Smart money: The 5 best books for financial literacy
It's time to make your money work for you.
Let me begin by saying that it's never too late (or too early) to start getting your financial life in order. As a first-generation American and college graduate, my parents helped me achieve great things. However, they always struggled with money — so I knew I had a lot to learn in this department.
Fast-forward to today and I'm proud to say my wife and I are debt-free, aside from a very reasonable (and strategic) mortgage. We have multiple savings and retirement accounts and are even on track to semi-retire before our 40s (even though we didn't take money seriously until our late 20s).
No matter where you may be in your journey at this moment, anything is possible once you take responsibility for your financial literacy. Below are five of the most impactful books we've read that have helped us earn more, save better, and spend smarter. Let's jump in.
The Psychology of Money
The highest form of wealth is the ability to wake up every morning and say, 'I can do whatever I want today.' — Morgan Housel
One of the most misunderstood aspects of financial independence is that there's a large emotional and psychological layer to our money habits. Sticking to a budget, finding a higher paying job, seeking out investment opportunities — none of these happen automatically. And many of us who grew up in poorer environments need help overcoming mental blocks before we can take these steps.
Morgan Housel's book is my top recommendation because it confidently steps beyond the what of financial management, and into the why. His reasoning is straightforward: the better we understand why and how we use our money, the more power we'll have to change for the better.
If you'd like to read a more in-depth summary of what this book has to offer, check out the following resource.
David Ramos
The Simple Path to Wealth
Money can buy many things, but nothing more valuable than your freedom. ― J.L. Collins
The Simple Path to Wealth
Your road map to financial independence and a rich, free life.
Author J.L. Collins is a legend amongst the F.I.R.E. (financially independent, retired early) community. If you've ever heard the term "index fund investing" or ETFs, you can probably thank Collins for launching these into the vernacular of modern financial literacy.
This book actually started as a blog series about stock investing. As it gained attention, he decided to compile his posts into a single book and edit it into a type of letter to his young adult daughter who wasn't particularly interested in finances. He explains that his aim was to help her live the most money-stress-free life possible by taking the easiest actions available (i.e., passive index fund investing).
If you've always wanted to learn more about how stocks work, but rather not jump headfirst into the wild world of day trading, this is the perfect guide to do just that. You'll learn how to save for long-term goals without diminishing your quality of life along the way.
Set for Life
10 years from now, make sure you can say that you chose your life, you didn't settle for it.
Set for Life is just one of the books published by the incredible organization BiggerPockets. They began as an online community to support new real estate investors. Since then, they've evolved into an education and resource company with revenue in the 8-figures — that's aside from managing a 9-figure real estate portfolio.
All that is to say everyone on their team really knows their way around a dollar. This book is meant to be an entry point into their more specific offerings. In it, you'll learn everything from the basics of money management (e.g., building a safety net of at least $25,000) to finding a freedom strategy that works for you (e.g., growing past $1,000,000 in net worth).
It's a practical, accessible read every ambitious provider should read at least once.
You Are a Badass at Making Money
What comes out of your mouth comes into your life. ― Jen Sincero
As mentioned above, there's a significant mental aspect to getting and staying wealthy. And while the first book on our list addresses this to a point, it's mostly constrained in what it views as reasonable goals. But what if you want more than a reasonable amount of money? What if you want to drastically increase your earnings and upgrade your lifestyle?
Well then, you're going to need a different kind of book — something that promotes a little more risk-taking, and a lot more self-confidence. Jen Sincero's third Badass book is exactly that.
The short read follows Sincero's own journey from a broke middle-aged person living out of a rented garage (literally!) to becoming a million-dollar consultant, and eventually a multiple times best-selling author. It's a wild ride that comes with a host of lessons you can apply to your own next chapter!
I Will Teach You to Be Rich
Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t. ― Ramit Sethi
I Will Teach You To Be Rich
No guilt. No excuses. Just a 6-week program that works.
Finally, if you find yourself bored by most financial literacy books (even some on this list — it's okay, I won't judge 😅), then Ramit Sethi's work might be the solution for you.
Sethi's text presents readers with an easy-to-follow six-week program for getting their financial lives in order: from figuring out how much debt you owe, to opening up the right kinds of bank accounts, to setting up automatic retirement savings - even with only a few dollars a month to start.
This book is definitely one of the most beginner-focused titles on our list, so if you already have some experience managing your money, you'll probably want to pick up one of the above titles. However, if you're brand new to this topic, and a little overwhelmed by it, then you'd be hard-pressed to find a better book.
Big money starts small
My own path toward wealth has been a winding one, and I certainly haven't made all of the best decisions along the way. But, every small positive choice has improved my life for the better. And now I can start to see their compounding effects both in my accounts and in my lifestyle.
Do yourself a favor and pick up one of these titles today. Your future rich self will be thankful you did!