Money conscious readers from all generations should brush up on their personal finance knowledge by adding some books on the subject to their summer reading list. Given that only 24% of Millennials are able to correctly answer four or five questions on five-questionfinancial literacy quiz, they should especially make an extra effort to pick up personal finance books more often.
Here are eight classic personal finance books that are still worth reading.
1. Rich Dad, Poor Dad
In 1999, personal finance author, Robert Kiyosaki self-published Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!, which eventually became a New York Times bestseller. The central premise of his book is the comparison between his biological father, a hard-working yet financially struggling individual, and his best friend's father, a rich man with a series of savvy investments.
One of the main takeaways of Rich Dad, Poor Dad is the importance of developing entrepreneurship and financial aptitude to become financially independent. To achieve great wealth, Robert argues that you should look for passive and portfolio income instead of a traditional salary.
2. You've Earned It, Don't Lose It
Before her long string of bestsellers, such as The Money Book for the Young, Fabulous & Broke, Suze Orman started it all with You've Earned It, Don't Lose It: Mistakes You Can't Afford to Make When You Retire, first published in 1995.
The main appeal of Orman's first book is the simplicity of her eight-step process to successful retirement. For example, in step two, Orman discusses how to plan for early retirement while avoiding penalties for withdrawals. For each one of her steps she provides specific instructions and resources for more information. (See also: The 5 Best Pieces of Financial Wisdom From Suze Orman)
3. The Wealthy Barber
Published in 1989, The Wealthy Barber: Everyone's Commonsense Guide to Becoming Financially Independent provides down-to-earth financial planning with a large dose of humor via Roy the barber, a fictional character created by the book's author David Chilton.
The Wealthy Barber teaches you good personal financial habits, such as paying off credit card balances every month and building an emergency fund with unexpected windfalls, that never go out of style. David stresses that you should be wary of get-rich-quick schemes and, instead, focus on long-term wealth building strategies.
4. Think and Grow Rich
Known as the "Granddaddy of All Motivational Literature," Napoleon Hill was trying to figure "What makes a winner?" back in 1937. He found the answer by interviewing a long list of well-known successful and wealthy individuals, such as Henry Ford, Thomas Edison, John D. Rockefeller, and Charles M. Schwab, and putting it all together in Think and Grow Rich.
Based on his research, Napoleon put together the timeless Thirteen Steps to Riches philosophy on individual achievement. Think and Grow Rich doubles as great motivational book for aspiring entrepreneurs. "You are the master of your destiny. You can influence, direct and control your own environment. You can make your life what you want it to be," encourages Napoleon.
5. The Richest Man in Babylon
Now here is a blast a from the past: George Clason's 1926 classic on personal finance, The Richest Man in Babylon uses parables set in ancient Babylon to teach modern investors a thing or two about their finances.
Several of George's lessons have been adapted by current financial advisors and investors. For example, The Richest Man in Babylon's "Start thy purse to fattening" has been adapted to "pay yourself first" by Warren Buffett. Both the Oracle of Omaha and George Clason agree in that you don't save what is left after spending, you spend what is left after saving.
6. How to Win Friends & Influence People
Since 1936, Dale Carnegie's classic has been passed on from generation to generation. My wife received this book from one of her architecture mentors, as did I from one of my business professors in college.
More and more employers are looking not only for great academic or professional credentials but also for good personality traits. Professionalism, high-energy, and confidence are the top three personal traits employers hire most. How to Win Friends & Influence People provides you useful techniques to develop these and other personal traits that make you more appealing to potential employers.
7. The Intelligent Investor
Warren Buffett is very public about his admiration for Benjamin Graham's The Intelligent Investor: The Definitive Book on Value Investing. Since its original publication in 1949, The Intelligent Investor has been a bible for value investors, who believe that "Mr. Market is your servant, not your master."
Be aware that Benjamin's classic doesn't provide techniques to pick "hot stocks," instead it teaches you how to use discipline, research, and analytical ability to make sound investments in bargains relative to current asset value. This is a must-read for any investor regardless of their level expertise. You can take Mr. Buffett's word for it — he says it's "by far the best book on investing ever written."
8. Beating the Street
There are very few investors that can give Warren Buffett a run for his money. One of them is the legendary ex-manager of Fidelity's Magellan Fund, Peter Lynch. (See also: 5 Investors With Better Returns Than Warren Buffett)
What makes Peter Lynch a great investor is not only his ability to run a large actively managed fund but also his talent to provide great investment advice in layman's terms. In 1993's Beating The Street, Peter penned some of the most famous investment mantras, including "Never invest in any idea you can't illustrate with a crayon" and "Gentlemen who prefer bonds don't know what they're missing."