In college my dad gave me his copy of The Millionaire Next Door. I devoured the book and a lifelong interest in financial planning, wealth building, and investing was born. Reading the right book at the right time can have a huge impact on your future. Here are some brief thoughts on five personal finance books (one is really an investment book) that have made a big impact. Reading these five impactful personal finance books can give you the foundation for building wealth and having a healthy relationship with money on your financial journey.
I am including Amazon (non affiliate) links for convenience but all of these books can be found from independent booksellers or likely from your local library for free.
The Millionaire Next Door
Thomas J. Stanley and William D. Danko
The Millionaire Next Door was the first personal finance book I read and remains the most impactful for me. The authors surveyed millionaires to discover their key traits such as where they lived, their occupations, and their spending habits. One of the key findings was the big difference between income and wealth. The millionaires they surveyed tended to live well within their means and many of them had modest incomes. So much so that many of their neighbors were unaware that there was a millionaire living next door.
This book was written in 1996 so you will have to do some inflation adjusting in your head. The lessons of living within your means, spending time learning about investing, and finding your niche remain just as relevant today as they were 30 years ago.
The Simple Path To Wealth
JL Collins
JL Collins started a blog with the idea of imparting personal finance advice to his then college age daughter. His writings on personal finance and a simple, straightforward approach to investing went viral and his blog became one of the most read personal finance blogs. Later on he organized the advice from his blog into a bestselling personal finance book. It is a well written guide, especially for those starting out and who would like to be self directed investors.
Simple Wealth Inevitable Wealth
Nick Murray
Are you seeing a theme? This is in some ways an older version of the previous book. Nick Murray wrote Simple Wealth Inevitable Wealth as a book for financial advisors to gift to their clients. It contains a time tested strategy of systematically investing in a diversified portfolio of equities to build wealth slowly and inevitably over time. This was written for clients of mutual fund sales people so mutual funds are the investment of choice presented. However, this book holds up well today with its timeless ‘get rich slowly‘ wisdom.
The Psychology Of Money
Morgan Housel
This is a ‘newer’ book than the other classics on this list. I have followed Morgan Housel for years via podcasts and his online writings and I am finally getting around to reading this book. This one is a bit different than the previous classics as it is less of a ‘how to’ and more of a ‘why’ approach to personal finance and the intense emotions such as greed and fear that can accompany personal finance and investing.
A Random Walk Down Wall Street
Burton G. Malkiel
While this is an investment rather than a personal finance book it is a must read for anyone looking for a well rounded personal finance education. Burton Malkiel wrote this book in 1973 and it has been updated every few years since, most recently in 2023. From a history of the markets, a comprehensive look at different asset classes, and an overview of different investment styles, this book is the definitive guide. This book is a must read for every investor whether you are self directed or work with a financial advisor.
Reading these five books will give you a solid foundation as an investor. If you have questions about these five impactful personal finance books or would like more recommendations feel free to contact me.
