Six Personal Finance Books I Recommend!

I am sometimes saddened (though increasingly less surprised) by people that lack sufficient literacy in personal finance. It’s not their fault. These are bright capable people that have managed multiple areas of their life, have a college degree (often two!) or have started a business where they have to negotiate with suppliers and financial institutions. Those things are harder to learn and manage than basic financial literacy.

Why didn’t they learn more about personal finance along the way?  Maybe it was scary, they lacked confidence, their parents discouraged them or fought about it, their friend from high school has managed it for them but never explained it (sign of a bad advisor, by the way). Some people are just really busy and it looks boring. So many reasons!

Perhaps they felt that the first step was specifically looking at THEIR finances. In that case, the first step seems daunting: talking to their spouse about spending, remembering fifteen passwords, gathering documents.

However, the first step can just be generally learning about personal finance topics and then moving into the specifics of your situation. That takes the focus off of you in the short term; when you have better skills, context, and knowledge, you can then more easily understand your unique situation.

I think the key for everyone is to learn more, ask better questions and when they finish one book to reflect on it….then maybe pick up another one. Here is a list: not a complete list, not a perfect list, but today’s list of books that have helped me over the years and may help you.

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The Millionaire Next Door: There are several books by Dr. Thomas Stanley (and coauthors) that are worth reviewing to understand the true picture of wealth. By identifying, interviewing, and researching millionaires, he was able to present a sometimes surprising portrait of their habits and traits. It will teach you the difference between perceived affluence and true wealth.  There is a difference!

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One Up on Wall Street – this iconic book by legendary Fidelity Investments manager Peter Lynch still packs a punch in demystifying stock picking, and why securities are priced the way they are.  I don’t necessarily encourage stock picking, but any investor should understand how they are priced and how Wall Street thinks. Mr. Lynch breaks it down for you like a neighbor, not like a fund manager.

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Not a book, but a frequent contributor online is Christine Benz of Morningstar. Her humble and educational way of researching and exploring topics is a great contribution to our public dialog around money.  Topic by topic, readers up their game…and their confidence. Here is a good one to start with.

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I recently read The One Page Financial Plan by Carl Richards.   As you move from the general to your specific, this book does a great job of explaining a simple approach to understand more and do better.  It also starts to dip your toe a bit into the why of your money with a reflective humility that is worth adopting.

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Psychology of Money – As the author Morgan Housel says, “we all think we know how the world works. But we’ve all only experienced a tiny sliver of it.” This book deftly explores financial topics with bite-sized insight and a Yoda-like simplicity.  If you’re not sure where to start, maybe start with this one.

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Seven Stages of Money Maturity – Speaking of the WHY of your money, this gem by George Kinder takes a deep dive into “understanding the spirit and value of money in your life” and encourages you to go deeper. Mr. Kinder and his approach have influenced many and you might be next.  

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Dave Pedersen is an Advice Only Financial Planner. Based in Hermosa Beach California, he shepherds clients (typically age 40+) through “The Complicated Years”, where they have overlapping goals and need insight from a trained professional. Compensated only for his time and work (and not commissions or management fees), Dave provides true independent insight. Interested? Reach out to discuss further.