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I am a book junkie. My goal is to have a wall of books or my own personal library like a college professor. That’s one reason that I wrote the 10 best personal finance books I have on your bookshelf last year which included The Total Money Makeoverby Dave Ramsey, Crush Itby Gary Vaynerchuk, The Automatic Millionaireby David Bach, and several other great personal finance books that everyone should read.
So, I thought it would be interesting to talk about what I am going to read this year throughout the year. This year I’m going to read 12 personal finance books or at least one per month. Later I will be sure to include my reviews for each of these books. So be sure to check back often and see the reviews.
1. Mad Money by Jim Cramer – Cramer, co-founder of TheStreet.com, the daily financial news Web site, and co-host of CNBC’s Kudlow & Cramer, is a successful trader and former hedge-fund manager. His autobiography, Confessions of a Street Addict (2002), was an honest portrayal of his sometimes-brutal rise to the top; it was not a trading manual. Here Cramer reveals how he made his money and distills his methods so that the average reader can understand them.
Rather than catering to the Wall Street party line of “buy and hold” investing, he is an advocate of “buy and homework.” He recommends starting with just four stocks in safe, diverse sectors and devoting a minimum of one hour per week of study to each company.
2. I Will Teach You To Be Rich by Ramit Sethi – Ramit Sethi’s 6-week personal finance program for 20-to-35-year-olds. A completely practical approach delivered with a nonjudgmental style that makes readers want to do what Sethi says, it is based on the four pillars of personal finance— banking, saving, budgeting, and investing—and the wealth-building ideas of personal entrepreneurship.
Sethi covers how to save time by not wasting it managing money; the guns and cars myth of credit cards; how to negotiate like an Indian—the conversation begins with “no”; why “Budgeting Doesn’t Have to Suck!”; how to get things rolling—for real—with only $20; what most people don’t understand about taxes; how to get a CEO to take you out to lunch; how to avoid the Super Mario Brothers trap by making your savings work harder than you do; the difference between cheap and frugal; the hidden relationship between money and food.
Not to mention his first key lesson: Getting started is more important than being the smartest person in the room. Integrated with his website, where readers can use interactive charts, follow up on the latest information, and join the community, it is a hip blueprint to building wealth and financial security.
3. Rich Dad Poor Dad by Robert T. Kiyosaki – The book is a unique perspective through exposure to a pair of disparate influences: his own highly educated but fiscally unstable father, and the multimillionaire eighth-grade dropout father of his closest friend. The lifelong monetary problems experienced by his “poor dad” (whose weekly paychecks, while respectable, were never quite sufficient to meet family needs) pounded home the counterpoint communicated by his “rich dad” (that “the poor and the middle-class work for money,” but “the rich have money work for them”).
Taking that message to heart, Kiyosaki was able to retire at 47. Rich Dad, Poor Dad, written with consultant and CPA Sharon L. Lechter, lays out his philosophy behind his relationship with money.
4. The Family CFO by Kim Snider – Snider explains the basics of personal finance and investing in simple, easy-to-tackle steps that will lead you straight to financial freedom. If you want–or need–to get your financial house in order and keep it there, this guide offers clear-cut advice on planning, saving, investing, and managing risk.
Applying the basic principles of how to manage a successful business, Snider teaches readers critical skills, such as creating personal financial statements, building a six-month emergency fund, identifying their greatest risk, and how to protect themselves, determining their money’s higher purpose, and more.
5. Beating the Street by Peter Lynch – Peter Lynch’s “invest in what you know” strategy has made him a household name with investors both big and small. An important key to investing, Lynch says, is to remember that stocks are not lottery tickets. There’s a company behind every stock and reason companies and their stocks perform the way they do.
In this book, newly revised and updated for the paperback edition, Peter Lynch shows you how you can become an expert in a company and how you can build a profitable investment portfolio, based on your own experience and insights and on straightforward do-it-yourself research. There’s no reason the individual investor can’t match wits with the experts, and this book will show you how.
In Beating the Street, Lynch for the first time explains how to devise a mutual fund strategy, shows how he goes about picking stocks, step-by-step, and describes how the individual investor can improve his or her investment performance to rival that of the experts of the investment clubs.
6. How to Get Out of Debt, Stay Out of Debt, and Live Prosperously by Jerrold Mundis – Whether you are currently in debt or fear you’re falling into debt, you are not alone. Sixty million Americans—from doctors to secretaries, from executives to the unemployed—face the same problem and live under the same daily stress.
Based on the proven techniques of the national Debtors Anonymous program, here is the first complete, step-by-step guide to getting out of debt once and for all. You’ll learn how to recognize the warning signs of serious debt, negotiate with angry creditors, collection agencies, and the IRS, design a realistic and painless payback schedule, identify your spending blind spots, cope with the anxiety and daily pressures of owing money, the three cardinal rules for staying out of debt forever, and more.
7. A Random Walk Down Wall Street by Burton G. Malkiel – Especially in the wake of the financial meltdown, readers will hunger for Malkiel’s reassuring, authoritative, gimmick-free, and perennially best-selling guide to investing. With 1.5 million copies sold, A Random Walk Down Wall Street has long been established as the first book to purchase when starting a portfolio.
In addition to covering the full range of investment opportunities, the book features new material on the Great Recession and the global credit crisis as well as an increased focus on the long-term potential of emerging markets. With a new supplement that tackles the increasingly complex world of derivatives, along with the book’s classic life-cycle guide to investing, A Random Walk Down Wall Street remains the best investment guide money can buy.
8. The Four Pillars of Investing by William Bernstein – William Bernstein’s commonsense approach to portfolio construction has served investors well during the past turbulent decade—and it’s what made The Four Pillars of Investing an instant classic when it was first published nearly a decade ago.
This down-to-earth book lays out in easy-to-understand prose the four essential topics that every investor must master: the relationship of risk and reward, the history of the market, the psychology of the investor and the market, and the folly of taking financial advice from investment salespeople. Bernstein pulls back the curtain to reveal what really goes on in today’s financial industry as he outlines a simple program for building wealth while controlling risk.
Straightforward in its presentation and generous in its real-life examples, The Four Pillars of Investing presents a no-nonsense discussion of the art and science of mixing different asset classes into an effective blend, the dangers of actively picking stocks, as opposed to investing in the whole market, behavioral finance and how state of mind can adversely affect decision-making, reasons the mutual fund and brokerage industries, rather than your partners, are often your most direct competitors, and strategies for managing all of your assets—savings, 401(k)s, home equity as one portfolio.
9. The Bogleheads’ Guide to Investing by Larimore, Lindauer, and LeBoeuf – The Bogleheads’ Guide to Investing is a slightly irreverent, straightforward guide to investing for everyone. The book offers sound, practical advice, no matter what your age or net worth. Bottomline, become a Boglehead, and prosper! Originally just the chat-line ruminations of Boglehead founder Taylor Larimore, and Morningstar forum leading cohorts Mel Lindauer and Michael LeBoeuf, their trusted advice has been brewed and distilled into an easy-to-use, need-to-know, no frills guide to building up your own financial well-being – so you can worry less and profit more from the investments you make.
Invest like a Boglehead, and let their grassroots investment wisdom guide you down the path of long-term wealth creation and happiness, without all the worries and fuss of stock pickers and day traders. If you face a financial crisis or problem, or simply want to know what is prudent to do with the money you save, the Bogleheads will have the answers you need to help you gain your financial footing and keep it.
10. The Big Three in Economics: Adam Smith, Karl Marx, and John Maynard Keynes by Mark Skousen – This is one of the great personal finance books this year. Economic history and the history of economics come alive in this spirited account of the times and ideas of the three most influential economists in world history: Adam Smith, the father of laissez-faire; Karl Marx, developer of the socialist model; and John Maynard Keynes, theorist of the twentieth-century welfare state.
11. Common Stocks and Uncommon Profits and Other Writings by Philip A. Fisher – Widely respected and admired, Philip Fisher is among the most influential investors of all time. His investment philosophies, introduced almost forty years ago, are not only studied and applied by today’s financiers and investors but are also regarded by many as gospel. This book is invaluable reading and has been since it was first published in 1958.
12. The Wealth of Nations by Adam Smith – Adam Smith’s masterpiece, first published in 1776, is the foundation of modern economic thought and remains the single most important account of the rise of, and the principles behind, modern capitalism. Written in clear and incisive prose, The Wealth of Nations articulates the concepts indispensable to an understanding of contemporary society; and Robert Reich’s new Introduction for this edition both clarifies Smith’s analyses and illuminates his overall relevance to the world in which we live.
What’s on your nightstand this year? Are there any great personal finance books that I should add to my reading list. I’d love to hear what you’re reading. Please send me an email hank[at]MoneyQandA.com or leave a comment below.
