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What to read?

It often happens that someone wants to take first steps toward financial freedom at a slow pace, learns best from reading, or wants to have some great books to read while we are working together. If you check out any of the titles below, I’d be curious to hear what you think. Here are a few of my favorite books:

Helaine Olen (my favorite financial advice writer, you might remember her recurring column at Slate) wrote a book with Harold Pollock (of the University of Chicago) about the core tenets of financial behavior called The Index Card. The idea is that all the key information you need to know can fit on an index card. The principles are good and folks generally find this one very approachable, helpful, and easy to understand.

Your Money: The Missing Manual is a nice overview from J.D. Roth who developed my old favorite money blog, Get Rich Slowly. J.D. sold his site, wasn’t pleased with what the purchasers did to monetize it and bought it back. All this to say, I’ve appreciated his work for a long time and you may too. Though it may not be the prettiest I find J.D.’s combination of expertise, approachability, vulnerability, and honesty compelling.

Ramit Sethi has a very good book on money as well. It’s called I Will Teach You To Be Rich and focuses on building an automated system. The name is tool-ish but the content is really practical. It is less focused on avoiding lattes and more on automating (your investment/saving/etc), considering big expenses, and also increasing earnings. I think all those approaches can be very helpful in the right context. There is a second edition now with additional content but I haven’t read it though I presume it’s worth buying since it’s actually cheaper at this moment (link).

Bert Whitehead, who started the financial planning organization I am a part of (ACP) and has a really useful book that explains his approach to building a good financial life. Bert is especially helpful on matters of tax planning. His views are sometimes unconventional but always well-considered. That’s a useful combination.

The canonical book on investing is Burton Malkiel’s A Random Walk Down Wall Street. It is a bit less practical but very interesting/intellectually fulfilling and the most important and forceful single argument in the movement criticizing active mutual funds and the fees they charge.

Millionaire Next Door is a great book that looks at the lives of millionaires and shows that they usually aren’t opulent and part of why they are wealthy is that they tend to be practical and rather frugal. The main lesson is that people who look “rich” typically aren’t.

Perhaps the best-known, highest-impact guy in the personal finance world is a radio show host named Dave Ramsey. His show is a lot of fun and worth a shot, especially if you are comfortable with Christian-inflected approaches. His main focus is on avoiding debt (which can be an effective harm-reduction strategy but can miss major opportunities). Ramsey’s projections about stock returns aren’t well-grounded in evidence but lots of people find his work helpful even if it simplifies in ways that aren’t well supported. His main book is controversial (many professionals take issue with specifics) but has been effective for many people.

John Bogle was one of the most important financial innovators of the 20th century and his innovations created enormous value for investors, including middle-class people. His book on mutual fund investing is generally very well regarded. I am a big fan of his and curious to know what you think if you read it.

There isn’t a good basic intro book that also covers social issues in money management (noDAPL, socially responsible investment approaches and pitfalls, etc). Perhaps there will be someday.

 

 

[This piece was significantly revised on 1/30/2020 and now contains some updated links, corrects a couple of typos, and characterizes Ramsey’s book as often criticized.]