debate about. David Bach is the guy who coined the term, “the latte factor,” which was basically his idea that cutting out small daily purchases like your daily latte could make you a millionaire. I’m not a huge fan of cutting out small things like that, but try to understand what he’s talking about from a bigger perspective – that automating and creating systems will make you wealthy over the long run.
This is a very basic book, written much more for the masses compared to any other book I have on this list. Still, this is the book that got me started with personal finance, so I have a soft spot for it, and I still think it’s worth having on your shelf.
Your Money Or Your Life
Your Money or Your Life by Vicki Robin could be called the original financial independence book. This book is less about money as it is how to think about your life, and if you’re looking for a transformative book, this is a book that you should have on your shelf.
I read this book when I first discovered financial independence and it completely changed how I thought about work, its impact on my life, and what I was trading away for my paycheck.
Your Money or Your Life was recently updated, so you’ll want to get the updated 2018 version of this book since some of the information in the original version of this book is pretty out-of-date now. Go find it at the library, but since it’s on this list, I think it’s worth buying and keeping as a reference on your shelf forever.
The Bogleheads’ Guide To Investing
While I wouldn’t call myself a Boglehead per se, I do believe in the power of index investing, especially using Vanguard index funds. The Bogleheads’ Guide To Investing is a really in-depth book about how to invest correctly. This is not a book for beginners but I do think it’s required reading for most people and it’s good enough that most people should own a copy of this book.
When you read this book, you’ll learn why index investing is the best way to invest and how you should go about doing it. You’ll also learn all of the most important things you need to know about investing – keeping costs low, avoiding shady salespeople, and why things like timing the market doesn’t work.
Taylor Larimore, the author of the Boglehead’s Guide to Investing, also wrote another book called The Bogleheads’ Guide to the Three Fund Portfolio. That book is much more of a pamphlet than an actual full-fledged book, but if you don’t have time to read the entire Boglehead’s Guide to Investing, you can at least get by reading The Bogleheads’ Guide to the Three Fund Portfolio.
The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing
The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing is written by Dr. Jim Dahle, who is the doctor behind White Coat Investor, one of the best personal finance sites out there. Even though this book is geared towards high-income medical professionals, the information outlined in this book will work for anyone, hence why I regularly recommend it to everyone who asks for books about personal finance.
This book is written in the White Coat Investor’s no-nonsense style, which makes it an easy read since it cuts right to the chase and avoids fluff. If you read this book and follow the White Coat Investor’s philosophy, you will do very well with your money.
Note that The White Coat Investor is a self-published book and doesn’t have a mass-market release, so you won’t find this book at the library. You’ll probably need to buy it on Amazon, but it’s well worth the investment.
Quit Like A Millionaire
Quit Like A Millionaire is a new book that I recently read written by Kristy Shen and Bryce Leung from Millennial Revolution. I really enjoyed this book and thought it did a great job breaking down the financial independence roadmap and how it works. Unlike a lot of other personal finance books, this book is definitely written for the non-traditional personal finance crowd that is willing to live a lot different compared to the majority of the population.
Kristy challenges a lot of the assumptions a lot of people have – like why your house is not a good investment. She also talks about advanced financial independence strategies such as making use of geoarbitrage, massively reducing your tax bill with clever tax planning, and how you can strive for other forms of financial independence (like how I talk about Barista FIRE).
This is definitely a book I resonated with a lot and it’s why it has earned a permanent spot on my shelf.
There are a lot of books out there and my hope is that this reading list of what I think are the best personal finance books gives you a good starting point to help you improve your relationship with money. I think all of these books will dramatically improve your life and help you think about money differently. At a minimum, any book I list here is worth getting at the library just to see if it resonates with you.
As I mentioned at the beginning of this post, books change, so consider this a fluid reading list that is subject to change. There are also a lot of books out there that I haven’t gotten around to reading yet, so if I missed anything that is really life-changing or worth buying, I’ll add it to this list once I get around to reading it.
I’ve been silently reading your blog for some time now and just wanted to let you know that your blog was the start of my personal finance journey. Really appreciate your candid posts. This one came with perfect timing as I was hoping to expand my reading list!
Financial Panther says
Thanks Thanh! Glad it could help!
I love your money or your life. this book really awesome for me.
Financial Panther says
Yeah, that book is a life-changing book!
Adding Pennies says
Most of these are my favorites too. I think I would add “Rich Dad, Poor Dad” with “Your Money or Your Life ” because of the way it makes people think differently about life. I am an avid reader too. I try to read 2-4 books a month, mostly personal finance. I have not read all the investment books on your list, so will check them out. As usual, enjoy your site.