Financial Literacy: Books That Help You Take Care of Your Future
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So what exactly is financial literacy? The widely accepted definition is that financial literacy (or financial education) represent a set of skills and knowledge about financial, credit and debt management that allow a person to make financially responsible decisions.
Of course, like Robert Kiyosaki (author of Rich Dad, Poor Dad) says, in real life, the answer to the question “What is financial literacy?” depends a lot on who you’re asking. For some, it means learning how to save money or use a credit card responsibly. For others, it means learning how to manage a retirement account or invest in the stock market.
Regardless of which one of these answer resonates with you, we can all agree that financial education is crucial for avoiding high levels of debt and also for securing the ability to provide for the future.
This might sound like basic stuff for some, but it’s not. Surveys all across the world revealed that people make poor financial decisions in both emerging economies and developed economies. Also, if you think that highly educated consumers with higher income are more financially educated, you’d be wrong. For example, four in ten Americans don’t plan for retirement at all.
So why is this happening? I mean, for some it might be common sense that you need to take care of your spending and plan for the future. But apparently, it’s not common sense for everyone. And one of the main culprits is the lack of financial education in schools. All across the world. The same surveys showed that financial education is still an issue in a lot of countries in Europe, North America, Australia or Asia.
And this brings us with the most important question. How do you get yourself to be financially educated? Well, the first step would be to be taught basic financial education principles by your parents. If you weren’t lucky enough to have that, you need to educate yourself. And probably the most accessible way to do that is…guess what? You’re right, reading books. Most important, the best financial literacy books you can find. There are countless books on financial education and making a list of „the best ones” wasn’t easy. But we think we came pretty close. And, as usual with our book lists, all of the books mentioned here were recommended by dozens of entrepreneurs.
So, hope you find these books useful and don’t forget to drop us a line if you read any of these books or if there are any books you think we should’ve mentioned here.
Rich Dad Poor Dad
Author: Robert Kiyosaki
Recommended by: Vladimir Oane, Robert Hajnal and 20 others
Darren Chua: The first book that inspired me was actually Rich Dad Poor Dad by Robert Kiyosaki. I read the book when I was 12 and provided me with another perception of school and money. It was a good starting point for me to reconsider everything that was taught in school. School does not prepare us for life after graduation. Robert’s lessons inspired me to seek experiences and advice beyond the typical school system.
Think and Grow Rich
Author: Napoleon Hill
Recommended by: Daymond John, Ola Olusoga and 10 others
David Kramaley: “Think and Grow Rich” was recommended by a professor in a Computer Science class I had (random!). This book really convinced me that the human potential is limitless as long as we apply ourselves. I am in control of what I can achieve. If you apply yourself long enough and are willing to put in the hard work, you can literally think yourself to riches, and it’s not only meant in the sense of money, but everything!
The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich
Author: Tim Ferriss
Recommended by: James Altucher, Bryan Callen and 32 others
Joel Gascoigne: This is one of the most practical books I’ve ever read. It is packed with so much information and actual resources to get you on your journey with creating passive income and if you desire, traveling. It really opened my mind to a lot of productivity improvements I could make.
I would also say that The 4-hour Work Week helped me to dream about the idea of traveling while working. I read it 4 years ago, and in that time I have traveled the world and lived in 4 different continents. It’s been one of the best experiences of my life so far, especially when I’ve spent months rather than weeks or days in a place.
MONEY Master the Game: 7 Simple Steps to Financial Freedom
Author: Tony Robbins
Recommended by: Madalina Uceanu, Michael Herrmann and 2 others
Michael Herrmann: Save more and invest in low-cost index funds. A little US-centric but important advice for personal finances.
The Richest Man in Babylon
Author: George S. Clason
Recommended by: Daymond John, David Heinemeier Hansson and 2 others
Yaro Starak: You get this one idea about your finances that you take forward like Richest Man in Babylon – you know, save 10% of your money every year and make sure it grows 10% every year, and that’s how you can become wealthy long-term, because of compounding – a simple idea.
The Millionaire Fastlane: Crack the Code to Wealth and Live Rich for a Lifetime
Author: MJ DeMarco
Recommended by: Scott Oldford, Turgay Birand and 2 others
Scott Oldford: I don’t know how many times I read that book when I was broke but, of course, the sidewalk, slow, and fast lane, I borrowed that for the SSF method that I talk about sidewalk, slow, and fast lane for lead generation. He talks about it from a financial perspective, so almost completely, entirely unrelated but that book was very, very life changing for me. So, two of those books, by far, the best books that from a level of changing my life at the right time.
The Intelligent Investor
Author: Benjamin Graham
Recommended by: Warren Buffett, Michael Hebenstreit and 1 other
Warren Buffett: To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. This book precisely and clearly prescribes the proper framework. You must provide the emotional discipline.
The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness
Author: Dave Ramsey
Recommended by: Vincent Pugliese
Vincent Pugliese: Linchpin by Seth Godin, The Total Money Makeover by Dave Ramsey, and Rich Dad, Poor Dad had immediate effects on my life.
The Automatic Millionaire: A Powerful One-Step Plan to Live and Finish Rich
Author: David Bach
Recommended by: Tiffany Aliche
Tiffany Aliche: The Automatic Millionaire by David Bach – this is the book that started Tiffany on her financial journey.
Business Adventures: Twelve Classic Tales from the World of Wall Street
Author: John Brooks
Recommended by: Bill Gates, Warren Buffett and 1 other
Bill Gates: Brooks’s work is a great reminder that the rules for running a strong business and creating value haven’t changed. For one thing, there’s an essential human factor in every business endeavor. It doesn’t matter if you have a perfect product, production plan, and marketing pitch; you’ll still need the right people to lead and implement those plans.