The Best Personal Finance Books For Beginners
Before even thinking about improving your financial situation, you must first have financial literacy to make it better. You can take a course, get a mentor, learn it the hard way, or you can just buy a book and learn from the years of experience from that writer.
Personal finance books teach you how to break free from the nine to five rat race or living from paycheck to paycheck.
While there are a plethora of books out there in the world talking about how to leverage, earn, or save more, it can be confusing as to which one of these pieces of advice can actually help you. Because of this, we’ve narrowed it down to a list of five books that even the absolute beginner can implement to better their financial situation.
1. Rich Dad Poor Dad – Robert Kiyosaki
Kiyosaki’s Rich Dad Poor Dad highlights the financial lessons he has learned in life. (Image source: MPH Online)
Of course, we cannot miss this all-time favourite book!
This book pivots on Kiyosaki’s point of view when he was a 9-year-old kid. There’s the rich dad (his best friend’s father) and was compared to the poor dad (his biological father). Kiyosaki contrasted how both dads had a different point of view about money and the opportunities that came with it.
It is written in such a simple language that even young children can easily grasp the concepts of it.
In the second half of the book, however, are some of the lessons that Kiyosaki learned as an adult and how to implement them.
The verdict on this book is that it is a huge food for thought and about how society rewards being bold enough to take action.
“It’s not how much money you make, it’s how much money you keep.” – Kiyosaki
2. The Total Money Makeover – Dave Ramsey
The host of the Dave Ramsey show offers his thoughts on debt management. (Image source: Amazon)
Most famously recognised for his financial advice radio show, Dave Ramsey offers his thoughts on how debt management plays a fundamental role in personal finances. This bestselling book teaches you how to steadily get out of debt and improve your overall financials.
The Total Money Makeover highlights seven ‘baby steps’ that everybody can implement to get back on the right track, starting an emergency fund, and saving for retirement. It really makes you think about where your money is going and how you can prevent those unnecessary leakages.
Not just this, if you’re doing all that you can but your finances just aren’t improving the way you want them to, you should definitely get this book!
3. The Psychology of Money – Morgan Housel
Morgan Housel dives into the role of the psychology of money in our lives. (Image source: Amazon)
It is undeniable that money is a tremendously huge part of our lives and what drives our actions. It’s partially why you clicked on this article as well.
Morgan Housel took this concept and delved deep into it. He took a different approach, instead of giving readers some kind of formula to follow, Housel gives us the nitty-gritty about how ego, preconceived notions, and our pride can stand in our way to financial freedom.
The premise is that doing well financially has little to do with how smart the person is and more with how a person behaves and thinks. “A genius who loses control of their emotions only needs one bad day to turn everything into a disaster,” emphasised Housel.
4. Your Money or Your Life – Joe Dominguez and Vicki Robin
Vicki Robin and Joe Dominguez partners up to talk about our relationship with money. (Image source: Kobo)
This book will hit you at your core as Dominguez and Robin anchored the premise on the typical working-class life – working long hours, being stressed, not having enough sleep and not spending enough time with family just to support a life of material possessions.
This book teaches readers how to retire early. And by retiring early, it means to reach that crossover point where one has enough income from their investments to support themselves and quit the job they hate.
It is much less about how to make money and generate more income streams. But rather, Dominiguez and Robin want us to reframe our relationship with money and align our lifestyle with what is truly important to us.
5. I Love Stocks: Your Guide to Profitable Trading – Pauline Yong
Pauline Yong teaches how to trade stocks profitably. (Image source: Alpha Academy)
It is undeniable that the stock market is one of the best places to generate wealth, whether it’s a passive or an active income. Malaysian investor Pauline Yong wanted to help the public to tap into the world of equity investing and came up with this book for people starting from 0.
Before even talking about the strategies, the indicators, and the ways to analyse a stock, one must first understand what this world is about and the jargons around it. Yong broke it down to the simplest language that even kids could understand.
After reading all of these books, it became even clear that it’s never really about what strategy works best to build wealth or finding the holy grail. Rather, it is about building the fundamentals.
We can only change our situation once we have the tools to do so. So stop asking what’s the best stock to invest in or the returns of the government bonds. The answer will come to you after you invest in the most important factor of all – yourself.
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