Best Money Books Of All Time (An Investor’s List)

It’s a bold claim to put a list together and say it houses the best money books of all time. And the truth is, no one is qualified to make that list, because no one has read everything, and everyone is different. My “best money books” list is different from yours.

So here’s what I did.

To put this list together I reached out to everyone I knew who takes their finances seriously. I asked my investment group, and I also asked friends and family whose opinions I trust. And I went back through my personal library and picked out the books that had the biggest impact on me.

I can’t promise you that every book on this list will influence you in the same way it influenced me (or one of my friends), but my experience has taught me that it’s not really important whether or not you read the “best” books. What’s important is that you start reading, and when you’re done reading you act on the knowledge you acquired.

So here’s my list, which should probably be titled “Books Michael and his circle of influence thought were really great.”

And a few of these can be found free online.

Change How You Think About Money

There are a lot of people out there who never seem to have enough money. If that’s you, it may be time for a little kick in the buttocks. Changing the way you think about money is the first step to financial freedom.

Rich Dad Poor Dad

When I listen to interviews of successful investors, one book is recommended more than any other, Rich Dad Poor Dad. This is one of those books that gets you excited about money.

Robert Kiyosaki grew up getting financial advice from his biological father and his best friends father, who was destined to be wealthy. The story points out many of our cultural misconceptions about money, and how they can lead us to life of financial mediocrity. And in the end the message is basically that your financial education was inadequate, so you must start learning again.

You’ll learn about the power of cash flow, and the pitfalls of working a regular job. Not all investments are created equal, and Kiyosaki explains why he invests in real estate and business, but avoids the stock market.

In many ways this book planted the seeds of what became my investing philosophy: acquire cash flowing assets that support your life.

The Richest Man in Babylon

This is one I’ve recently read. In the same way as Rich Dad, The Richest Man in Babylon teaches the principles of wealth accumulation through the telling of stories.

Arkad is the richest man in Babylon, the wealthiest city of the time. But he started life as a scribe. He was taught the principles of building wealth by an aging money lender named Algamish. Arkad learns hard lessons, but he manages to create a small money making machine that puts him the path to financial well being.

After the death of Algamish, Arkad inherits his wealth and continues to grow the machine.

Arkad spends most of the book teaching various citizens of Babylon the principles he used to become the richest man in the city. The principles are just as valid today as they were then, and they are very simple.

Arkad explains his Seven Cures for a Lean Purse (empty wallet), discusses the mindset needed to attract lady luck, and shares his Five Laws of Gold. These doctrines highlight the importance of paying yourself first, investing, consulting expert opinions, and taking action.

Think and Grow Rich

Think and Grow Rich is as much a mindset book as it is a money book. Turns out the two are very much connected.

Napoleon Hill spent years interviewing the most successful people of his time including Andrew Carnegie, Henry Ford, Theodore Roosevelt and Charles Schwab. Think and Grow Rich lays out the Laws of Success from those interviews that can be used to achieve success in any area.

I believe a huge part of multiplying your money is your mindset. If you want the blueprint used by almost every modern success guru, you’ll want to pick up this book.

The Millionaire Next Door

I’ll be honest, I started reading this book, but I couldn’t finish it. I just got bored. The reason it’s on this list is because several of my friends and family put it on their lists.

What’s great about The Millionaire Next Door is that it dispels many of the myths society has about rich people using real data. It paints the picture of a real life millionaire, as opposed to the Hollywood representation of one.

You’ll see that the overwhelming majority millionaires are created not by luck or by striking gold on some game changing company, but by spending less than they earn and investing the rest.

The book becomes a practical guide for how to create wealth slowly and steadily over long periods of time. My only knock on the book is it takes a long time to make its point.

Change Your Money Behavior

You may gather a sound academic understanding of how to get from rags to riches, but that doesn’t mean your actions will follow suit.

As humans we tend to have emotional responses to all kinds of things. The problems come in when we allow those emotions to dictate our actions. These books address some different aspects of that phenomenon.

The Total Money Makeover

I just finished The Total Money Makeover (I read a lot of books to write this article), and I was surprised. I wasn’t surprised that Dave Ramsey was blunt and unyielding in the presentation of his views, I was surprised at how much I agreed with him.

One of Ramsey’s most outspoken views is to never take on debt, and that view is opposite to my own. But the best quality of this book is it addresses most of the biggest mistakes adults make with their money.

He violently condemns taking on loans for all depreciating assets (cars, tvs, furniture and even education). He preaches the importance of a budget and knowing the purpose for every dollar you earn. And he walks step by step through the actions he took towards his own financial freedom.

If nothing else, this book will slap all the money killing misconceptions out of you, and give you great actionable (and fool proof) steps to put you on a good financial path.

The Signal and the Noise

I’ve typically thought of the vast amounts of data available to me as a good thing when it comes to making more informed decisions. The Signal and the Noise shows that there are numerous examples of humans finding patterns in the data where there are none.

Nate Silver examines humanity’s prediction problem and demonstrates our tendency to use the “noise”, rather than the “signal”, in those predictions. He says “We love to predict things — and we aren’t very good at it.”

Silver shows how often our predictions are wrong based purely on data, and advocates for human judgement when analyzing data. For example there was a strong correlation with the performance of the stock market and the winner of the Super Bowl between 1967 and 1997. A computer might use this correlation to make predictions, but a human would know instinctively this correlation is only a coincidence. Coincidences like this are bound to happen within the scores of data we have available today.

He walks through our financial predictions, political predictions, sports and weather predictions and shows how our models of prediction are often fitted to the data available rather than the most important criteria.

I haven’t personally read this book and referenced this article and this article for a summary.

Thinking, Fast and Slow

Thinking, Fast and Slow depicts two systems in our brain, one is (slow) conscious and the other is (fast) automatic.

The automatic part in your brain is what makes you jump out of the way when you see a frisbee flying towards your head. It’s also the part that eats the fifth or sixth cookie even if you only planned to eat one.

The conscious part of the brain allows us to focus and solve more complex problems. This is the part of the brain that solve a puzzle or play a game of chess.

The book shows how these two sides of our thinking are constantly fighting for control and this can often lead to errors in judgement. Many of our money blunders come into play when we allow the fast part of the brain to make our decisions.

I haven’t personally read this book and referenced this article for a summary.

Invest In Real Estate

Investing in real estate is by no means an easy entry point for a new wealth builder. There are so many steps to get started and so many mistakes that can be made along the way, that it’s imperative to read up.

From assembling your team to determining the right purchase price to approaching your due diligence process to managing your tenants, these books will give you that base of knowledge necessary to avoid major losses on your first real estate deal.

The Book on Rental Property Investing

I’m never hesitant to promote anything from Brandon Turner or the Bigger Pockets community. That’s where I gathered my knowledge before taking my first jump into real estate. And it worked for me (so far)!

The Book on Rental Property Investing is just a book full of the most important information a real estate investor needs.

• How to analyze and value a property
• What to look for in a property management company
• Finding and screening tenants
• How to get financing, even without much money
• Getting your inspections done
• When to set up an LLC

And the list goes on. Kate and I are both the kind of people that just start walking and when we run into a hurdle we figure out how to get past it. When you run into a hurdle with your first real estate venture, The Book on Rental Property Investing will be there to help you get past it.

The Book on Managing Rental Properties

Another book from Brandon Turner and Bigger Pockets, The Book on Managing Rental Properties was my go to resource when I began managing our first rental property.

You learn to treat landlording like a business, and all the ins and outs of every step of the process.

1. Finding prospective tenants
2. Screening tenants at every step of the process (with your ads, on the phone, in person and with income, credit and background checks.
3. Getting the right paperwork signed
4. How to deal with difficult tenants

Some people will avoid real estate completely because they think they would hate being a landlord (I was one of them). I won’t laugh if that’s you, but truth be told I get a lot of fulfillment from managing our properties. You form relationships and provide safe clean housing for families in your community.

I say don’t let the fear of landlording hold you back. You can always hire a property management company down the line. If you do choose to go this route, you’ll need a great resource like The Book on Managing Rental Properties to keep you on the path to profit.

Invest In The Stock Market

The stock market is the most popular place to invest. Now I’ll be straight with you. I’m not a stock investor. So these books are at the recommendation of some stock market investors I respect.

Rule #1

Rule #1 is a great book to get you beyond investing in mutual funds and finding companies to support (and partially own) that have meaning to you. Phil Town creates a series of guidelines to follow when narrowing down your potential winners.

After putting together a list you’ll determine what gives each company its competitive advantage. Then you’ll use the Big Five metrics (return on invested capital, equity growth, earnings per share growth, sales growth and free cash) to determine the margin of safety price. This is the price that you feel confident gives you a good value. Once you have done this analysis it’s time to investigate the company’s management.

Going through the Rule #1 process will help new stock investors avoid blunders.

I haven’t personally read this book and referenced this article for a summary.

The Little Book that Still Beats the Market

Much like Rich Dad Poor Dad and The Richest Man in Babylon, The Little Book that Still Beats the Market by Joel Greenblatt teaches largely through story telling.

It starts by impressing upon you the importance of being able to value a company. You’ll learn about the difference between the value of a company and the company’s price in the stock market.

Beyond that, the biggest takeaway from the book is that you should look for lower price-to-earnings ratio businesses that have higher return on capital. The book takes you through how to use its “magic formula” to identify stocks with the best chances to grow.

I haven’t personally read this book and referenced this article for a summary.

You Can be a Stock Market Genius

Also from Joel Greenblatt, You Can be a Stock Market Genius goes into some depth about “special situations” like mergers, bankruptcies, restructurings, recapitalizations and options. And it looks at the unique ways you can profit off each different situation.

Greenblatt explains the importance of doing your research and becoming an expert in more specialized areas. When you have an understanding that most others don’t you can have a higher probability of profiting. You’ll be more capable of identifying these “special situations” and therefore more ready to realize financial gain.

I’m always a fan of detailed, researched and experienced based knowledge and that’s what You Can be a Stock Market Genius brings to the table.

I haven’t personally read this book and referenced this article for a summary.

Understand The Past

Almost every style of investing is affected by changes to the economy on the macro level. Stock prices rise and fall as citizens’ behavior and opinions change. Long term rentals can struggle to find tenants and unemployment rates rise.

The world has seen good times and bad and investors have prospered through both. There’s no better teacher than experience and one of the best ways to learn from that experience is to read about the investors of the past.

The Big Short

I just started this book and I was hooked with the first line:

The willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grown-ups remains a mystery to me to this day.

The Big Short is the story of the buildup to the 2008 housing crisis that bankrupted some major banks like Bear Stearns, while many other banks were bailed out by the U.S. government.

Author Michael Lewis shines a floodlight on the irresponsible practices of Wall Street that led to the most recent stock market crash in history. He also interviews some of the investors that spotted the risks and bet against the market to cash in huge on the crash.

I’ve only just started the book, but I’m already beginning to see what kind of detailed knowledge was required to cash in on the ‘special situation’ (to steal a term from Joel Greenblatt). If nothing else it’s a great retelling of one of the more catastrophic financial events in history.

Economics in One Lesson

Humans have a tendency to frame events affecting the economy with a short term view. “A tax increase makes it harder for me to get by.’ or “The onslaught of AI and machinery will put people out of work.”

Economics in One Lesson attempts to cover the most important lessons in economics and shows that a long term view is needed for sustained health of an economy. A short list of these lessons includes

• Economic fallacies
• Supply, demand and the diversion of demand
• Consideration for inflation
• The role of government and taxation, and how taxation affects motivation to produce
• The role of machinery in production
• Tariffs, importing and exporting

I believe our effectiveness as investors improves dramatically as our understanding of our global and local economies grows. Economics in One Lesson is the fastest path to creating the basic understanding of those.

I haven’t personally read this book and referenced this article for a summary.

Understand Tax Law

Tax-Free Wealth

Tax-Free Wealth is another of the Rich Dad Poor Dad brand. We often hear anger and frustration directed at the wealthy who may pay less in taxes than we do. Tom Wheelwright shows that this is usually the result of the way tax code is written, not a bunch of cheaters gaming the system.

The tax code is mostly a list of tax breaks, a bunch of ways to lower your tax burden. These laws are written with the intention of manipulating the behavior of citizens to do things the government can’t or doesn’t want to do.

Things like providing housing and supporting certain types of industries come with lots of tax breaks because those are things the government wants us to do. If we align our investment strategies with the tax code, we can significantly improve our return over time.

Conclusion

I feel more and more over time that reading is not only a way to educate myself, but a way to increase the average of the five people I spend the most time around. I can spend time with great investors by reading their books and in turn push myself towards their levels of success.

Now I can’t promise you that this list is definitively the list of the best money books of all time, but what I can promise you is that every single one of these books has elevated me or one of my trusted friends and family towards financial success.

Happy investing.

Share on Facebook

Tweet

Follow us