Our Top 5 Recommendations for Reading on Personal Finance and Financial Independence
As a self-described “personal finance junkie,” I have read a lot of books over the years on financial independence. These helped me achieve my own financial independence. Below are the Good for Your Wealth Top 5 recommended books on financial independence and personal finance.
The Good for Your Wealth Top 5 List of Books for Financial Independence
#1 Simple Path to Wealth by JL Collins
This book does an excellent job at simplifying concepts of personal finance. It was originally written as a series of journal entries to his daughter to teach her about the importance of personal finance, but he later compiled it into this gem of a book. I finished this book in one day and took away a lot of great ideas!
The path to wealth is not a “get-rich-quick scheme.” It is a series of choices you make as it relates to debt, spending and investing so that you can live a rich, free life. JL Collins effortlessly walks through the importance of having F-U money, the 4% rule to understand when you’ve reached the goal where your expenses can be sustained by a safe annual withdrawal amount and more.
Whether you are new to personal finance or have been around it for a while, this book is worth the read. Let’s just say, I have many sections highlighted in this book.
#2 Your Money Or Your Life by Vicki Robin
This New York Times Bestseller has been around for more than 25 years, but still holds up as one of the best. Vicki Robin, credited as a founder of the FIRE movement, walks through saving money with mindfulness vs. strict budgeting, getting out of debt and decluttering your life. Her advice is meaningful, understandable and impactful. She helps the reader understand that money represents the ability to live free vs. collect more “things” that end up taking over your life with debt and keep you in a constant hamster wheel trying to dig out.
Your Money or Your Life is an amazing book that helps transform your relationship with money to help you achieve financial independence. Financial independence opens up a whole world beyond the 9-5 grind.
3. I Will Teach You To Be Rich by Ramit Sethi
This is a great read if you’re just starting your journey toward financial independence. Ramit Sethi walks readers through simple steps to lead them toward whatever their definition of “rich” is. Rich is subjective. This book provides real insight into investing money, getting out of debt and making use of credit cards and bank offers for rewards. He touches on what a diversified portfolio means and how the use of index funds vs. mutual funds can help build wealth faster. He also walks through managing student loan debt, the psychology of money and talking your way out of late fees.
4. Millionaire Next Door by Thomas Stanley and William Danko. I read this book for the first time nearly 20 years ago. It is in my Hall of Fame for personal finance books. Drs. Stanley and Danko conducted a study of individuals – those with the appearance of having a high net worth (e.g. lawyers, doctors) and those who did not seem to (e.g. small business owners, plumbers, etc.).
What they illustrate in The Millionaire Next Door is that high income does not equate to high net worth. There are ‘Accumulators of Wealth’ and there are spenders. What they uncover through talking with real people is that most millionaires don’t drive fancy cars and live in rich neighborhoods. They are normal people amongst us. On the other hand, high-income earners with low net worth are amassing debt to uphold an appearance of wealth.
Overall, this is a very interesting, timeless read to help you understand real wealth vs. fake wealth and the importance of leaning more toward being a wealth accumulator vs. a consumer.
Timeless classic!
5. The Richest Man in Babylon by George S. Clason
This book was originally published in 1926! It provides a very strong foundation for the principles of personal finance and financial independence. Clason covers the concepts of paying yourself first, controlling spending, the impact of compounding, guarding your investments from loss, the importance of owning property vs. renting, insuring a future income later in life and increasing your ability to earn more income. Although this book is going on nearly 100 years old, if you like history, it provides timeless advice in a historical context and is inspiring to those seeking to progress through a path to financial independence.
Until next time!