Personal Finance Books for Beginners To Take Massive Action
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Books play a big role to get started with on your journey to financial independence and building wealth.
I’ve listed 5 personal finance books for beginners you to check out below including quick snippets of what each book is about.
If reading print books is not for you, try listening to audiobooks instead.
Whilst I prefer physical books I still listen to audiobooks when on the move.
For audiobooks I use Audible, it’s super easy and friendly to use.
Let’s get into it.
Table of Contents
5 Personal Finance Books for Beginners
Reading is still a key part of our lives and our society alongside being a huge contributor to our personal and professional growth.
I have gained had a huge shift in my mindset from reading books.
I see books as a way of sitting down with the author and really getting a download from their mentality.
These are 5 money books which literally put me in a different space in my mind.
These 5 books, in no particular order, are:
- Total Money Makeover by Dave Ramsey
- Rich Dad Poor Dad by Robert Kiyosaki
- The Richest Man In Babylon by George Clason
- The Latte Factor – David Bach
- I Will Teach You To Be Rich – Ramit Sethi
If I had to pick one, it’ll be I Will Teach You To Be Rich.
Total Money Makeover – Dave Ramsey
Total Money Makeover is really an incredible all-rounded book packed with one of the most admirable personal finance coaches in the world.
If you don’t know who Dave Ramsey is, just search for him on YouTube and binge watch a few videos.
He’s a straight-talking no BS kind of guy, and I love that!
This book is perfect for beginners as it shocks your system about living life quite differently to the social norms of debt.
Alongside giving you a clear strategy to follow to go from a negative net worth to a positive net worth!
Essentially, Dave Ramsey is about eliminating debt, living within your means, and building towards financial wellness.
He’s broken this down with the famous 7 baby steps.
Dave Ramsey’s 7 Baby Steps:
- Save 1,000 for your emergency fund
- Pay off all debts except for mortgage
- Build the emergency fund to have minimum 3 months of living expenses
- Invest 15% into retirement
- Save for your children’s education
- Pay off your mortgage
- Build wealth and give
Key concepts from this book:
- While many people use debt to create the appearance of wealth, genuinely wealthy people tend to avoid debt entirely. We need to recognise the constraints and dangers of debt
- Financial insecurity is closer than you think or realise. If you lost your job today could you pay for your lifestyle expenses for the next 3 to 6 months?
- If you had to eat an elephant, you would take one bite at a time rather than eating the whole elephant in one day. The journey to financial freedom will take many steps and some time. The first step to financial freedom is creating your own emergency fund.
- Debt is always your worst expense because it grows over time. Debt allows an illusion for people to appear they are better off than they really are.
- Ultimately it’s possible to be wealthy if done right and by following the baby steps.
Rich Dad Poor Dad – Robert Kiyosaki
Rich Dad Poor Dad is one of the first personal finance books I read and couldn’t put down!
This book is perfect for beginners because it challenges a lot of concepts ingrained in our minds since a young age.
It also breaks down the difference in money habits between the poor and the rich.
The overall concept of this book is uncovering the money lessons Robert learnt from, what he calls, his 2 dads.
His biological dad was the poor dad, and his best freind’s dad was his rich dad.
In a nutshell, it starts to get you to think about building assets that put more money in your pocket, rather than putting your money in liabilities that take money from you.
Key concepts from this book:
- The poor and the middle-class work for money whereas the rich have their money working for them
- We focus on how much we make, but we should be more focused on how much we keep from the amount we make
- Most people acquire liabilities that they think are assets where rich people acquire assets
- Financial literacy about is what you do with the money once you make it, how you keep people from taking it from you, how to keep it longer, and how you make money work hard for you
- Your mind is the single most important asset you have
The Richest Man In Babylon – George Clason
The Richest Man In Babylon is such an interesting read! The old English style of writing is not for everyone but trust me, it is so good!
This book is great for beginners because it is one of the greatest reads about building wealth and how to keep it.
It’s packed with lists of rules and nuggets that this summary will not do it justice, however these will also empower to see things very differently.
Key concepts from this book:
3 Laws of Handling Wealth:
- Live on less than you earn
- Seek advice from those with experience as they are competent enough to give it
- Learn how to make money work for you
7 Cures of A Lean Purse:
- Save 10% of your income. Paying yourself first is your first wealth generator.
- Control your expenses and don’t fall into lifestyle inflation.
- Make your money work for you.
- Protect your money no matter how small.
- Own your home.
- Plan and save for your future.
- The more you learn, the more you earn.
There’s also the 5 laws of Gold, and has so many gems within it that will change your money mindset.
Ultimately, this book is about making your money work for you first and being wise with it.
The Latte Factor – David Bach
The Latte Factor is based on the idea that to earn true wealth you need to redirect your money from paying for small things to paying yourself first.
This includes both saving and investing your money for the future and building up your nest egg.
This book is great for beginners because it challenges the status quo that to be rich, one needs to earn a lot of money.
As young adults we often hold ourselves back because we conclude that we don’t earn enough to chase our dreams, well, keep reading.
Ultimately, this book teaches the concept of how building up your fortunes can be done for the price of a latte everyday, thanks to the power of compounding interest.
Key concepts from this book:
- The latte factor isn’t about being a penny–pincher or denying yourself. It’s about getting clear on what matters. It’s about the little daily luxuries, whatever they may be that cost five, ten or twenty a day that you could just as easily redirect towards your own future
- Imagine if you made your own lunches instead of buying it, or if you drove less and cycled or walked more. How much could you save?
- To ease the change in lifestyle, automate your savings and investments as much as possible. This is the best way of being financially disciplined in controlling your spending habits
- If you want to create a financial future for yourself, you NEED to pay yourself first!
- Your dreams are achievable and probably cost less than you think. Don’t wait until retirement to live rich, do it NOW!
I Will Teach You To Be Rich – Ramit Sethi
I love I Will Teach You To Be Rich because it recognises that getting started is more important than being an expert.
For all the beginners who feel like they can’t do anything because they don’t know anything yet, his book will be great for you.
Ultimately, this book will inspire you to take immediate action and it’s a great entry point into investing and saving money.
Key concepts from this book:
6 week game plan:
- Learn how to improve your credit score with credit cards.
- Get your bank accounts set up right.
- Open a 401k and investment account (401k = pensions in the UK).
- Budget. Figure out what you’re doing with your money.
- Automate so your accounts flow together nicely.
- Learn about investing.
Ramit also talks about frugality and how cutting your spending on everything is not sustainable.
Frugality, quite simply, is about choosing the things you love enough to spend extravagantly on.
Then cut costs mercilessly on the things you don’t love.
Take Action
Hope you’ve found these 5 personal finance books for beginners summary useful.
Sing up to Audible to listen to the audiobooks if you prefer.
Buy and read at least ONE of these books, especially the one that the summary jumped out at you.
Share this with your friend, family, or partner and encourage them to grow in the knowledge of money through these books.
Which book resonates with you the most? Let us know, we’d love to hear from you.
Knowledge is powerless without action
So take action, and take care
Thando