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.
more ....