Unfortunately the worlds of finance, adulting, and business are filled with terrible advice, charlatans, and well-meaning, but ultimately misguided so-called gurus. You may not notice the difference and, even if you do, it will be too late. It breaks my heart that some of the most popular finance and business books are fatally deficient in my view. You should strive to be good with money, not cling to rigid systems that superficially help you but ultimately leave you behind your potential or lure you into complex areas beyond your time, resources, and expertise, with often incomplete or misleading advice.
I have chosen some of my favorite resources below, all of which are fundamentally solid. Even if you choose to pass on Demystifying Wealth, please follow the advice from the resources below.
The Simple Path to Wealth by Jim Collins
The Simple Path to Wealth is an absolute gem of a book which goes into depth on a number areas of great importance, especially about retirement issues. If you read just one book on investing for retirement, this should be it. Jim’s strategies are solid, proven, and timeless. The book is useful not just for novices and younger people just starting out, but also people far along on their wealth journey, as it addresses a number of issues affecting people nearing and in retirement.
I Will Teach You to Be Rich by Ramit Sethi
This book is broader as a comprehensive guide to someone starting out than The Simple Path to Wealth, although the latter is substantially more detailed on actual investment advice. I have given it as a gift almost as many times, usually to younger people from wealthier backgrounds where the attitude and assumed earning power resonate better. The book speaks to the part of me that, like Ramit, graduated from Stanford, but it sometimes resonates as tone deaf with the part of me that grew up poor and struggled. The book is weaker when it comes to handling financial crises and budgeting (especially the latter), but it excels as a step-by-step blueprint of what to when you first start. If you want detailed how-to guidance on all aspects of setting up accounts and systems, this is your book.
Most of the resources recommended on this page focus on simplified strategies that are applicable to nearly everyone. Some of you will hunger for sometimes excruciating detail, especially if you have complicated issues. If you want to learn more nuance, this is your book. Far better than the book is the Bogleheads Wiki (start here), which is the best single website ever created to teach financial literacy. Want no-nonsense advice on 529s with a full table state by state with links and footnotes to each? They’ve got you. Want to learn about budgeting? Same. John Bogle pioneered index funds and founded Vanguard. The name of the site and book honor him for making the exponential power of the market available to everyone. My primary criticism is that in the quest to be mostly neutral and factual, helpful opinionated guidance is missing in many areas.
Personal Finance Club by Jeremy Schneider
PFC is a site run by Jeremy Schneider. I first ran across Jeremy when I read his post Is IUL a Scam? Yes. (And whole life and indexed universal life are indeed total scams.) For taking on the vitriol of the insurance industry alone, Jeremy deserves a place in the Pantheon of financial literacy. Jeremy focuses on index fund investing. If you need convincing why investing in index funds is your key to success, you are in the right place. His site is a trove of common sense, well-presented investment advice that is solid and direct with helpful graphics. If you want something less overwhelming than the Bogelheads Wiki, PFC is an incredible site and Jeremy is a genuinely good and caring person who has your back.
The Psychology of Money by Morgan Housel
This is not really an investment book, but it does cover a crucial subject: how our brains conspire against our ability to become rich and make decisions in our best interest. I have read a number of works on this area and Morgan’s is the best. He even describes what he does himself in his own investments. You do not need a perfect strategy, just a reasonable one.
Tiny Habits by BJ Fogg
We often mistakenly think we are weak or lack will power and discipline when we fail to create new habits or break old ones. Instead, we do not understand the behavioral and scientific mechanisms of habit formation. Tiny Habits presents simple, easy-to-implement strategies for creating new patterns using the realities of our brain in our favor. Tiny Habits is a useful book far beyond the creation of wealth.
Never Split the Difference by Chris Voss
Chris Voss spent years negotiating international hostage situations for the FBI. If the terrorists have two hostages, you do not just split the difference, let them kill one, and call it a day. You need to win because lives depend on success. Traditional negotiation books systematically fail to understand how real-life negotiation works, especially when one side games the system (rationally) by being shockingly unreasonable. This is the book I give the CEOs I invest in before they negotiate anything important, especially if the other party is known to be difficult. Bonus: the techniques to tame global terrorists also do a remarkable job negotiating bedtimes with children.
John Gottman has rightfully become a legend in couples therapy as he systematically studied couples who survived decades together to see what they had in common. It turns out a lot. His research also can predict which couples will divorce and why. His methods have the highest clinical efficacy among major couples treatment methods, which is I am adamant that you should strongly prefer Gottman-certified couples counselors. His books are the ones I give friends to read together, both when they start new relationships as well as when they are in trouble, especially if the issue is infidelity or other trust rupture. The communication tools he recommends have applicability far beyond romantic relationships.
The Body Keeps the Score by Bessel van der Kolk
I did work with sexual assault and trauma survivors in college and everything I witnessed is compellingly explained by the decades of subsequent research in this book. Reading it years later was a profound moment, especially the sections on what he calls addiction to trauma. The impact of trauma has a very real physiological basis. Trauma literally rewires the brain and sensory system of survivors. Bessel is a pioneer in the treatment of trauma, the single greatest untreated public health crisis globally. One cannot seriously be a compassionate adult without understanding and being sensitive to the realities of trauma. Many of friends and coworkers are overwhelmingly likely to be survivors (as might you or your partner be). This is required reading by every adult.
The Lean Startup by Eric Ries
This is the first book any aspiring entrepreneur or innovator must read. You must then reread it periodically throughout your entrepreneurship journey, as the book will have a different resonance at each stage of your company, especially in times of stress. The Lean Startup created a tectonic shift in how Silicon Valley views the science of building startups. Like many transformative books, it has created venomous backlash, mostly from those who have failed to read it and thrash their own caricatures of what they think the Lean Startup methodology means.
Shortcut Your Startup by the Reum brothers
Successful entrepreneurs should follow fundamentals in building their businesses, but all to many confuse HBO’s Silicon Valley with reality. Shortcut Your Startup is your antidote. One of the reasons why this gem stands out is that it focuses on examples of innovation and entrepreneurship in non-technical fields and non-Silicon Valley-style startups, proving that high growth enterprises span the world of business. Learn how to spot your unfair advantage, how to “hang around the rim,” how to listen to customers, how to build a team, how to scale responsibly with leverage, and how to focus on data and financial fundamentals. Just good common sense and fundamentals here.
I have given this book to so many CEOs. I even once sent a box with dozen copies to a company in Indonesia to help them reframe their marketing and sales strategy. The book is part about the power law that encompasses all of nature and science — where 20% constitute 80% of the value of everything (pseudoscience) — part application of power the law to sales and marketing (absolute genius). Want to work half as hard, make more, and have customers chase you? Learn how to prime sales, focus on the highest value customers, test sales strategies, see what is hidden in plain sight, and “rack the shotgun.”
The Startup Way by Eric Ries
Yes, Eric Ries appears again. The Startup Way tells of lessons learned applying Lean Startup principles in behemoth, traditional corporate environments, like GE. Can one really apply Lean software-inspired methodology to multi-million dollar turbines? (Yes!) I actually like this book better than The Lean Startup and describe them as The Godfather Part I and Part II, one long movie broken up as sequels. Your Lean education is incomplete without this book. Fun fact: Eric reads the audiobooks so wonderfully, download both for your next long drive.