There are many books I have read on the subject of finance. Here are a few of my favorites (in no particular order):
1. Life or Debt : A One-Week Plan for a Lifetime of Financial Freedom (Paperback)
2. The Millionaire Next Door (Paperback) by Thomas J. Stanley, William D. Danko
3. More Wealth Without Risk (Paperback) by Charles J. Givens (kinda outdated but really helped me when I first got out of college)
4. The Truth About Money 3rd Edition (Paperback) by Ric Edelman
5. The New Rules of Money: 88 Simple Strategies for Financial Success Today (Paperback) by Ric Edelman
This is what I recommend, in priority order:
1. The Richest Man in Babylon.
My overall strategy is to inspire people to learn about personal finance, then provide books that will permit them to learn the ins and outs. In that way, they will learn to forage for themsleves.
Anyway, why is this book #1 on the list? Several reasons.
Americans today are generally not interested in saving or personal finance. Just today there was an article on MSN.com that said the saving rate in the US has fallen to ZERO percent.
As such, recommending a long, technical book is not the way to get your average Joe or Jane six-pack to change his or her ways. Whatever that book may be, however excellent the information contained therein, will be left gathering dust.
The answer is the Richest Man in Babylon. Why?
- It's very short. The reader is not likely to get frustrated by having to wade through a thousand pages.
- It's not boring (it's written as a series of parables). Talking about betas and volatility will cause most people to start snoring.
- It does not attempt to cover the vast universe of personal finance. There are too many moving parts to cover in one book. Instead, it instills a handful of core principles (the five rules of gold) in the reader. These rules inspire the reader to change his or her ways and learn more.
- The book itself is cheap When you preach frugality, it's hard to justify it by recommending a $50 hardback book.
Combine the above and you can get Joe Sixpack interested. Once he's interested, he'll drive himself over to the bookstore to learn more. This book plants the seed of desire to learn more. Which is what leads to the other books.
2. The Millionaire Next Door.
Already mentioned above. Why is this next on the list? If there is one flaw with The Richest Man in Babylon, I think it could be a bit more forceful with the message that "you too can be a millionaire".
I think some people who read The Richest Man in Babylon come away with the message that "I can set my financial house in order but I'll never be really rich". While the book's author certainly tries to dispel that myth I think the message can be made to hit harder!
This book demonstrates to Joe Sixpack that the average US millionaire is a lot like him. Again, it's not heavy on investment strategies and the like but it inspires the reader to forge ahead in the realm of personal finance. They see, by cutting costs and living frugally, they can become a millionaire.
The book also excels in that it has a lot of info on what NOT to do, in order to build wealth. You see examples of UAWs and their detrimental behavior. You see how providing too much economic aid to your children hurts their ability to become PAWs.
Again, this book is in the "inspiration" category. You won't find tips on which mutual funds to choose. But you will come away with direction and inspiration.
3. The Wealthy Barber.
This book starts to get into the realm of "learning" as opposed to "inspiring". Now we are starting to see specific advice on what to do about retirement, wills, life insurance and the like.
The book is written as a story. It is not a dry finance text. It's about three family members who visit their barber every month and get financial advice from him. He's a guy who has become wealthy (basically by implementing the five rules of gold). Each month he covers a new topic.
You don't want people to get bored and stop learning. This is a perfect "intro" book to "learning" (as opposed to "inspiring") because it's written as a story. It's also not very long. If you hit them with a heavy technical book like "A Random Walk Down Wall Street" at this point, they're likely to get frustrated and walk away, despite being inspired by the previous two books.
The book covers a lot of ground. But there's no way it can be comprehensive. That's why we go next to ...
4. Personal Finance For Dummies.
Eric Tyson's excellent book is more comprehensive than The Wealthy Barber, but is not written as a story. That said, it is not dry like A Random Walk Down Wall Street so it is easy to get people to read.
It's much longer than the Wealthy Barber. However, it contains a lot of good specifics that the latter book lacks. Tyson makes specific recommendations for mutual funds, brokerages and the like.
Those are my top 4.
I have not finished Ric Edelman's The New Rules of Money yet but I can envision it being my #5. Why? It dispels a lot of myths in the investing world. Once a person gets inspired and has a good base of knowledge, he or she needs to learn where the pitfalls are. Ric does a good job of that (e.g. don't invest in the Dogs of the Dow).
Two of my top picks:
"Winning the Loser's Game," by Charles Ellis
"Investing with the Best," by Claude Rosenberg
Both available at Barnes & Noble
A Random Walk Down Wall Street by Malkiel.
A light yet informative read on dry subject.
+1000000 on the Millionaire Next Door.
Multiple Streams of Income by Robert G. Allen is a good read.
If you are involved with your own business read:
The E Myth
What do you think about the Rich Dad Poor Dad series?
Boardroom classics has three I like:
"Complete book of money secrets"
"The book of inside information"
"More secrets, more inside information"
More of personal finance overall, not just investing
link I found to some of their books link
Book are old but some of the information is still useful
For an oldie, but a goodie, I recommend The Art of Speculation, by Philip L. Carret.
It shows how things were done in the good old days.
The more things change, the more they stay the same.