Clients often ask how we can help their children learn basic financial literacy, and I suggest they start with these four books. I am having my kids read all four once they turn 17, and you could start earlier if you choose to, but I wanted to come organically and not force it on my kids. Around 17-18, kids seem to transition into young adults and start asking questions about investing, including the basic principles.
A small disclaimer – I do not receive any compensation for these books or for giving reviews; this is just my general opinion, and I found them helpful.
In a random order, here are the four books that I would recommend and a quick summary of each:
“Rich Dad Poor Dad” by Robert Kiyosaki
Kiyosaki’s book is a personal finance classic that contrasts the financial philosophies of two father figures in the author’s life: his own father (Poor Dad) and his best friend’s father (Rich Dad). Here’s a quick summary:
The book emphasizes the importance of shifting from a mindset of working for money to having money work for you. Rich Dad teaches that financial independence comes from investing in assets that generate income.
Kiyosaki stresses the importance of financial education. Understanding how money works, including concepts such as assets, liabilities, and cash flow, is essential for achieving financial success.
“The Psychology of Money” by Morgan Housel (My personal favorite!)
This book explores how our behaviors and emotions influence our financial decisions, and here’s a quick summary:
Housel emphasizes that financial success is more about behavior than technical knowledge. How you manage money, handle risk, and make decisions plays a crucial role. Additionally, Housel identifies how to manage emotional influence, long-term thinking, luck, and risk. Lastly, reminding the reader that personal finance is personal.
The book provides valuable insights into the psychological aspects of money management, encouraging readers to reflect on their own financial behaviors and attitudes.
“The Total Money Makeover” by Dave Ramsey
Is a practical guide to achieving financial fitness, and here’s a quick summary:
Ramsey outlines seven “Baby Steps” to help individuals manage their finances. These steps include building an emergency fund, paying off debt, saving for retirement, and more.
This book is a great starter plan for a young family that wants to start by paying off debt and creating an emergency fund.
The book is a step-by-step plan designed to help individuals achieve financial peace and security.
“Just Keep Buying” by Nick Maggiulli
Last, but certainly not least, is Maggiulli’s practical guide to investing and personal finance, and here’s a quick summary:
Maggiulli suggests flexible savings and abandoning a fixed saving rate in favor of saving what you can when you can. This approach allows for more flexibility and adapts to changes in income.
It also focuses on earnings, and instead of cutting expenses to the point of misery, the book emphasizes that the best way to save more is to earn more. Increasing your income can significantly boost your savings potential.
It warns against lifestyle inflation, where increased earnings lead to increased spending. Maggiulli encourages maintaining a disciplined approach to saving and investing.
The book also highlights the importance of a long-term investment strategy based on data and evidence, rather than emotions. This helps in managing psychological barriers to investing.
The central idea is to keep investing consistently and let time and the markets work in your favor. This approach aims to simplify personal finance and make it accessible to everyone.
Once again, if you missed my mentioning of it before, these are just my general opinions, and I am not a paid person for any of these authors. So, take some time to share these books with the young adults in your life or even check them out yourself. Or, if you are looking for more book recommendations to expand your financial literacy or have questions about personal finance, feel free to reach out via our contact page.
Chris graduated from the University of Maine, where he played hockey on a scholarship, and retired from professional hockey in 2007. In the community, he remains engaged, serving as a youth hockey coach. Chris holds the CERTIFIED FINANCIAL PLANNER™. Outside the office, he enjoys trying new food and wine, reading, traveling, playing golf and hockey, fat tire biking, and donating to local charities. His passions include being a husband and dad, lake life with the family, watching his son and daughter play sports, and spending time with his wife. To learn more about Chris, connect with him on LinkedIn.
Heisten Financial, LLC is a registered investment advisor with the SEC. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities, and past performance is not indicative of future results. Investments involve risk and are not guaranteed.