I’ve been talking a lot lately about the importance of educating yourself about money before you start investing and saving for retirement.
Money education shouldn’t follow investing so if you have any interest start today. The benefits of even a little money education will pay-off huge in the long run.
I started learning about money after stumbling upon some personal finance blogs via Lifehacker. I decided to try out some books those sites suggested and I became enamored with the topic.
It sounds ridiculous, but those books opened my eyes to a whole new side of money that I never knew existed.
Here are 5 short reviews of those personal finance books that I read when I first started. I would recommend these books to any one and will always hold them close to my heart for everything they did for my wallet.
I would love to do full reviews, but with a lack of libraries in Japan I’m out of luck.
In the meantime enjoy the 5 micro-reviews!
The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich
The one that started it all. I was a naive 21 year-old and attracted to the “Millionaire” in the title, but the book was surprisingly simple and flipped on a hundred light switches in my head.
Author David Bach introduced me to the paying yourself first – taking a certain percentage of your paycheck – maybe 20-35% – and automatically saving that every time. No excuses, if you do this consistently your money will grow over time and you’ll be thankful you never skipped a paycheck.
This book prompted me to start tracking my money and introduced the idea that people knew how much was going in and out of their accounts – I literally had no idea and never once tracked a penny before this book.
Verdict: A great starter to make you excited about money and the future.
The first book about investing I ever read. Written by Vanguard legend, John Bogle, this book is an ode to the index fund – Bogle’s invention.
This book stresses the simplicity of the index fund for the novice investor. It does a terrific job of backing up its claim by emphasizing how many fund managers don’t beat index funds averages – yet, they spend months of time studying graphs and numbers.
If you’re not sold on index funds after reading this book, you have a strong will. It also presents some staggering graphs about the low-cost of index funds related to actively-managed funds. The savings are enough to buy a nice car by the time you retire.
Verdict: Interested in investing, but don’t want to make it your life? This is your book.
If you’re a regular to my site you know I’m a huge fan of Ramit Sethi (check out part 1 and part 2 of my interview with Ramit).
This is single-handedly the best personal finance starter for anyone 16-35. The book is 266 pages, but it reads so fast that you’ll finish it in a weekend. His writing is infectious and it’s like reading a friend tell you to stop being an idiot with your money.
Credit cards, banking, investing, savings, retirement. It’s all covered in great depth with eye-popping example and diagrams.
Ramit’s also a marketing guru and has entire CHAPTERS posted on his site for free. Check them out for a taste – it’ll immediately make you want to read more.
Verdict: My favorite personal finance book ever. Hands down.
This book took millionaires off an untouchable pedastal for me.It turns out that The Millionaire Next Door acts just like the average Joe who’s making $50,000 and supporting his family of 4.
The millionaire next door doesn’t drive a Bentley, wear a $15,000 suit, or have 7 houses. He or she spends on things they love (vacations or dinners) and saves on the things they don’t (cars or watches).
There’s a good amount of research done in this book about millionaires. The author attempted to pinpoint the specifics of millionaires spending and the results are really helpful for the average consumer who is just trying to get by.
Overall, the book provided me a lot of confidence and made me create the goal of becoming a millionaire in my life – a real goal, not just a pipe dream.
Verdict: May not immediately help your bottom line, but a great read for perspective and relating your money situation to others.
The Bogleheads’ Guide to Investing
This book supplements the Little Book of Common Investing. It highlights Bogle’s career and the invention of the index fund in more depth than the book above (336 pages vs. 216).
The book then gets into investing specifics based on the ideas of the Bogleheads (John Bogle’s followers). It reads like an entertaining textbook for novice investors.
The book is more in depth than other generic investing overviews, so I wouldn’t suggest starting with this book. After you’ve created a thin base of money knowledge, pick up this book, and it’ll take you to the next level.
Verdict: Not for money beginners, but an appropriate follow-up to a Money 101 book.
::::
There you have it. The 5 books that formed my money base and propelled me to change how I view and handle money for life. This site wouldn’t be around without these books and I would suggest them to anyone who is even moderately interested in money.
The links above are affiliate links, but I stand by these books as quality projects that will change your life.
Get to your library, order it on Amazon, or buy the Kindle electronic version but pick up one of these books today!
I promise you’ll never regret it.
Hey, readers! What were your first money books and which do you suggest to money beginners? Leave a comment below with your suggestions, thanks!
Photo: Stewart
————————————————————–
Subscribe 
Follow us on Twitter 
Get email updates
I love The Millionaire Next Door & The Automatic Millionaire. TMND is great insight on the actions of true millionaires, while TAM really teaches you to automate your finances and eliminate wasteful spending.
.-= Jason @ MyMoneyMinute´s last blog ..Wine On A Budget: Oak Creek =-.
[Reply]
Austin Reply:
March 5th, 2010 at 9:50 am
Yeah, they definitely work well together but in different ways. I love the raw data in TMND like what % have ever spent more than $5,000 on a suit. That stuff fascinates me.
Have you read any good pf books lately? I’m stranded in Japan without any English books!
Thanks for the comment, Jason.
[Reply]
I write about personal finance myself, yet have never cracked open a PF book! These reviews are really helpful. I will be checking one of these out very soon.
P.S. I’m curious to know how you teaching is going in Japan. Do you speak Japanese as well?
.-= Little House´s last blog ..Yakezie Group Round-Up =-.
[Reply]
Austin Reply:
March 6th, 2010 at 9:14 am
If you like pf, grab any of the 5. You’ll love them all. Promise ;)
[Reply]
Wow, your choices in books are uncanny: The first 4 books I bought about personal finance are the first 4 books you mentioned. (I didn’t buy Boglehead as the ‘Little book’ gave me the gist :)
Personally I found the Millionnaire Next door a bit of a dull read and whilst Ramit’s book was very entertaining, it was less applicable to non-Americans. But the Little book and Automatic Millionnaire are great, quick reads that could quite literally have a financial impact of 10s or even 100s of thousands of what ever currency you invest, if you take the messages to heart.
Great post.
.-= Adam´s last blog ..Consumption Smoothing =-.
[Reply]
Austin Reply:
March 8th, 2010 at 8:33 pm
Thanks, Adam. Any suggestions for good UK personal finance books?
[Reply]
Adam Reply:
March 16th, 2010 at 7:05 am
Great question Austin. Maybe I’m a bit picky but I’ve not loved any UK based book -perhaps I’ve been spoilt by all the great content I can find online and in US books.
Perhaps it’s because there’s less of a market for them in the UK. Every personal finance section in UK bookstores is always right at the back of the store, hidden away somewhere! And my local library doesn’t even have a personal finance section -can you believe that? I think personal finance as a topic is much more of an American thing -it’s one of the reasons I was inspired to start my blog: there really is a whole in the market.
If I had to pick one author though, I’d say Alvin Hall -he may be American but he writtes well for a British audience.
Ramit’s book has come out in the UK too -complete with UK-specific references, although I’d prefer to write my own book some day ;)
.-= Adam´s last blog ..Pay off debt or save? =-.
[Reply]
Austin Reply:
March 16th, 2010 at 10:16 am
Wow, that’s really surprising that there isn’t a market for pf in the UK. I think the pf market is pretty niche in the U.S., but since we’re a little bigger than the UK, it really shows on the internet.
I’ll have to check out some Alvin Hall soon. Is Show Me the Money a good one? What do you suggest?
[Reply]
I think I’ve read books from all of the authors above, except Ramit Sethi. Ramit’s book might be a good one, but I think I’m doing pretty good on my own! :)
The Millionaire Next Door and my parents are what had a direct impact on my frugality. It was good to pierce the bubble of the rich myth! (Hmm, I might blog about that topic…)
With the Millionaire Next Door, it’s not a novel with gets your adrenaline pumping, it’s more of a thinking “man/woman”‘s read and to get the most out of it, you have to think between the lines. It’s also the real deal, based on tons of research! I still refer back to in today even (although be forwarned the numbers are out of date for financial information).
Based on your comments about Ramit’s book, I read it now too.
Thanks!
[Reply]
Austin Reply:
March 8th, 2010 at 8:35 pm
I’d love to read a post about the myth of the rich, get on it!
[Reply]
You know, Automatic Millionaire was it for me too. Love that thing. The concepts still stick with me. Great list. A couple of these I still need to check out.
.-= PT´s last blog ..Question of the Week: Who Does Your Car Service? =-.
[Reply]
Austin Reply:
March 8th, 2010 at 8:37 pm
I’d love to re-read it. I’ll probably buy it when I get back home as a treasure.
[Reply]
I’ve only read millionaire next door and the automatic millionaire, both good reads. I think these books do a great job of laying the foundation, but folks should continue to read books such as rich dad poor dad to understand more advanced topics including running a business and ways to actively build wealth rather than save and wait til your too old to use the money. Just my two cents.
.-= Ryan @ Planting Dollars´s last blog ..Waikiki Site – Adding WordPress and Thesis Theme via FTP to Bluehost =-.
[Reply]
Austin Reply:
March 8th, 2010 at 8:34 pm
Definitely. This list is just a starter. Hopefully it’ll get some people to branch out and read different topics and views on money so they better understand the options.
[Reply]
Hmm out of that list I’ve only read the Automatic Millionaire and I really liked it. I heard Millionaire Next Door is good too.
Thanks for sharing, I’ll be sure to keep an eye out for those titles. =)
.-= youngandthrifty´s last blog ..Questrade TFSA Check Up =-.
[Reply]
Austin Reply:
March 8th, 2010 at 8:36 pm
Hit up the local library. You’ll finish any of these books within 5 days.
[Reply]
I swallowed up PF books at first but then I found that they often repeat themselves, and some of it I just didn’t agree with it. I really want to check out Boggle head.
I love economics based books like Freakanomics. Have you checked that out yet?
.-= Evan´s last blog ..Evan By The Numbers March 2010 =-.
[Reply]
Austin Reply:
March 9th, 2010 at 2:11 pm
Yeah, I actually started listening to the Freakonomics podcast. It’s really well done, even though they only have 2 so far, I’d definitely check it out.
[Reply]
Hey Austin,
“Rich Dad Poor Dad” by Robert T. Kyiosaki was one of my favorites. It taught me the difference between an asset and a liability.
Thanks for sharing,
Guy
.-= Guy G.´s last blog ..Grocery Saving Tips – Tips on Budgeting =-.
[Reply]