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Looking for financial literacy books like Rich Dad, Poor Dad? These seven must-reads hold the secrets you need to build true wealth.
When I interview successful people, I often ask: What is the best investment you can make? And, the answer might surprise you. It’s never a hot stock tip or a new crypto alt coin.
In fact, advice I often get from successful millionaires is to invest in is…
BOOKS.
With an Audible library packed with hundreds of financial literacy books, I couldn’t agree more. I’ve read everything from books like Rich Dad, Poor Dad to The Millionaire Next Door, and You Are a Bad-Ass at Making Money.
My verdict? A lot of these books offer incredible advice. But only a few financial literacy books have actually changed my life and the way I think about wealth and manage money.
When I look back on my journey to achieving financial independence, this list of time tested financial literacy books below are the ones I come back to again and again for brilliant insights and actionable advice.
1. Think and Grow Rich by Napoleon Hill
Financial literacy book for: mindset
Level: Total newb
The first step to a dream coming true is believing it is possible in the first place. This book can help you break through to the idea that getting rich is possible, within reach, and a worthwhile priority.
That is probably why most wealthy l people I’ve met mention starting their journey with this book. But don’t expect many actionable steps beyond that. Napoleon Hill’s writing style is absolutely hypnotic, but Think and Grow Rich lacks the practical tips and advice you need to actually make your dream a reality.
While it makes every list of “best financial literacy books” on the internet, no one ever talks about how incredibly weird it is. See if you will, “Chapter 11: The Mystery of Sex Transmutation.” Racy stuff for the 1937 publication date.
You may be equally better off reading my personal favorite As a Man Thinketh or The Power of Positive Thinking, a recommendation from both Tim Ferriss and Mr. Money Mustache himself.
2. I Will Teach You to Be Rich by Ramit Sethi
Financial literacy book for: career and negotiation
Level: Beginner
I Will Teach You to Be Rich was my gateway drug to financial literacy books. Here are just a few of the life changing lessons and habits I learned from Sethi:
How to automate your finances
I would be completely lost without the automatic monthly payment to my credit card and digital tools like Mint.com or Personal Capital that allow me to track my finances in one place.
It was overwhelming to set up the systems Sethi recommends at first. But it only took a few hours and has paid off for years to come. If you are ready to take financial control of your budget and income, make sure to check out Personal Capital for yourself.
How to negotiate
Thanks to Sethi’s perspective, I now welcome the opportunity to stand up for myself when dealing with banks trying to bully me with fees. I shut down any trace of association I could with Wells Fargo and Bank of America. I never hesitate to call to negotiate a higher credit limit to improve my credit score, or demand that a late fee be removed.
How to get a great job and negotiate a salary
Ramit’s sometimes snarky sense of humor may be a turn off to some, but I found it to be an empowering attitude when learning how to build confidence and convey my value.
To this day when friends approach me with career questions, I often direct them to Ramit’s videos on resumes and negotiation which have helped me land high six figure job offers.
Why home ownership is a poor investment
Ramit applies mathematical rigor to the American dream and myths of wealth in home ownership. TL;DR: buying a house isn’t the solid investment mainstream culture or even your parents might lead you to believe.
Where Ramit’s mindset and advice didn’t work for me, is his reluctance towards frugality.
“Cut ruthlessly on what you don’t value, spend lavishly on what you do value,”
This may be excellent advice if you are looking for life as a ladder climbing careerist. But if you are more interested in accelerating wealth through entrepreneurship, real estate, side hustles, or frugality, you’ll want to keep reading, because there is so much more to learn.
3. The Simple Path to Wealth by J.L. Collins
Financial literacy book for: how (and why) to invest
Level: beginner or intermediate
Many consider J.L. Collins to be the Godfather of modern financial literacy, and for good reason.
In this book of advice originally written for his daughter, Collins will teach you why you need to stay the hell away from toxic debt and confusing, complicated investments, while illustrating how, when used correctly as a tool, money can buy you the freedom you desire, which he lovingly coins as “F– You Money”.
Collins outlines the easy investing strategy that made him, and many FIRE bloggers after him, multimillionaires. For a TL;DR a breakdown of Collins’ own portfolio, you can check out this blog post I wrote on how to invest.
To learn more about why we love J.L. Collins and some of his lessons derived from the late, great Jack Bogle, check out this podcast episode from the Personal Finance Club:
4. Set for Life by Scott Trench
Financial literacy book for: real estate investing and a step-by-step plan to wealth
Level: beginner or intermediate
Like Think and Grow Rich, this book will recalibrate your internal compass to see wealth building a certain way, and act accordingly. But even better, it is an actionable, achievable guide to becoming wealthy that anyone can follow in 2022 and beyond.
Trench provides steps to reach zero debt, and then ladder to your first $25,000, $50,000, and $100,000 to financial freedom. In the years since, I have implemented this book step by step, often without even thinking about it, and the results were as promised.
This book will teach you how real estate investing, house hacking, and living below your means will make you wealthy.
5. Quit Like a Millionaire by Kristy Shen and Bryce
Financial literacy book for: taking the leap out of your day job
Level: intermediate, but applicable for anyone
Have you finagled your salary to six figures? Are you saving 30-50% of your income? Are you house hacking with a roommate?
Just when you think you’ve read it all and mastered the basics like a pro, Quit Like a Millionaire will make you think again. Here are some highlights from this epic read on how to retire in your thirties:
Don’t pursue your passion (yet)
Kristy and Bryce are now on permanent vacation, traveling the world as digital nomads while Kristy pursues her passion writing children’s books.
But this wasn’t always the case, and it isn’t what they recommend you do to begin with either. Quit Like a Millionaire explains why the hollow advice of “Pursue your passion” handed down to millennials from icons like Steve Jobs is a recipe for financial trouble.
When faced with her own option to pursue a writing or engineering degree, Kristy did the math and opted to invest in the degree that would pay for itself: engineering.
While she had to endure some miserable years doing time in an office, this decision ultimately afforded her the luxury and freedom of retiring in her thirties to pursue her dreams of writing.
If you are a college student trying to pick a major, the mathematical breakdown of ROI (return on investment) on your degree is worth the price of the book itself.
How to retire early and forever
This book really gets interesting when it explains how to sail into the sunset of retirement, never to return to your day job again.
Even if the market crashes to earth shattering depths in your first years of a fledgling retiree, Kristy and Bryce prepare you with a plan to stay retired for good by building a cash cushion, yield shield, and leveraging geo-arbitrage.
Cash cushions and yield shields
The authors advise to have at least three years of living expenses to protect yourself from any dips in the market. And, building an investment portfolio of interest paying assets, such as real estate or dividend stocks, that pay you income monthly or quarterly will protect you from dipping into your investments during a market down cycle.
Geoarbitrage
Consider this: America and other Western countries are usually the most expensive places in the world. So by settling in another country like Thailand, Bali, or Vietnam, you can easily reduce your living costs and expenses. That is why Kristy and Bryce alternate their time traveling between more expensive European countries and lower cost countries. This allows them to “arbitrage” their savings in Canadian currency, cut living costs ruthlessly, and stay retired forever.
6. Your Money or Your Life by Vicki Robin and Joe Dominguez
Financial literacy book for: money “awareness” and learning the true value of your time
Level: beginner
The Godmother of the financial independence movement, Vicki Robin offers a rebellious anecdote to the “more is better” hedonic treadmill of consumerism. She systemically deconstructs why money isn’t the answer to happiness and what will bring true life satisfaction instead. As a bonus, the book offers tools and calculators that will teach you the true value of your time so you can spend it as wisely as you do your money.
Financial Freedom by Grant Sabatier
Financial literacy book for: optimizing your day job, finances, and starting a side hustle
Level: beginner or advanced
On his journey going from $2.25 in the bank to over $1,000,000 in five years, author Grant Sabatier has read over hundreds of financial literacy books and is dubbed “The Millennial Millionaire” by CNBC. He distills this invaluable experience and knowledge into this must-read that details everything from how to hack your day job to making money online.
Watch my interview with Grant below to learn more about the book:
There are really too many amazing financial literacy books out there to pack into a single list. If you want to keep your financial education going, you won’t be disappointed by diving into these classics.
What is your favorite personal finance book and why? Comment below and maybe we’ll add it to the list!