5 must read finance books for beginners
Are you struggling with your finances? Do you find yourself broke at the month end? Do expenses feel heavy? I learnt about money the hard way. You don’t have to. The art and science of getting rich or even having enough money starts with finance knowledge. Here are 5 must read finance books for beginners that will empower you with some solid foundation on finance.
1. I will teach you to be rich by Ramit Sethi
Ramit Sethi’s advice is no-nonsense and practical. Forbes hails him as a “wealth wizard” and he is called the “new guru on the block” by Fortune. There are many people who claim to have followed the advice in this book and have saved or earned money.
I Will Teach You to Be Rich claims to empower you with
• Different options to invest your money( index funds, target funds,stocks,bonds..)
• Set up high interest bank accounts
• Automate your finances
• Avoid late fees, manage debts
• Save hundreds or even thousands per month (and still buy what you love)
• Handle buying a car or a house, paying for a wedding, having kids, and other big expenses—stress free
• Negotiate for a raise at work
“The single most important factor to getting rich is getting started, not being the smartest person in the room.”
2. The automatic millionaire by David bach
This book offers a step by step plan to build wealth. It is a very easy read. You can finish it within a couple of hours by the beach !
The book re-iterates on few simple tips which we already may know, but may not be following necessarily. Like, saving at least 10% of your gross income, making savings automatic, clearing off credit card debt.
Remember, inspiration unused is merely entertainment. To get new results, you need to take new actions
3. Broke Millennial: Stop Scraping By And Get Your Financial Life Together by Erin Lowry
This is an ideal basic book to start, for teens, young professionals and millennials. It covers topics like retirement, financial planners and housing. A great book to devour if you do not want to live from pay cheque to pay cheque.
4. Your Money or Your Life by Vicki Robin
This book takes you through 9 steps to transform your relationship with money and achieving financial independence. The first 3 steps throw light on monitoring your cash flow. The next 4 steps gets you to review your cash flow results to see if your cash flow is in line with your personal goals. The last 2 steps are about investing your capital for the long-term, empowering and educating yourself to make your own financial investments. The books also provides many real life examples on how these methods were adopted by different people for their financial success.
Waste lies not in the number of possessions but in the failure to enjoy them
5.The Psychology of Money
In this book Morgan Housel talks about 19 stories exploring the strange ways people think aobut money. It shares observations on our relationship with money and tells us how our thinking towards money drives the critical decisions of our life. Some of the key take aways from this book –
Time is the most powerful force in investing.
Spending money to show people how much money you have is the fastest way to have less money.
Someone driving a $100,000 car might be wealthy. But the only data point you have about their wealth is that they have $100,000 less than they did before they bought the car (or $100,000 more in debt). That’s all you know about them. We tend to judge wealth by what we see, because that’s the information we have in front of us.
However I do like to caution you about –
1. Some financial books can get dry in between but hang in there and extract as much as useful information you can.
2. Read slowly and make note of what is relatable and interests you.
3. These must read finance books for beginners are not guides to getting rich overnight . They are aimed at strengthening the basics and lay the foundation for financial literacy
4. There is a never a one size fits all approach in these books. Take what is relevant and learn to ignore the irrelevant.
5. There are several books out there on financial literacy. Financial literacy is a very broad topic. If you are looking to learn more on specific topics like budgeting, investment approach, debt management, do comment below and I shall try to suggest more appropriate books to suit your needs.
If you do have other recommendations that are must read finance books for beginners, do let me know in the comments section below. Happy reading and best luck to you on the path of financial freedom !
