As we close out 2015, most of us will come up with some type of New Year's resolution. One of the most common resolutions is to improve your finances. You might want to set a goal to save more, max out a retirement account or boost your earnings next year.
Whatever your financial resolution may be, you'll need the right information and education in order to achieve it. We compiled a list of books that helped shape our financial foundations. These books can play an important role in motivating you to dream, plan, build financial independence and make solid decisions in 2016.
Financial Basics and Motivation
"The Millionaire Next Door: The Surprising Secrets of America's Wealthy" by Thomas Stanley and William Danko. This book is a barometer for good financial decision-making. Everything you ever wanted to know about millionaires is covered in this book. For example, most millionaires are self-made, and the most common automobile that millionaires drive is a Ford F-150. This book outlines how to follow the road to real wealth, and it's typically not through ostentatious spending or the lucky few who receive inheritances.
This book provides an educational, entertaining and data-intensive perspective into the behaviors and habits of financially effective people. While Stanley passed away in early 2015, his daughter, Sarah Fallaw, is continuing his work at the research firm Data Points and continues to expand his legacy.
"The Wealthy Barber: The Common Sense Guide to Successful Financial Planning" by David Chilton. If financial books always strike you as boring or too similar to school text books, then "The Wealthy Barber" is a good bridge to get you excited about learning financial concepts and decision-making. The book is structured as a story describing the plight of three different individuals in three distinctly different stages of life. This advice is timeless and especially good if you have younger family members that you want to nudge towards good financial management.
Making Good Financial Decisions
"The Truth About Money" by Ric Edelman. This book takes you to the deep end of financial planning, but Edelman does it in a light-hearted way with illustrations and jokes. This is one of those books that will become an encyclopedia for you and your family that you will continually reference as you have a specific question or area of finance you want to read up on.
Berkshire Hathaway's Letter to Shareholders by Warren Buffett and Charlie Munger. We recognize that this isn't a book, but regardless, you should plan to read this each March. Until then, you can dive into previous annual letters that date back to 1977. Buffett and Munger do an incredible job of sharing economic and financial concepts in a folksy and easy to understand manner. If you've ever heard someone brag or share a Warren Buffett financial truth, it likely came from a past shareholder letter.
Books to Make You Better at Life
"How to Win Friends and Influence People" by Dale Carnegie. This book was originally written in 1936, and it's still considered a must-read by anyone who needs to interact with other human beings. This advice is timeless and as relevant today as it was when it was originally published. The book walks you through understanding universal aspects of human behavior and how to use that skill set to better communicate and develop relationships. This book not only helps you build a skill set that is beneficial for your career, but also serves as a guide to more successfully navigate all of your relationships, both personal and professional.
"Outliers: The Story of Success" by Malcolm Gladwell. Have you ever considered how the decade in which you were born impacted your life and success? Gladwell has not only thought about it, but he has compiled the data on this and many other factors that seem to help support success. He then shares his findings via principles that can make you more successful in your own life. The biggest takeaway from "Outliers" is understanding how expert status is achieved by performing the same activity over and over again until reaching 10,000 hours. This book is both interesting and entertaining, with ideas and theories illustrated through case studies that include The Beatles and Bill Gates.
As 2015 comes to a close, many of us will reflect upon the past year and set goals for the year ahead. This is the perfect time to pick up a financial book to either reinforce the financial decisions you've been making or alter how you make financial decisions in the future. They may also provide you with the tools to impact how those around you make financial decisions. At the very least, a classic financial book could make the perfect stocking stuffer.
Brian Preston and Bo Hanson are fee-only financial planners who host the podcast, "The Money-Guy Show".
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