Use these books to build a strong financial foundation

I have compiled a list of my favorite and best books about money to help those that are interested in learning from some of the experts. The image shows these books as a pyramid, starting with the foundation and working yourself up to the book at the top.

The Foundation:

The Millionaire Next Door: The Surprising Secrets of America’s Wealthy

Book by Thomas J. Stanley

What comes to mind when you think of a millionaire? If you are like most Americans, you probably think of someone in an expensive suit, siting on expensive sports carts, in front of expensive mansion with tall, white, Corinthian columns. Well, if you read Thomas Stanley’s The Millionaire Next Door, you might be surprised to find out that more often than not, the average millionaire is actually like your more humble and pleasant, “blue-collar” or “middle class” neighbor. After reading this book, you might find that your neighbor is actually much richer than what you had originally thought. In fact, more often than not, your stereotypical image of a millionaire is actually someone who is much poorer and debt ridden than you might have thought. Why is this? Well, reading this essential classic of personal finance will teach you that that the key to becoming a millionaire is rooted in a healthy perception of wealth and income, good habits, and a wise investing plan.

Key takeaways: living below your means, save on the big ticket items, majority of millionaires are business owners. 

 

Wisdom from Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money-That the Poor and the Middle Class Do Not!

Book by Robert Kiyosaki 

Ever feel like you are not just getting enough out of your hard work in both a financial and spiritually fulfilling way? Well, Robert Kiyosaki’s Rich Dad, Poor Dad, another foundational book on personal finance, will teach how to get more out of your income and work life. If you dread waking up every day to a job that you just don’t really care that all much about, this book will teach you the essentials of personal finance when it comes to using your income more efficiently and finding new, more fulfilling ways to make that income.

Kiyosaki wrote this book in a the style of easily digestible parables that each tell the story of his poor dad and his friend’s rich dad. In these parables, you will find that even though each dad both started out in a similar position working just as hard, the rich dad, through his entrepreneurship and savvy investing, was able to become much richer and work much less over time, while the poor dad spent his entire life working hard without seeing nearly as much wealth.  Through improving your financial IQ with strategies like investing in real estate and other assets, as well as starting your own businesses, you can get more money out of your hard work. Not only that, you can start making your money work for you, and end up more like the rich dad and less like the poor dad.

Key takeaways: the quicker you can turn you earned income into passive income the better off you can be. Using assets to pay for your expenses will allow you to ext the “rat race.” 

 

The Total Money Makeover: A Proven Plan for Financial Fitness

Book by Dave Ramsey

In Ramsey’s Total Money Makeover, you will learn of the essentials to climbing out of debt through budgeting with his “The seven baby steps”:

  1. Save a $1,000 beginner emergency fund
  2. Get out of debt using the debt snowball
  3. Building a fully funded emergency fund
  4. Invest 15% of household income for retirement
  5. Save for children’s college
  6. Pay off your home early
  7. Build wealth and be generous

Each chapter will go into depth on each of these steps on how to go through them for each individual situation that you may have. There is a good reason that the Dave Ramsey brand is so successfully and even taught in schools across the world. Read this book to find out why and find how to achieve financial peace.

 

Intermediate Phase:

The Intelligent Investor: The Definitive Book on Value Investing

Book by Benjamin Graham

Benjamin Graham is widely known as the father of value investing and the mentor to billionaire investor Warren Buffett. Often called the greatest investment advisor of the 20th century, Benjamin Graham, is undoubtedly respected and known across the financial world. Reading this book is an effective way to take anyone’s basic understanding of investing to the next level. Despite being publish in 1949, this classic investing book contains timeless wisdom and advice for understanding and interpreting market conditions. Even so, various financial experts, like Warren Buffet, have repeatedly made contributions and revisions throughout the years to keep it as relevant as ever. All and all, Benjamin Graham’s The Intelligent Investor is truly the definitive book on value investing.

 

MONEY Master the Game: 7 Simple Steps to Financial Freedom

Book by Tony Robbins

Combining the methods of the old and of the new, Robbins’s Money Master the Game really is book that tries to take a holistic approach to personal finance.  Tony does not try to hold himself out as an expert on money, instead, he conducts hours of interviews with some of the best minds in finance and investing. They share the principals they believe in to help you become financially free.  Along with direct financial advice, this book also gives advising for improving the reader’s life in many aspects like diet, health, confidence, leadership, and personal relationships, which will ultimately lead to overall better financial health and vice versa. In the process of going to depth with these steps, Robbins debunks many financial myths and provides many strategies for a variety of situations in order to achieve the titular “Financial Freedom”.

 

The Top:

The Psychology of Money: Timeless lessons on wealth, greed, and happiness

Book by Morgan Housel

The most recent book on this list, just published last September, Housel’s The Psychology of Money differs from most of other the books on this list. To illustrate, this book focuses on how and why we make money decisions, providing a view of money revolving around people, the world, marketing methods, history, etc. We often think of money management and finance as complicated series of mathematics and algorithms. While this undoubtedly true, we cannot forget that ultimately on an individual, psychological level, money decisions are made by and for the individuals. If you want to get a better understanding of what influences your or someone else’s decision to buy the brand name item over the store brand at the grocery store—or what influences someone to make life-changing financial decisions like going to college or applying for a mortgage, I highly recommend Housel’s The Psychology of Money.

 

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