With our busy schedules it’s important to take time out every once in a while and just sit back and relax with a great book. Every year, I try to put together some sort of summer reading list whenever I get some personal downtime. Sometimes I’ll read a book from cover-to-cover and other times I’ll just read certain sections or chapters that look interesting.
I find that I draw a lot of inspiration and motivation from reading and even re-reading some of the personal finance classics. They’re easy reads and offer timeless advice. They remind me that personal finance isn’t all that complicated. In fact, the fundamentals of personal finance and building wealth have remained unchanged since time immemorial. The basic formula has always been the same:
1. spend less than you earn,
2. save and invest the difference, and
3. repeat steps 1 and 2 until you reach financial freedom.
While the formula is straightforward and simple, it takes time, usually a long time, for it to work for us. That’s what makes our financial journeys so challenging. It requires a long-term commitment to achieve what is ultimately a long-term goal of financial freedom.
On my road to financial freedom, I’ve found that, at times, it can be discouraging when I feel like I’m not getting results fast enough or when I experience some type of financial setback. Does any of this sound familiar? I’m sure that we’ve all been there at some point. Anyways, I’ve found that reading some of the classic books on personal finance help to teach me the importance of patience and discipline when it comes to investing. They give me renewed motivation to stick with my financial plan and to stay the course on my road to wealth and freedom.
Last summer I revisited The Richest Man in Babylon, Rich Dad, Poor Dad and The Automatic Millionaire. All 3 of them are classics and are all really great reads that give you the basics of personal finance and investing. So what’s on my reading list this summer? I’ll be revisiting Ben Graham’s The Intelligent Investor, particularly his chapter on “The Investor and Market Fluctuations,” where he famously introduced the character of Mr. Market. This book is always a great read and full of useful knowledge, particularly with regard to investor psychology, setting up an investment portfolio and on how to value companies. Warren Buffett has said that his investment style has been heavily influenced by the teachings of Ben Graham. So if you haven’t already, I’d strongly suggest giving it a read.
I’ll also be reading Robert Hagstrom’s The Warren Buffett Way. Besides writing about the world’s most successful investor and his investing principles, there is a chapter on “Managing Your Portfolio” that I thought looked interesting. Beyond that, I might also read The Millionaire Next Door by Thomas Stanley and William Danko. This is another classic that profiles the saving and investing habits of millionaires.
If there’s one book that I highly recommend for anyone just learning about personal finance and investing, it’s William J. Bernstein’s If You Can: How Millennials Can Get Rich Slowly. It’s a short book (about 20 pages), but it’s an excellent, succinct overview of personal finance and the 5 major challenges facing, not just millennials, but all investors. Mark at My Own Advisor has recently written a great article on this book that you can read here.
That’s what I’ll be reading this summer. What about you? Do you have any must-read personal finance books on your reading list?