Top 15 Financial Literacy Books You Wish You Had Read Sooner

I can’t tell you how many times I facepalmed reading about money management, especially when I first learned about it. There were so many simple changes I could have made years earlier but failed to even acknowledge that I didn’t know what I was doing with my money.

Financial literacy was my first step in the process. I knew that there was information out there and the first thing I did was get my hands on as many financial literacy books as I could.

With so many books on the market, it was overwhelming to decide which ones to invest my time and money in. However, by finding the right financial literacy books, I learned how to save, invest, and become debt-free, all while building wealth.

What Are The Best Financial Literacy Books

In this list, I will include books that personally helped me not only understand how money works but also understand the psychology and mindset that goes into taking control of your finances.

Here are 15 of the best financial literacy books picked by me personally:

1. If You Can: How Millennials Get Rich Slowly: By William J. Bernstein

This was the first book I read when first seeking out information on money management and one of the most important books to start out with.

If You Can is a short and easy-to-read guide for those starting out in their financial education. It keys in on the importance of saving as much money as possible, investing in a diversified portfolio of low-cost index funds, and avoiding high fees and taxes at all costs.

This book provides a simple step-by-step plan of financial “hurdles” and includes reading assignments at the end of each one to guide readers through more financial book suggestions.

William Bernstein’s advice is applicable at any stage of your financial life, and he stresses the importance of avoiding timing the market or picking individual stocks as an investment strategy.

If You Can is a perfect starting point for anyone seeking basic financial advice, and is packed with useful information that will make a real difference in your financial life.

2. The Millionaire Next Door: By Thomas Stanley & William Danko

“The Millionaire Next Door” is an eye-opener and a great follow-up to “If You Can” and is the first book recommended in the first hurdle of that book.

Stanley and Danko emphasize how people can become wealthy without living a lavish lifestyle.

This book provides insight into what readers should focus on to create wealth and how to manage money effectively.

The Millionaire Next Door challenges common misconceptions about what it means to be wealthy and highlights how true millionaires often live surprisingly frugal and low-key lives.

This concept is a personal eye-opener for many readers, as it reveals that those with true wealth are often individuals you wouldn’t suspect and gives an example of how a plumber with his own business driving a Ford F-150 can have more wealth than a lawyer driving a luxury car and living in a big house.

This is because the financial upkeep of the lawyer’s lifestyle often keeps them in a debt spiral living paycheck to paycheck causing them to lack true wealth.

Overall, The Millionaire Next Door is a great book for the average Joe looking to live within their means and keep their spending habits in check.

3. The Richest Man in Babylon: By George Samuel Clason

“The Richest Man in Babylon” is a timeless classic that tells the story of Arkad, the richest man in ancient Babylon, who shares his financial wisdom with his fellow citizens.

This book emphasizes the importance of living below your means saving and investing wisely, and avoiding debt.

One thing I really like about this book is it presents financial advice in an engaging way through a story that draws you in and makes you care about the characters and their personal struggles.

One of the strengths of this book is it emphasizes taking responsibility for your financial situation.

It helps you understand why certain financial habits are essential for making informed decisions. “The Richest Man in Babylon” is entertaining, informative, and perfect for anyone who prefers engaging stories over a textbook-style format.

4. Rich Dad, Poor Dad: By Robert Kiyosaki

If you’re looking for a book to shake up your mindset on finances, “Rich Dad, Poor Dad” by Robert Kiyosaki is a great place to start.

Even if you’ve been living under a rock for the last couple of decades, chances are you’ve heard of this book or at least of Robert himself.

Through the story of his two fathers, Kiyosaki stresses the importance of financial education and investing in income-generating assets such as real estate, stocks, and businesses.

He challenges readers to think like an entrepreneur and take calculated risks while being open to learning from mistakes.

The book emphasizes the difference between working for money and having your money work for you, encouraging readers to think outside the box of traditional strategies.

Kiyosaki’s practical advice on building wealth and his unique perspective on finances make this book a thought-provoking yet challenging way to take control of your financial independence.

5. Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor: By John C. Bogle

Written by John C. Bogle, also known as the founder of Vanguard Group and a pioneer when it comes to index funds, offers valuable insights into the world of mutual fund investing.

Bogle promotes a passive investment strategy that involves buying and holding a diversified portfolio of low-cost index funds. He goes into detail about why trying to beat the market through active management and high fees is a losing game in the long run as it can eat up earnings that you’ve worked so hard to build.

This book really teaches the importance of keeping investment costs low and the impact that high fees can have on your returns over time. He urges you to pay attention to expense ratios and other costs when selecting mutual funds, especially if you want to buy and hold for the long term with little intervention.

Another important point that Bogle makes is the need for transparency and accountability in the mutual fund industry. He argues that mutual fund companies should be more upfront about their fees and performance and that investors should have a say in how these companies run their operations.

Common Sense on Mutual Funds is for anyone far enough along in their journey where investment decisions are going to be the necessary next step.

6. A Random Walk Down Wall Street (The Time-Tested Strategy for Successful Investing): By Burton G. Malkiel

In a similar vein as the book Common Sense On Mutual Funds, A Random Walk Down Wall Street argues that trying to time the market or pick individual stocks is a losing game in the end.

Malkiel says that the best approach is to simply hold a diversified portfolio of low-cost index funds and discusses the impact of fees and taxes on investment returns. He goes on to offer practical advice on minimizing costs to maximize your returns.

One main key takeaway from this book is the idea of the “efficient market hypothesis,” which suggests that stock prices reflect only available information and that it is impossible to consistently outperform the market through individual stock selection or market timing.

Malkiel also discusses the history of the stock market, the impact of economic trends and events on stock prices, and the psychology of investing.

A Random Walk Down Wall Street is another pick in addition to Common Sense On Mutual Funds to help you understand the importance of picking and investing in the right mutual or index funds to maximize your profits in the stock market.

7. Think & Grow Rich!: By Napoleon Hill

Think & Grow Rich by Napoleon Hill is a classic focused on mindset and positive thinking to achieve a successful life.

This book is based on the principles of personal achievement through interviews of many successful people to discover what habits made them successful.

The book is divided into several chapters, each of which focuses on a different aspect of personal success.

Hill emphasizes the importance of setting clear and specific goals and taking action toward achieving them. He also discusses the importance of self-discipline, staying persistent, and overcoming setbacks and failures.

Think & Grow Rich focuses on the power of the mind in shaping our lives and encourages readers to develop a positive mental attitude to visualize themselves achieving their goals.

Hill also emphasizes the importance of surrounding oneself with positive and like-minded people to help you achieve these goals over time.

Think & Grow Rich is a great “mindset” book to achieve success in your personal or professional life. The advice is practical, straightforward, and based on the experiences of successful people.

8. The Little Book On Common Sense Investing (The Only Way to Guarantee Your Fair Share of Stock Market Returns): By Jack C. Bogle

The Little Book On Common Sense Investing is another guidebook written by Jack C. Bogle that recommends investing in low-cost, passively managed index funds to guarantee fair stock market returns over time.

Bogle advises investors to adopt a long-term perspective and avoid chasing short-term market fluctuations to maximize returns. The book offers practical advice on constructing a diversified portfolio of funds that reflects your personal risk tolerance and investment goals.

This book is similar to Common Sense on Mutual Funds mentioned earlier in this article and also written by Bogle. However, Common Sense on Mutual Funds covers a broader range of topics related to mutual funds and dives into the weeds a bit more about the mutual fund industry and its complexities.

The Little Book On Common Sense Investing is a concise and more simplified guidebook with a focus on practical advice that is easy to understand and implement making it ideal for the novice investor looking for an entry point.

I highly recommend both books, but I would suggest starting with The Little Book On Common Sense Investing as it is more focused and easier to understand.

9. The Little Book That Beats the Market: By Joel Greenblatt

In this book, Greenblatt explains his Warren Buffet value investing inspired “magic formula” for investing in the stock market, which involves selecting high-performing companies with a low price-to-earnings ratio and a high return on capital.

He argues that by focusing on these two simple metrics, investors can identify undervalued companies that are likely to outperform the market over the long term.

This method is for people with some analytical experience that want to dive deeper into understanding the companies they want to invest in.

One thing I like about this book is that Greenblatt’s approach is straightforward and easy to understand, making it accessible to investors regardless of your level of experience.

He also provides practical advice on how to implement his strategy, including how to use stock screeners to identify promising investment opportunities. You can find many free stock screeners online and are a valuable tool for analyzing stock information.

The Little Book That Beats the Market is ideal for folks that want to start an account of hand-picked stocks of companies that they believe in and plan to hold for the long haul.

10. The Intelligent Investor: By Benjamin Graham

The Intelligent Investor by Benjamin Graham is a classic book on investing that emphasizes the importance of value investing, which involves buying stocks at a discount to their intrinsic value and holding them for the long term.

Graham’s approach to investing focuses on the fundamentals of a company rather than short-term market fluctuations. He provides practical advice on how to analyze financial statements, assess where a company stands among its competitors, and calculate its true intrinsic value.

The book also covers diversification and risk management and provides guidance on how to construct a well-diversified portfolio.

Written in 1949, the principles outlined in “The Intelligent Investor” have stood the test of time and continue to be relevant today.

Although the book can be challenging to read and geared toward seasoned investors, there are simplified versions available, and Warren Buffett’s investment strategies are rooted in the teachings of Graham.

The Intelligent Investor is widely considered the most popular and well-known financial literacy book in history among money management seekers.

11. The Total Money Makeover (A Proven Plan for Financial Fitness): By Dave Ramsey & Thomas Nelson

I like to catch Dave Ramsey’s podcast when I can. He offers pretty sound advice when it comes to unique money management situations, so I had to check this book out also.

Ramsey’s “Baby Steps” approach starts with creating a budget, paying off debt, saving for emergencies, investing for retirement, and building wealth.

His advice is simple and emphasizes the importance of living below your means, avoiding debt, and taking a long-term perspective on your finances.

Ramsey’s strategies have helped millions of people achieve financial freedom, and his book is recommended for anyone looking to improve their financial situation no matter how unique.

The book’s common-sense approach is designed to help you take control of your finances and make meaningful progress toward reaching your financial goals.

While I don’t always agree with some of Dave Ramsey’s methods, he really has a way of bringing the reality of financial life to the forefront.

12. Money: Master the Game (7 Simple Steps to Financial Freedom): By Tony Robbins

As one of the most famous and unique self-help speakers out there, Tony Robbins is no stranger to improving the lives and well-being of millions of folks over the years.

His “no-nonsense” lecturing style can really kick you into reality when it comes to addressing and taking responsibility for every area of your life. Because of his famous footprint, Tony has been able to gain access to some of the most brilliant minds in the financial world.

In Money: Master the Game, Robbins interviews some of the world’s top financial experts to uncover their secrets for success and shares their unique knowledge of how they got to where they are today and what it took to get there.

Robbins’ approach to personal finance is based on his “7 Simple Steps,” which include setting financial goals, creating a plan, investing in the right vehicles, minimizing taxes, protecting your assets, creating a lifetime income plan, and giving back to society.

While I really like Robbins’ enthusiastic style, I really didn’t find myself completely blown away by the secrets this book teaches. Much of the information is found in many of the other books already on this list which I had already read at the time.

However, I still recommend it as it can be a starting point book to steer you in a direction of how you would personally want to attack your finances. Plus, the information is from top-notch investors and businessmen, so you most likely will find some great takeaways from this read.

13. The Psychology of Money (Timeless Lessons on Wealth, Greed, and Happiness): By Morgan Housel

If you really want to understand the mindset of why we make certain financial decisions and the psychology behind them, then this is a great book to check out.

Housel examines the psychological factors that influence our attitudes toward money and how these attitudes can impact our financial success and overall happiness.

Through a series of insightful essays, Housel shares timeless lessons on wealth, greed, and happiness.

He explores topics such as the role of luck in financial success, the importance of managing risk, and the dangers of how we compare ourselves to others. Housel’s approach is based on the belief that understanding our own psychology is key to achieving financial security and happiness.

Housel emphasizes the importance of a long-term perspective on money, avoiding emotional decisions, and staying focused on our end goal. His approach is based on common sense and research, making it a valuable resource for anyone looking to improve their financial well-being.

If you’re interested in exploring the complex relationship between money and human behavior, this book is a must-read.

14. The Little Book That Builds Wealth: By Pat Dorsey

Much Like Joel Greenblat’s book The Little Book That Beats the Market, Dorsey’s approach is more focused on analyzing a company’s competitive advantages, or “economic moats”.

This includes things like brand power, intellectual property, and network effects.

He also emphasizes the importance of looking for companies with sustainable growth prospects and a strong track record of financial performance.

This is similar to the broad idea of value investing where you want to see an overall upward trajectory of a company’s earnings over time.

Dorsey provides practical tips on how to evaluate companies and avoid common pitfalls, such as overpaying for growth or investing in companies with weak competitive positions.

I really like this book for the reason that I personally think that a company’s position among its competition along with a successful track record are two of the most important lessons when learning how to analyze individual companies to invest in.

15. The Education of a Value Investor (My Transformative Quest for Wealth, Wisdom and Enlightenment): By Guy Spier

Guy Spier provides an engaging and thought-provoking memoir that chronicles his journey from a Wall Street trader to a value investor with a focus on long-term thinking and ethical practices.

Spier shares his experiences and insights on investing, philosophy, and personal growth while emphasizing the importance of finding a personal investing style that aligns with your values and principles.

Spier’s writing is both candid and reflective, making it easy for many people to relate to his personal struggles and triumphs.

He shares valuable lessons on overcoming personal biases and cultivating a growth mindset, as well as practical tips on how to analyze and value companies.

What Are Financial Literacy Books?

Financial literacy books are books that teach you about money management, investing, and building wealth.

They’re a MUST resource if you’re looking for ways to improve your financial knowledge and take control of your finances.

By reading financial literacy books, you can learn important skills like budgeting, saving, and investing, which can help you achieve your financial goals and build wealth over time. Who doesn’t want to do that?

FAQ

Why Is Financial Literacy Important?

Financial literacy is important because it enables you to make the best decisions when it comes to your money management habits.

It helps you understand how to budget, save, invest, and manage debt, and improve your overall financial mindset.

What Are the Most Important Financial Literacy Skills?

Here are some of the most important financial literacy skills:

1. Budgeting: Planning a budget is the main starting point in becoming more financially literate. If you don’t know where your money is going every month it will be much more difficult to gain control of your long-term goals.
2. Saving: This is especially important for emergency situations. Be sure to have an emergency fund of 3 to 6 months of living expenses put away. As a plus, putting this money in a high-interest online savings account will help grow your money even faster!
3. Investing: Investing is the best way to grow wealth over time, but it can also be risky if you don’t have the skill set to make the right decisions. Diversifying your portfolio with the right funds will ensure you are protected during times of market instability, so be sure to make this a priority in your financial literacy education.
4. Managing debt: This goes back to budgeting. Keeping yourself out of debt will not only make you more attractive to lenders when life situations require it, but you will save tons of money by avoiding interest rates and late fees.
5. Understanding credit: Don’t ignore your credit score! Credit scores affect your ability to qualify for a loan, rent an apartment, or even get that dream job you’ve always wanted. It’s important to understand how credit works, what it takes to build a good credit score, and how to avoid many common credit mistakes.

What Are the Benefits of Being Financially Literate?

Being financially literate can provide a plethora of positive outcomes in your life. Here are some of the top benefits of becoming and staying financially literate:

1. Better decision-making: When you’re financially literate, you have a solid understanding of how to manage your money. This helps you to make informed decisions about your finances allowing you to set financial goals, create a budget, and invest your money wisely.
2. Improved financial security: Financial literacy can help you achieve financial stability and security. You’ll be able to handle emergency expenses, avoid debt, and save for the future.
3. Reduced financial stress: Money problems are a major source of stress. Becoming financially literate can help you develop the skills you need to manage your money effectively. In turn, this will reduce stress and anxiety when it comes to your finances.
4. More opportunities: Becoming financially literate has a snowball effect and can create more opportunities than you probably realize. You will have an easier time starting your own business, investing in real estate, and pursuing other financial goals that were previously out of reach.
5. Better quality of life: Ultimately, financial literacy can improve your overall quality of life. By having control over your finances, you can enjoy peace of mind, freedom to pursue your passions, and a stable, secure future.

Why Is Financial Literacy a Challenge?

Becoming financially literate can be a challenge for many people. Here are some of the reasons why:

1. Lack of education: Many of us would be much better off if financial education was taught in school. Even the most basic concepts of personal finance could lead us to a better understanding of the right goals and strategies.
2. Complex financial products: If you’ve ever heard the phrase “paralysis by analysis” then you know what this means. With so many financial products and services out there it can be difficult and challenging to make informed decisions about investments, insurance, and other financial products.
3. Cultural and social factors: I personally experienced this within my own peer group. Watching your friends buy fancy products can create pressure within yourself to “keep up” with everyone else. This can influence your financial knowledge and attitudes in a negative way.
4. Limited access to financial resources: If you are already struggling with money, it can be even more difficult to invest in products to lead you down the right financial path. This can include things like financial advisors, educational materials, and budgeting software.
5. Behavioral biases: Finally, our own behavioral biases can make it challenging to make good financial decisions. For example, advertisers have a way of compelling us to overspend or make impulsive purchases.

Conclusion

Whether you’re just starting to learn about personal finance or you’ve been around the block with it a few times, there’s always something new for you to discover.

As you explore the different types of financial literacy books whether from this list or on your own, you’ll find valuable insights and strategies that can help you take control of your financial future.

I guarantee you that it will help ease your mind and make you more confident in your decision-making.