Anyone who doesn’t read is missing out on a staggering amount of experience and wisdom, gleaned over thousands of lifetimes.
Following favorite blogs is a great start, and it might be all you need, but if you’re like me and still enjoy the feeling of a book in your hands (okay, or an e-reader), then consider adding these financial-independence favorites to your reading list.
I recommend buying them so you can highlight your favorite passages and make notes, but you can always see if your local library has them in stock instead if you prefer to learn about money for free.
THE BEST (FIRE) FINANCIAL INDEPENDENCE BOOKS
The Simple Path to Wealth by J L Collins
The Simple Path to Wealth is a holy grail of the financial independence community. If you read only one book on this list, choose this one. It’s a simple, practical guide to building wealth over time, focusing primarily on investing.
Collins demystifies topics like how the stock market works, what the different types of retirement accounts actually are, how to choose a good asset allocation, how to minimize the fees you pay, etc. The book is written in an extremely easy-to-understand way, so it’s an especially good starting point for anyone whose default reaction to the stock market is confusion.
Whether you’re a total beginner, or you’ve been contributing to your workplace 401(k) without really knowing what that means, or you’ve used a financial advisor for years, or you’re an active investor looking to simplify your tactics…just read the book.
Your Money or Your Life by Vicki Robin
Your Money or Your Life focuses more on the mental side of a financial independence journey (the subtitle is 9 Steps to Transforming Your Relationship With Money and Achieving Financial Independence). And — let’s be honest — the mental discipline side of things is just as important (if not more) than the “here’s where to put your money” side.
The book will help you develop better habits, value your time, and be mindful and proactive about how you use money. The powerful central takeaway is to view all your purchases in terms of “life energy” to decide if they’re truly worth it. If you make $20 per hour, is the newest iPhone model worth 50 working hours of your life? It encourages hindsight as well: looking at past purchases, figure out whether you really got enjoyment from an item or activity, or whether it was just an impulse buy.
Chapter 9 is the “investment advice” section of the book, but honestly, you can skip it. That’s not where the book shines, and if you read The Simple Path to Wealth, you won’t need it anyway.
The Millionaire Next Door by Thomas J. Stanley
If you picture millionaires as a bunch of Burberry-clad people cracking open champagne on a yacht, The Millionaire Next Door will change your perspective. The vast majority of modern millionaires don’t get that way by blowing their money on luxuries, and they don’t change their core habits once they hit seven figures either.
This isn’t the book to read for in-depth investment advice, but it will challenge your preconceptions about what it means to be rich, teach you how to live below your means and resist the lure of consumerist culture, and ultimately make the idea of becoming a millionaire yourself one day seem a lot more accessible.
Building Wealth and Being Happy by Graeme Falco
This is one of the more recently written books on the list. Building Wealth and Being Happy is directed toward millennials and younger generations, addressing how to live in the modern world with its income disparity and financial challenges facing anyone not born into wealth.
One advantage of this book is that it addresses some of the practical “life” questions that other books don’t, such as renting vs. buying, the idea of being a digital nomad, the future of jobs, how social/environmental responsibility can impact your investment strategy, etc.
Early Retirement Extreme by Jacob Lund Fisker
This book might not be attractive to everyone, but if you have an analytical mind coupled with a dream to live a more self-sufficient lifestyle, Early Retirement Extreme is worth the read. It focuses on designing your ideal life in a highly academic way. (Most people will agree that it lives up to the “extreme” part of its name, as well.)
Be warned: this book is not an easy read, or a quick one. It assumes an educated readership. The tone is extremely scientific — some say bordering on dry. Math is involved. But if you want to really get to the heart of what you require from life and how to meet those needs efficiently, and you’re not scared by formulas, then give it a shot. Just take it slowly and be prepared to re-read paragraphs. You can also join the official ERE forum to discuss and ask questions as you read.
How Much Money Do I Need to Retire? by Todd Tresidder
How Much Money Do I Need to Retire? by Todd Tresidder, creator of FinancialMentor, unravels how modern retirement planning works so you can plan with confidence. The 2nd edition of this book, released in 2020, includes 3 models for estimating how much money you’ll need to retire and the variables that could derail the number you currently have in mind. The author keeps the tone conversational but very straight-forward as he guides you through how to mitigate risk in your current retirement plan.
If you’ve been using a conventional retirement calculator or plan from your financial planner, you need this book. Not only will you get a real look at how retirement savings work, like the limitations of the commonly used Monte Carlo simulations and why the first years of retirement are the most important to your portfolio, but you’ll get the most accurate retirement number for your lifestyle. Bonus: after reading this book, you may even be able to reduce your retirement number by as much as $600,000. Late in the book, Tresidder challenges readers to flip the script on what they thought they’d need during retirement and focus instead on the lifestyle that makes them happiest. It bends the traditional rules for what you need to save and spend in retirement.
Finance Books to (Probably) Skip
These two books are popular in certain circles, but they really don’t offer the best advice for the average person. Save your time.
Rich Dad, Poor Dad by Robert Kiyosaki recommends ideas that are questionable at best (like staying out of the stock market altogether), with no actual research to back him up. Plus, the writing is poorly organized and even his core “two dads” story often contradicts itself, so by the time you finish you’ll probably be left more confused than when you started.
Total Money Makeover by Dave Ramsey is targeted towards a specific type of person: someone who’s deep in debt, has an unhealthy relationship with money, and will use the book/program to help change those things. By the time a Ramsey reader starts thinking about investing, though, they will have outgrown his advice, as he recommends investing in actively managed mutual funds, which cost more and almost always perform worse than passive index funds. (Plus, he hates credit cards…but if you have the self-control to use them wisely, credit cards are awesome.)
Your turn! What are your suggestions for great personal finance/financial independence books? Have you read any on this list?
Kate is a writer and editor who runs her content and editorial businesses remotely while globetrotting as a digital nomad. So far, her laptop has accompanied her to New Zealand, Asia, and around the U.S. (mostly thanks to credit card points). Years of research and ghostwriting on personal finance led her to the FI community and co-founding DollarSanity. In addition to traveling and outdoor adventure, Kate is passionate about financial literacy, compound interest, and pristine grammar.