Many of you have asked for recommendations on good books in personal finance. There are plenty out there and I could probably create a list of 50... well, maybe 25. I like Dave Ramsey and Suze Orman books for general information and strategy. Rich Dad Poor Dad gives an interesting perspective on cash management and small business but I think it sends a dangerous message. The Millionaire Next Door has some great stats on how people truly become wealthy. And, The Intelligent Investor is a long time classic that Warren Buffett used to build his value investing empire.
While all these are good, there are two books that have stood out for me. Both these books focus on behavioral finance – why we do the things we do:
- Nudge by Richard Thaler and Cass Sustein
This book is a classic on how we make decisions. It focuses on how the presentation of choices can impact our decision making (known as "choice architecture"). More importantly, it shows how thoughtful design of choices can nudge people in the right direction. Great read and pertinent to finance, health and parenting!
- Your Money and Your Brain by Jason Zweig
This book sits at the intersection of your brain and investing. It reveals how the way you naturally think can be a barrier to investing success. It’s not a biology book on the brain (or I wouldn’t read it). Instead, it’s a book that helps you understand why you think the way you do when it comes to money. Another great read!
There are plenty of good personal finance books out there. I tend to like books that help me better understand my behavior and the behavior of those around me. Ultimately, getting rich is about discipline and making the right choices. These two recommended books should help you understand that process.
What other personal finance books do you like? What were your impressions on the books I’ve mentioned above?