7 Books to Read to Increase Your Financial LiteracySubmitted by Castlebar Asset Management on November 29th, 2017
Knowledge is power, and one of the easiest, most accessible ways to increase your knowledge is to pick up a book and read.
The more you understand about the ins and outs of money, the more you’ll feel empowered to make smart choices and create good habits. Your financial success can depend on your financial literacy.
These are some of our favorite titles to help you learn more about money. Consider hitting up your local library soon and adding these 7 books to your reading list.
If You Need to Adjust Your Money Mindset…
These books help bust money myths, can help you think differently, and show you different perspectives on common habits like spending, saving and more.
Pick up one of these titles if you want to reframe the way you think about money -- and more importantly, how you use it.
Stop Acting Rich: ...And Start Living Like A Real Millionaire
You might have heard of The Millionaire Next Door by Thomas Stanley. It’s another good read about how most millionaires actually live -- and how the majority of them aren’t living in McMansions, but rather, in our own neighborhoods.
That’s how they accumulated their wealth: by being frugal and avoiding massive, unnecessary purchases like more house than anyone knows what to do with.
Stop Acting Rich is a great follow-up to Stanley’s better-known title. It goes into much further detail about the real habits and preferences of people with massive amounts of money -- and underscores the point that if you want to be a millionaire, spending to look rich won’t get you there.
The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money
This book takes a look at how our emotions can influence our behavior, and cause otherwise smart people to make bad decisions about how they use their money.
It also provides ways to stay rational and grounded when it comes to finances, so you can avoid big mistakes and take the slow and steady route to financial success.
If You Want to Learn More About Investing...
You shouldn't invest your money in anything you don’t understand. But if you’re scratching your head feeling like you don’t understand anything about financial markets, these books will give you the knowledge you need to confidently move forward and grow wealth:
The Intelligent Investor: The Definitive Book on Value Investing
Although The Intelligent Investor was written decades ago, much of the wisdom contained within still applies to today’s financial markets and is well worth reading. Even Warren Buffett proclaims it the best investing book ever written.
Where Benjamin Graham’s initial instructions did fall out of date, financial journalist Jason Zweig has provided updates or drawn parallels to the reality of investing in the 21st century.
The book focuses on the importance of investing for the long-term and cautions against any gimmicky, get-rich-quick-and-easy schemes.
One Up On Wall Street: How To Use What You Already Know To Make Money In The Market
Peter Lynch is famously known as one of the most successful mutual fund managers ever -- and in One Up on Wall Street, he explains how average investors can use their inherent advantages to do better than the active managers constantly trading day in and day out.
His major points? Stick to what you know and invest for the long-term.
A Random Walk Down Wall Street: The Time-tested Strategy for Successful Investing
Burton Malkiel presents a straightforward, common-sense guide to investing with A Random Walk Down Wall Street.
More importantly, Malkiel also addresses some of the biggest mistakes average investors make -- like market timing or stock picking -- and explains why and how to avoid making those errors with your own investments.
If this title feels to difficult to get through, try the lighter and more accessible The Random Walk Guide to Investing: Ten Rules for Financial Success instead.
If You’re Just Getting Started…
Broke Millennial: Stop Scraping By and Get Your Financial Life Together
Erin Lowry started her journey to financial success by blogging about how she lived on a tiny salary in the heart of New York City. Her adventures in frugality and money lessons learned eventually lead her to turn her blog into a book that acts as a guide to fellow 20- and 30-somethings.
Broke Millennial takes Lowry’s youthful perspective and straight talk to package basic personal finance concepts, rules, and facts in a way that’s enjoyable to read and highly accessible.
At times entertaining and always educational, this is an excellent book to start reading if you’re just now thinking, “It’s about time I got my money right and put my financial life together.”
Personal Finance for Dummies
Nope, it’s not a joke. We’re serious about this one! Personal Finance for Dummies is a great starter kit if you don’t have the first clue about money, how finance works, or where to start to learn more.
It’s a great primer to help you learn common language and concepts around personal finance, and gives readers a great foundation of basic facts.
Once you understand those basics, you’re better positioned to add in more complex ideas and engage in more advanced conversations about money.
What’s Next After Developing Financial Literacy?
All of these resources are valuable and excellent reads. They can help you better understand your money -- and that empowers you to better manage and use your wealth to achieve your goals.
But it’s tough to develop a plan and strategy and stick to it over time to build the wealth you want. Books are great, but they don’t hold you accountable or answer additional questions you have after reading them.
For that, you might want someone you can actually engage with and talk to for advice that’s specific and tailored to your life and your financial situation.
If you’re ready to take your financial success to the next level, a financial advisor can be the partner you need to achieve your goals. But only if they can check a few important boxes:
- They should provide you comprehensive financial planning as a service in itself (and not just a “freebie” they tack on if you choose to invest with them).
- They should work as your fiduciary 100 percent of the time.
- They should be fee-only.
- They should be a CFP®, or CERTIFIED FINANCIAL PLANNER™
Learn what you can on your own -- but don’t feel like you need to plan and invest in a vacuum. Look for a financial planner who meets the standards above and understands and appreciates your individual goals.
Andrew Comstock, CFA
Please contact me at 913-660-0708 or by email to discuss your financial planning and investment management needs. You can sign up for our monthly newsletter here. Follow me on Twitter @CastlebarAM.
Disclaimer: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.