Best personal finance books

The following personal finance books can truly help you improve your relationship with money. They have changed the lives of so many people by providing knowledge, encouragement, and guidance. You will not be the exception! If you read them, let me know what you learned.

Rich Dad Poor Dad

Using the story of two father, the author, Robert T. Kiyosaki, describe the way of thinking of two dads, “Rich dad and poor dad.” These two dads have different ways of thinking about money. The poor dad reflects most people’s financial behavior: the poor and the middle class. On the other hand, the rich dad reflects the financial behavior of the wealthy, the one percent of Americans. 

The poor dad’s way of thinking and managing his money shows a lack of financial literacy. He gets into student loans to get a degree and a job. consequently, he buys a house and gets into credit card debt to afford his expenses. After all, he manages his money the traditional way, a combination of debts and liabilities. This thinking will keep him and his family in the middle class forever. 

On the other hand, the rich dad’s way of managing his money is entirely different. He focuses on acquiring assets like stock, real estate, and businesses. These assets will then provide income in dividends, rental income, interest, and profit from the business. All these income streams will then pay for his expenses and create wealth. 

This is a best-seller book that has sold nearly 40 million copies worldwide. Kiyosaki brakes down and explains everything that the majority of people are doing wrong. The author utilizes illustrations and storytelling to effectively convey the book’s main principles. When you finish reading it, your thinking about money will transform completely. 

Key concepts 

• Financial Intelligence
• Courage
• Action taking
• Work to learn new skills instead of money
• Overcome obstacles
• Overcome arrogance
• Handling fear
• Avoiding bad money habits
• Overcoming laziness
• Overcome bad habits
• Choose the right people to associate with
• Develop self-discipline. Pay yourself first
• How to invest and use your assets
• Find people who inspire you and inspire and teach others.

In this book, Dave Ramsey educates his readers about the basics of financial literacy. This is an excellent book for beginners. 

The book explains the fundamentals of personal finance; earn an income, live on less than you make, stay out of debt, invest, and build wealth. Dave encourages you to analyze your financial situation and accept that you must change your money habits. He says that once you feel you have had enough and are sick and tired of debt and financial disaster, you will do whatever it takes to get out of that situation. 

Dave has seven baby steps to help you save for emergencies, pay off all your debt, and build wealth. 

These are the 7 baby steps

• BABY STEP 1: Save $1,000 for your starter emergency fund.
• BABY STEP 2: Pay off all debt (except the house) using the debt snowball.
• BABY STEP 3: Save 3–6 months of expenses in a fully funded emergency fund.
• BABY STEP 4: Invest 15% of your household income in retirement.
• BABY STEP 5: Save for your children’s college fund.
• BABY STEP 6: Pay off your home early.
• BABY STEP 7: Build wealth and give.

Source

This is a personal development and self-improvement book written by Napoleon Hill and Rosa Lee Beeland, released in 1937. This powerful book examines the psychological power of our thoughts and their effect on our monetary and personal success. 

Think and Grow Rich is based on the study of many individuals who had accumulated personal fortunes. Based on their habits, Hill created thirteen principles to achieve success. 

13 Principles

1. Desire: To succeed at anything, you must WANT it badly enough that you are willing to overcome obstacles in your path.
2. Faith: You must TRULY believe you can achieve your goals.
3. Auto Suggestion: You should use daily POSITIVE AFFIRMATIONS to reinforce your Faith.
4. Specialized Knowledge: Successful people are constantly learning. They read daily, take courses, and listen to podcasts.
5. Imagination: You must VISUALIZE SUCCESS. To get through tough times, you must be able to see yourself at your goal and feel your emotions in that prosperous state.
6. Organized Planning: You have to create a plan, create a system and then act on it. Hill’s famous quote about this principle is, “A goal is a Dream with a Deadline.”
7. Decision: Stop procrastinating and take action without the fear of failure. 
8. Persistence: You will face failure and obstacles but must not give up. Show up every day and take action.
9. The Power of the Mastermind: Successful people surround themselves with other successful people. They need to share knowledge with their peers. 
10. Your partner: You must have a partner who believes in you, supports your goals, and knows what it takes to succeed.
11. The Subconscious Mind: Master positivity denounces negativity. Don’t get caught up on negative news and social media. Also, stay away from toxic people. 
12. The Power of the Brain: Surround yourself with people you can learn from and be inspired by.
13. The Sixth Sense: You have to learn to trust your gut. Do not engage in anything that does not align with your core values and purpose. You should walk away. 

This book teaches you what to do with your money to reach financial freedom without becoming a financial expert or seeking a financial advisor. It explains how you can keep your investing simple and outperform most professionals.

You will learn to get your finance in order and reach financial freedom. Using simple terms, Collins explains the essential wisdom you need to make your money work for you, not against you. 

If you are new at investing and want to put your money to work but don’t know where to start and what to do, read this book. It will show you a straightforward approach to money management and wealth building. 

Key Takeaways

• Understand and change your mindset about money
• Stay away from complex investments
• The truths about the stock market
• The three questions you should ask yourself before you start investing.
• The three investments type to build your portfolio.
• Debt is not normal
• Why do most people lose money in the stock market?
• The two stages of investing
• The relationship between bonds and inflation
• Flexibility enables you to take more significant “risks.”
• Why Roth IRAs are awesome

My favorite quote from this book. 

“Since money is the single most powerful tool we have for navigating this complex world we’ve created, understanding it is critical. If you choose to master it, money becomes a wonderful servant. If you don’t, it will surely master you.”

This is another excellent book for beginners about personal finance. The main idea of this book is that you don’t need to be a financial expert to become rich. Sethi presents you with a 6-week program to help you start your financial freedom journey. At the end of the six weeks, you can manage your money better and be on the road to a more fulfilling life.

Concepts you will learn in this book 

• The role of credit and how to use it wisely.
• How banks work and how to optimize it. 
• Type of investment accounts. 
• How to invest. 
• Types of asset classes. 
• How to automate your finance.
• How to be smart with your spending.

Reading has many benefits; it is an exercise for the mind. It can help you acquire more knowledge, calm your mind, and relax. I encourage you to read as much as possible. Pick topics that are important to you and that you want to improve. Personal finance is a good starting point because money affects every area of our life. If you wish to keep on learning about personal finance, I created an investing guide for beginners that is free to download. Click here