Getting into financial literature can be rough, especially if you have no prior experience in finance. The jargon can make little to no sense – after all, why should you care about an index fund? But there is so much more to finance than indexes, the Dow Jones, or fancy financial journals.
5 Finance Books to Help Cut Through the Noise in Finance
There are plenty of books for people who want to understand how to better manage their money and time. These books can help you make the most out of what you have, better improve your budgets, and even start to save for the future – and all without needing a college degree in economics.
Here at Morningstar, we believe in empowering investor success. This not only means being able to use your money in a way that works for you, but it also means giving you accessible, relevant, knowledge to understand what works for you and why.
To help you get started on your financial journey, I decided to list some of the books that have helped me:
- The Millionaire Next Door: The Surprising Secrets of America's Wealthy by Thomas J. Stanley and William D. Danko
- If You Can: How Millennials Can Get Rich Slowly by William J. Bernstein
- Rich Dad, Poor Dad by Robert T. Kiyosaki
- The Psychology of Money by Morgan Housel
- One Up on Wall Street by Peter Lynch and John Rothchild
A Book That Examines the Millionaire Mindset
The Millionaire Next Door: The Surprising Secrets of America's Wealthy by Thomas J. Stanley and William D. Danko asks and answers the question of what ‘being wealthy’ means.
Fancy cars, nice watches, beautiful beach homes, all seem to be the trappings of a luxuriously wealthy entrepreneur – or are they? This 1996 book is a great way to readjust your perspective of what it means to be and look “wealthy”.
Before going neck deep into finding out which investments and portfolios are right for you, a deeper look into your habits and mindsets that you have surrounding wealth and what makes wealth is an even better place to start.
Stanley and Danko focus on the millionaires who don’t look and act rich in the sense that is commonly shown in media. Instead, they focus on millionaires who drive clunkers, eat fast food, and take short surveys if it means an extra $5.
A Free How to Get Rich Book
If You Can: How Millennials Can Get Rich Slowly by William J. Bernstein is a short and easy read published in 2014 and can be found for free online. The book offers millennials (or anyone) how to go about getting rich, slowly.
Getting rich quick just isn’t realistic, but just like previous generations millennials will eventually want to buy homes, build their retirements, and settle down.
With the market changes throughout the past few years, these ideas often feel out of reach for the current generation, who doubt their ability to ever buy a house due to rising student debt and tighter lending standards.
A Classic Personal Finance Book
Rich Dad, Poor Dad by Robert T. Kiyosaki helps you face your relationship with money. Money shows up everywhere, you work for it, you live for it, and you want a new perspective that breaks you out of being a cog in the machine. Kiyosaki's 1997 book tries to do just that.
In this book, Kiyosaki analyzes two father figures from his childhood, one being his own father, who despite being highly educated and having a sizable income, struggled financially. The other figure was his best friend’s father who never finished high school yet became one of the richest men in Hawaii.
A Book on The Psychology of Money
The Psychology of Money by Morgan Housel is a great insight into behavioural finance. What you need to do with your money, versus what you are actually doing with your money can be a cavernous gap. This books helps you see the gap.
It can be really easy to pull together a budget, understand that living below your means is best, and saving is good for you in the long run, but the motivation to follow through on what we know is good for us can be quite difficult.
In Housel’s 2020 book, he details the real reasons why we do what we do with our money and considers how your background can take its toll on your wallet.
A Classic Investment Book
One Up on Wall Street by Peter Lynch and John Rothchild addresses one of the most repeated pieces of investment advice – Buy and hold. In Lynch and Rothchild’s 1989 book, they dig deep into the stock market and show that not only do you already have some know-how about investing, but that some of it is good.
The book goes over common-sense approaches to getting a head into the market and takes you into the world of Wall Street, a scary place for new investees. Once you finish reading the previous four books on this list, tackle this one. It will help you get a grasp on what stocks are, and how you can use the stock market to your advantage to make more money. While learning how to use what you already have is great, knowing how to make more without working harder is even better.
You Can Learn So Much with These Finance Books
Finance is a very broad world, and it affects everyone, but that doesn’t mean you have to navigate through that world blindly without any tools. There are many books out there that can be very useful in making that world easier to grasp, and starting with the five books mentioned here can be a great way to create a new perspective around finance and begin looking at what you can do with your own money and skills with a new mindset.
