Best Personal Finance Books

Best Personal Finance Books: Financial Independence Early Retirement

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The Financial Independence Early Retirement (FIRE) movement has been gaining steam in recent years, with significant coverage by mainstream media. The movement is increasingly inspiring individuals who are dissatisfied with the quintessential American dream or its equivalent across the globe.

To this group, the idea of working +40 years only to retire on social security isn’t at all appealing. Many, like us would much prefer to have the freedom in our day to explore nature, create things, travel the world, or give back to the community.

Broadly speaking, we are minimalists at heart. That is, we value experiences over things and given the choice we will find ways were we can spend less or no money to achieve the same purpose.

Before we get started, you may prefer to get an offline PDF copy of this page for future reference. If so, you can do that below:

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How this post is organized

This post will be appended with additional recommendations, as more books are published. The list is ordered based on on the average of the below ratings:

  • Recommendation frequency across the FIRE community
  • Amazon’s five star rating system
  • My assessment of applicability to the FIRE community

Click the links below to jump straight to a review

As of today, we have 35 books that we intend to add to this post so if you are interested in consuming the best of the FIRE community, be sure to bookmark or pin this post! When complete, we will have books across the below categories:

Recommended By Physician on FIRE
Remaining 35 reviews pending; Scroll to view full list
Recommended By Grant Sabatier
Remaining 35 reviews pending; Scroll to view full list
Recommended By Early Retirement Extreme
Remaining 35 reviews pending; Scroll to view full list

1. The Simple Path to Wealth by J.L. Collins

Overall rating: 4.9⭐

The premise

The core message of this book is stay away from debt, save and invest more than HALF of your income in low cost index funds. This advice flies directly in the face of mainstream investing advice that would have you in and out of the market at the whims of the various talking heads!

Readers are advised of the perils of complex investing schemes or expecting that you can beat the market. Instead, the author steers you towards a DIY investing approach involving low cost index funds.

Furthermore, the author explains in very simple terms why investors should avoid even looking at the market fluctuations. The simple fact is in the +200 year history of the stock market, it has always gone up. He expands on the benefits of the ups and down of market. They one of the primary engines of growth in your portfolio! You should not be afraid of them, but welcome the crashes and dips with open arms!

It is quite unfortunate that our society does a very poor job of equipping our children with financial acumen. We grow up believing that investing is complicated and that you need an advisor and lots of money to consider it. That couldn’t be farther from the truth. The truth is DIY investing is the way you want to go and investing with advisors can significantly erode your growth due to fees and transaction costs.

The simple path to wealth is get your savings rate WAY UP. The higher and earlier you do this the faster you reach financial freedom. Those that see the long term benefits of reaching financial independence, should not view the act of reducing expenses to very low levels as sacrifice.

“If you decide to pursue financial freedom you are going to have to choose to spend your money on investments. Somehow in our culture this has come to be seen by most people as deprivation. That has never made much sense to me. Personally, there is nothing I’d rather buy or own than F-You money. With it, the world’s possibilities are endless and you are faced with the delicious decision as to what to do with your freedom. The only limits are your imagination and your fears.”

Interesting elements

If you’re the type who doesn’t typically get into the numbers, this book is for you because it is written in a manner that is extremely approachable. All the concepts can be grasped by non-financial persons. In fact, the book was borne out some blog posts that JL Collins wrote for his teenage daughter, hoping she would grow to make wise financial decision.

The pursuit of financial independence comes from a different a completely different mindset as compared with our consumer culture. Adherents primarily value experiences over things. A point, well-illustrated by the many interesting stories and parables:

“Two close boyhood friends grow up and go their separate ways. One becomes a humble monk, the other a rich and powerful minister to the king. Years later they meet. As they catch up, the portly minister (in his fine robes) takes pity on the thin and shabby monk. Seeking to help, he says: “You know, if you could learn to cater to the king you wouldn’t have to live on rice and beans.” To which the monk replies: “If you could learn to live on rice and beans you wouldn’t have to cater to the king.”

You have to choose, what will occupy your time. What will be it be? Your life your or you money?

Praise & critique

In contrast to many financial books, this one is written in a very conversational manner. He speaks as if he’s talking to a friend throughout the book in a question and answer sort of style.

This is a Financial Independence Retire Early (FIRE) book through and through. I mean, he advocates for a greater than 50% savings rate. You won’t see that anywhere else in any other financial community!

He very neatly dispels the notion that investing is boring, complicated or for the rich. He does so in a way that easy, accessible, interesting and compelling.

Final thoughts

If you have been wanting to get started on early retirement journey but have been sitting on the sidelines due to all the financial jargon out there. Get this book!

2. Your Money or Your Life by Vicki Robin

Overall rating: 4.8⭐

The premise

Your Money or your Life (YMOYL) at its core, is focused on developing a deeper sense of the tradeoffs you make of your time and energy for money.

“The bottom line is that we think we work to pay the bills — but we spend more than we make on more than we need, which sends us back to work to get the money to spend to get more stuff!”

The book transcends the typical topics of saving and spending and covers deeper topics concerning the connection between your money, relationships, communities, and the world.

Other financial books tend to separate the people from the financial matters, preferring instead to focus on the more objective mathematical or finance sides of the equation.

In contrast, YMOYL speaks to your journey through FINANCIAL INTELLIGENCE, FINANCIAL INTEGRITY, and ultimately to FINANCIAL INDEPENDENCE.

The author shares their NINE STEPS to create a new financial roadmap. We share THREE of them below:

1. Making peace with your past

Amazingly, this step calls for you to tally all the money you have made in your working lifetime! It provides a few methods for accomplishing this, including a ninja method… contact the social security administration for their records! This, opposed to tabulating tax records or adding up paystubs..

With this number figure in hand, readers create a sobering picture of their total income vs total assets. This is a complete picture and culmination of the choices you have made over the years.

2. Track your life energy

Next, you develop an accurate picture of the trade of your “life energy” for money. You will do this by creating a ratio between the money you have coming in, less the money you spend getting to work, and the total time you spend working and preparing to work.

This is another eye-opening number, especially for high wage earners who are working day and night!

3. Where is it all going

This isn’t about budgeting, but about tabulating your expenses so you create balance between your incomes and expenses.

This provides a clear picture of your current lifestyle that will serve as a building block for the rest of the material.

You can see that each step builds on the one before it to help you develop a holistic picture of your interactions with money and the life choices you have made in recent past.

Interesting elements

The first part of the book will push your paradigms, helping you to bring a number of things in your financial and personal life into focus.

Vicki argues that, while we believe we are making a living, we are actually “making a dying.” This is because the act of spending our time & energy in the form of money drains us of the precious little time we have on earth.

If you have struggled in any way getting on the same page with your spouse on money, this may be the book for you. Many readers report that applying these concepts has been transformational for their marriage!

If you have any unhealthy or guilty feelings about money, this book may help you get your thinking re-centered. Similarly, if you feel you are aimlessness or have a lack of direction with regards to money, this book can help you find the areas of focus and value in your life.

Praise & critiques

YMOYL is unequivocally the most highly recommended book in the Financial Independence, Retire Early community.

Given the genre, you might expect this book will provide more specific guidance with regards to increasing your income, making investments, or money management. However, this book is expressly about your relationship with money and how you can fulfill your purpose with money.

The ninth step entitled ‘managing your finances’ is a little weak. I feel they could have gone a little deeper than the basics of investing. As with the rest of the book, it is fairly philosophical and does not get into the tactics of money management.

That said, what I love is this book is written by real practitioners of early retirement and consequently, the principles are well laid out and tested with real life experiences.

Final thoughts

If you are looking for a truly unique, thought provoking, and paradigm shifting view on money, you should definitely pick up a copy of Your Money or Your Life!

3. The Total Money Makeover by Dave Ramsey

Overall rating: 4.7⭐

The premise

I believe the Total Money Makeover is the very first book on personal finance that I ever read. It is one of the most popular personal finance books ever written, with +5 million copies sold. Every year, more than 400,000 readers pick up a copy of this book!

Dave’s goal is to completely change your mind set on leveraging debt to achieve “financial success.” He shares a personal story of achieving millionaire status through real estate only to have it all ripped away from him when the banks called his notes.

In his mind, there is no “good debt.” All debt including cars, mortgages, student loans, credit cards, home equity lines and more are chains that are holding you back from building wealth. “Debt is dumb, cash is king!”

Perhaps secondary to the messaging around debt, is Dave’s easy to follow advice on investing. He very wisely points out that anyone, regardless of income should be able to retire a millionaire. Simply invest $100 per month at a 12% rate of return and in 40 years you will have $1M dollars. If, instead you want to be a two millionaire, then invest $200/mo!

Quite distinct from other financial books, this book is not simply a collection of tips. Instead, it is a complete step by step guide that addresses both the financial and psychological changes that should be made to achieve success. His foundational content are the Seven Baby Steps:

  • Baby Step 1: Save $1,000 for your starter emergency fund.
  • Baby Step 2: Pay off all debt (except the house) using debt snowball.
  • Baby Step 3: Save 3-6 months of expenses in a fully funded emergency fund.
  • Baby Step 4: Invest 15% of your household income in retirement.
  • Baby Step 5: Save for your children’s college fund.
  • Baby Step 6: Pay off your home early.
  • Baby Step 7: Build wealth and give.

Interesting elements

Dave focuses heavily on the behavioral elements of personal finance, as he puts it “Personal finance is 80% perspiration and only 20% inspiration.”

He recognizes personal finance in marriages can be a challenging endeavor! He helps to personify those challenges in characters he calls “the nerd” and the “free spirit.” Each have a very different way of interacting with money, and he makes room for their participation and collaboration in the personal finance process.

He is well known for quite a number of very sticky sayings such as “Live like no one else so later you can LIVE like no one else.” And the “paid off mortgage has taken place of the BMW as the status symbol of choice!”

Mr. Ramsey covers every area of financial planning, from budgets, to insurance, investments, and estate planning. He breaks all of these concepts down so that they are explained simply and easily to those with no financial background.

Praise & critiques

I am completely biased towards Dave Ramsey’s philosophies has following them helped me move from a -$130,000 net worth to more than +$1M. In doing so, we paid of +$200,000 in debt in under 7 years, funded our children’s college fund, grew our investments, and paid off our mortgage.

That said, I have two critiques now that I’m several years graduated from his program:

  1. Dave advocates a long term wealth building strategy. In baby step 4 he advises his followers to “invest 15% of [their] household income in retirement”. In this step, he describes the millions of dollars that can be saved in 30-40 years of investing at this level. In baby step 6, he advises his followers to “build wealth and give.” One of the very magical things that occurs after you have followed his steps to a tee is your expenses are so low and your savings rate so high that you do not need to work for 30-40 years! In fact, many Financial Independence, Retire Early followers were former Financial Peace University (his financial course) graduates.
  2. The second critique is his stance on credit cards. He makes a very strong argument that people should stay away from credit cards. There are countless valid reasons for this and this advice holds true for the vast majority of people. That said, those who are financially disciplined (such as Financial Peace graduates) are missing out on things like travel credit card rewards. See our post that describes our approach to build our credit score, after Dave Ramsey and earning $15k in travel through travel rewards.

Final thoughts

There is no-one better on the planet who can help you get out of debt, and in doing, so achieve a very high savings rate. His course was so transformational for me that I taught his Financial Peace University course at my church for seven years!

That said, I highly recommend you get the home study course or the Total Money Makeover book! His last course refresh was in 2012:

4. The Millionaire Next Door by Thomas J. Stanley and William D. Danko

Overall rating: 4.7⭐

The premise

The Millionaire Next Door is a book that exposes the SURPRISING behaviors and mindsets of Millionaires.

The book is based on a broad study, which details the life choices across three groups that the author labels as “Under Accumulators of Wealth (UAW),” “Average Accumulators of Wealth (AAW),” and “Prodigious Accumulators of Wealth (PAW).”

The research makes a compelling case that the SIMPLE path to becoming a millionaire is saving more than you spend and mitigating financial mistakes.

The author defines 7 BEHAVIORS OF MILLIONAIRES; I have paraphrased THREE of the behaviors below:

1. Living well below their means

As I am sure you have experienced, people’s money habits tend to be a direct reflection of the things the value. Those value systems are a reflection of our upbringing, families and knowledge base.

Not surprisingly, the authors found that “UAWs spend tomorrow’s cash today”

In contrast, “PAWs save today’s cash for tomorrow.”

As the book, and the underlying research points out, the path to wealth is not rocket science.

Simple path to wealth is in saving far more than you spend!

What is surprising, about millionaires is the fact that:

2. They are not concerned with social status

If you have not been exposed to truths behind the millionaire lifestyle, you will be SHOCKED to learn how the typical millionaire lives.

In contrast to the rest of society, they are not driven by the pursuit of a higher social status than their parents, neighbors, or friends.

They understand the opportunity costs with living a consumer lifestyle, and they believe that wealth or financial independence is more valuable than displaying high social status.

3. They allocate their time and energy to building wealth

You have heard it said that the average millionaire reads a book a month.

In addition, those that reach millionaire status maintain an intense focus on efficient utilization of their time, energy and money.

This is true of my own journey to reach +$1M net worth status. Since marriage, my wife and I have been intensely focused on our goals to get out of debt, build a rental real estate portfolio, and achieve early retirement.

Interesting elements

This book represents one of the largest studies that has been conducted on the lives and habits of millionaires

The book will tell you how you can join the more than 55% self-made millionaires by applying simple personal finance principles.

The research study highlights several COUNTER INTUITIVE truths about income and its relationship to wealth.

In addition to the positive money habits, the book offers analysis of UAWs and the patterns and habits you should absolutely avoid.

The author provides a SIMPLE FORMULA based on your age and your pre-tax income, which can be used to determine if you are on track to become a PAW.

Praise & critiques

The book provides a simple mathematical wealth formula that can be used to determine if you are on track.

My only criticism is that the formula doesn’t work for early income earners due to age, income ratios and limited time to experience investment growth.

The second, isn’t so much a criticism but a recognition the book isn’t explicitly a Financial Independence Retire Early (FIRE) book

That said, the advice and findings correlate extremely well to those that are commonly shared within the FIRE community.

Final thoughts

Despite the above critiques, I highly recommend this book as it helps dispel common myths that exist in our culture. It uses data to factor out the common ideals, behaviors, and results that causal to reaching millionaire status!

As Dave Ramsey so eloquently says

If you want to be rich people, do rich people stuff…

5. The Four Hour Work Week by Tim Ferris

Overall rating: 4.7⭐

The premise

The 4 hour work week has sold millions of copies since it was released in 2007. In fact, it was on the NY Times for more than a year straight! At its core, the book provides a step by step guide to escape the 9-5 by building a business around your ideal lifestyle.

In the book, he defines the “new rich” which live the millionaire lifestyle without having the requisite $1M in the bank. They do this by creating business that generate cashflow and by developing systems and processes that enable them to work from anywhere (location independence).

Tim’s approach was first borne out of frustration with working for someone else, then by frustration working 80 hours for a small business he created. He then went about the task of automating, eliminating, and delegating the mundane aspects of his business so that he didn’t need to work in the business on a daily basis.

With that success, he took some time off and decided to write his manifesto, The 4 Hour Workweek!

There are a few key takeaways from this book:

  1. Focus on the 80/20 Pareto principle that states 80% of the value will come form 20% of your actions. That means focus your energy on the few key things that generate the most value for you.
  2. Test your business ideas before you build them. He shares several examples of “launching a product” to see if anyone clicks through to the payment page with intent to buy. Though he does not have a product, he has proven people want it. With that validation it’s worth spending the time to build.
  3. Charge a premium for your services. Don’t go for high volume low margin sales. Position your product as premium and make the big sales that are more worth your time and effort.

The book is divided into four sections:

Section 1: D is for Definition

In this section, he walks you through the process of redefining you dream and making it actionable. Your existing dream of earning the 30 year watch and the occasional pat on the back is is no longer sufficient!

Section 2: E is for Elimination

This is about maximizing your time, with focus on the 80/20 principles mentioned above. Ruthless focus on eliminating non value added work from your day. He teaches you to avoid multi-tasking and the power of focus.

Section 3: A is for Automation

The goal here is for you to extract yourself from your business by automating and outsourcing your tasks. Of course you start by doing them so you know how it should be done.

As you do though, you should be documenting your steps and creating processes. Automate steps that can be automated. For everything else, focus on outsourcing to Virtual Assistants for $4-15/hr.

Section 4: L is for Liberation

Here, he provides you with a step by step approach to achieving location independence at your current employer. I won’t spoil it, you need to just scroll to the bottom of this review and order this book!

Interesting elements

This isn’t a book about theory, Tim teaches you step by step how you can identify a niche market and how you can build an online business that is fully automated to serve that market.

Tim defines a new social class… the “New Rich” that live lifestyles of the rich and famous, but do so by having cash flow rather than millions in the bank!

He shares several tips for managing your everyday life that you never even considered, like having a Virtual Assistant in the Philippines to schedule appointments for you, call your utility company for you, and even completing some of the low value work at your 9-5!

The book is jam packed with lifestyle and productivity tips such as how to double your reading speed in 10 min, take advantage of geo-arbitrage, and how to be more productive with things like email.

Praise & critiques

My only critique is his aspiration for building fully automate businesses is not as easy as it seams, and may not be possible for all business ideas. That said, if you set this as a goal and focus on identifying businesses that can be fully automated I don’t see why this can’t be achieved!

This book is NOT theoretical, it’s chock full of step by step and actionable tips and strategies that were developed through Tim’s personal experience.

Final thoughts

Just get the book! It’s one of my all-time favorites and it’s perfect for setting mindset and providing practical tools to create a profitable side hustle.

6. The Intelligent Investor by Benjamin Graham

Overall rating: 4.6⭐

The premise

The Intelligent Investor encourages a long term mindset when it comes to investing in the stock market. Like the simple path to wealth, Benjamin Graham advises investors to avoid watching the market. The core philosophy is studying individual stocks and identifying those that have sound fundamentals, and that are undervalued.

Let me paraphrase the three primary lessons in this book:

1. Guard against losses and financial risk

Do this by focusing on picking long term stocks that have sound fundamentals and that will always be required by society to grow and thrive. Protect against loss by speeding investment eggs across multiple baskets.
Graham has two very important rules for investing:

1. Never lose money
2. Don’t forget rule number one!

Furthermore, Graham guides you to search the market for stocks that have intrinsic value and that are undervalued in the market. You will learn how to read balance sheets and cash flow statements so you are able to quantitatively evaluate business performance. That way, you are prepared to make business like decisions in purchasing each stock.

2. The market is erratic

To succeed at investing, you have to understand that the market fluctuates. Despite popular sentiment on investing, you cannot time the market. Furthermore, you should not time the market as you will miss out on the gains that occurred while you were waiting.

In addition, Graham councils the reader that he should not even pay attention to the swings in the market. Those that lose, tend to react the market which prompts them to pull out when the market is down and buy when the market is high which precisely the wrong move!

3. Strictly adhere to a tried and true formula for investing

Graham teaches a single, tried and true method for stock investing. He advocates sticking with your investment formula and not deviate. Hard to argue as this is the very approach that Warren Buffet used to make his billions!

Interesting elements

Warren Buffett was an employee and student of Grahams, and is widely known to have said The Intelligent Investor is the best book on stock investing ever written! He is widely known as the grandfather and the most influential voice in the value investing community.

The typical investor is encouraged by the media and many gurus out there to get in and out of the markets in hope to generate outsized returns. This type of investor is considered an enterprising investor. In contrast, Graham’s methodology would be considered a defensive investing strategy which focuses on the long term.

This book deals with fairly complex financial concepts, yet the author does a nice job boiling them down into digestible concepts.

Praise & critiques

The methods taught in this book are not mainstream FIRE (if there is such a thing), which typically teaches investing in low cost mutual funds i.e. VTSAX from Vanguard. That said, before I decided on real estate I read this book and was highly focused on this as an investment strategy. His arguments resonate quite well with me.

Market fundamentals have changed since this book was authored. 25 years after the book was authored, the first index funds were available. Having read his arguments, I believe Graham would be an advocate of index funds. In fact Warren Buffet, his protégé said:

“A low-cost fund is the most sensible equity investment for the great majority of investors. My mentor, Ben Graham, took this position many years ago, and everything I have seen since convinces me of its truth.” (To John Bogle, in The Little Book of Common Sense Investing)

Intelligent Investor is more of the WHAT to do with regards to choosing value stocks. His follow on book, Security Analysis is more of the HOW. Even so, these books will not turn you into Warren Buffet. There are still areas that are left up for interpretation and that require your own discernment.

Final thoughts

Bottom line, if you are the type who believes in investing in stocks, and would like to pick individual stocks this book is for you as it provides an objective means for identifying stocks as you would evaluate a business. This, as opposed to doing this on an emotional or semi-logical basis such as “I have an iPhone and it’s a great product that is here to stay so I’m going to buy Apple stock!”

7. Early Retirement Extreme by Jacob Lund Fisker

Overall rating: 4.6⭐

The premise

Early Retirement Extreme is written by one of the godfathers of Financial Independence! Jacob was blogging on early retirement LONG before it was a search, trending in Google! I first ran across Jacob’s blog Early Retirement Extreme when searching for early retirement several years ago.

“This book provides a robust strategy that makes it possible to stop working for money in less than a decade. It provides a shift in economic perspective from consuming to producing.”

The author shares a simple illustration to help drive this point home. If you save a mere 10% of your income, you would need to work for nine years to have enough money to live one year without income. If, instead you save 90% you only need work one year to live nine years.

Jacob advises getting your savings and investment rates WAY UP and your expenses WAY DOWN. Mathematically speaking, if you can get your savings rate up to 75% you can achieve early retirement in just five years, saving 25x your annual expenses over that time. Jacob writes:

“It’s possible to live on a third or even a quarter of the median income, putting one solidly below the government defined poverty line, without living in austerity and eating grits.”

While the first half of the book establishes a philosophical structure, he applies his experience achieving early retirement at 33, taking his theories to practice.

Interesting elements

Jacob, himself retired at age 33 living on $7-10k per year. He was able to achieve this extreme lifestyle with low cost living arrangement, growing his own food and by doing vs buying.

He argues that by purchasing things that help simplify your life, are depriving yourself of the opportunity to learn valuable skills. Having a diverse set of skills would come in handy in an economic collapse or if you need to pick up some additional income.

Throughout the book, you’ll find many undertones of minimalism and having a light footprint of consumption and waste.

For instance, he shares that most people might buy a mixer to mix dough. A renaissance man, however might look at this problem a different way. If you are not a professional baker but mix dough every day, perhaps lower cost option such as a hand mixer might be more appropriate. If instead, you do this less than daily, you should be able to get away with a whisk. If less than once per month, then rubber banding two forks together should be fine!

He explains that by purchasing devices, not only are you spending more money than may be necessary but you’re robbing yourself the opportunity to develop you strength and the skills necessary to DIY.

Praise & critiques

Jacob’s pre-retirement career was in theoretical physics. It shows, as much of his book feels like a scientific treatise on personal finance! It is highly technical and can be difficult to read through in one pass.

Last I’ll say the book isn’t very polished and you’ll have to slog through some of the repetitive / overly philosophical bits. If you can manage through these critiques, I would encourage you to pick up a copy.

Final thoughts

In this book, you will find a highly unique approach to personal finance that will re-shape your perspectives with regards to your expenditures, and consumption vs minimalism, the practical realities of an extreme early retirement.

8. The Automatic Millionaire by David Bach

Overall rating: 4.5⭐

The premise

For this review, I want to start with the two opening paragraphs of the book:

“What if I told you that in just an hour or two I could share with you a system that would slowly but surely transform you into a millionaire?”

“What if I told you it was a proven system that you could set up in just an hour or two that would require no budget, no discipline, less than ten dollars a day of investment, and could be done over the phone or online, from the comfort of your home?”

This, from an author with nearly ten books that have made the New York Times best sellers list and that has sold more than 7 Million books.

In his step-wise approach to automated investing he teaches you step by step how you can systematically build wealth with no fixed investment ratios or other sophisticated investment schemes.

In this book, there are three primary lessons which includes:

  1. Save a little every day – He coins the phrase the “Latte Factor,” which points out that by skipping out on a Latte a day, you could retire a millionaire through the magic of compound growth overtime. This concept of skipping out on a daily coffee to build wealth has made it into mainstream personal finance vernacular.
  2. Pay yourself first – He advocates automating the step of saving and investing a percentage of your income even before you pay your bills. This, as opposed to paying your bills, taxes, spending discretionary money, and other obligations and then saving what happens to be left over at the end of the month. He advises use of the pretax fund at work, reducing the amount that makes it home
  3. Automatic payments enforce discipline – Several chapters are devoted to this topic, and in each he covers recommendations to automate savings, payoff of credit cards and debt, investing, and building an emergency fund. It’s best that the money never hit your bank account, but that it is automatically allocated to each of these goals in a ratable fashion.

Interesting elements

First off, it’s hard to get more interesting than the title. I mean, if books had click bait this would be it. As a serial life optimizer it appeals to the inner recesses of my soul J.

What is brilliant about this book is it really speaks to the masses in that there are very few in our society that are able to maintain a state of discipline indefinitely. Setting up these systems puts your savings and investment goals on autopilot which is not subject to your mood, your memory or your willpower.

This book motivates a very simple tactic, if you can automate your goals, you can become and automatic millionaire!

Praise & critiques

I personally do a high degree of automation in my investing so I identify with most of the concepts presented in this book. That said, there are few areas that I do not agree with:

In the book he advocates automating twice monthly mortgage payments to sneak in extra payments per year that will pay your mortgage off sooner. This can be a BAD idea if your mortgage charges you for such a program. Be sure to check first. Perhaps better to make your regular monthly payment and automate an extra payment each month, over and above your mortgage payment.

He suggests taking a 100% loan as a means to accelerate your financial journey… There are really no scenarios where I think this is a wise approach. Furthermore he makes blanket assertions that owning is better than renting. In general, that may be true but not the case in all scenarios.

His automation scenarios allocate money to various savings and investing goals. I think it is important to see that you can set these systems up to cover multiple areas of your budget simultaneously. That said, I would not advise spreading yourself thin and prolonging your goal attainment. For instance, if you believe it is important to have an emergency fund I would advise that you focus on this as a savings goal vs sending an allocation of your overall savings amount to an emergency fund.

Final thoughts

While heavily recommended within the FI community, I wouldn’t call this a financial independence book. The savings rates that are recommended are more suitable for mainstream personal finance.

The concepts of automation, however are sound advice for anyone pursuing long term wealth.

This book is a really good first book for aspiring investors to help show the potential of consistent action in the market and to provide a path forward for those that may be struggling with taking consistent steps in the right direction.

9. Rich Dad Poor Dad by Robert Kiyosaki

Overall rating: 4.4⭐

The premise

Rich Dad Poor Dad is one of the most widely recommended books across all personal finance communities. The reason is, it does a nice job of motivating a mindset shift from working for money to building wealth through pursuit of income generating assets.

The story line is fun and engaging and has the feel of a good non-fiction. This is a welcome change for those who are not real big on the numbers side of personal finance.

The book is written in parable form and is allegedly about Robert Kiyosaki’s childhood, having received very different perspectives on finances from his “two dads.” Note, there is quite a lot of controversy on the validity of this story as it is portrayed as a non-fictional account.

In either event, the story is about Robert’s life and financial lessons he learned from his real father (“poor dad”) and the entrepreneurial mindset that was nurtured by the father (“rich dad”) of a close friend.

As the story progresses you learn of the huge money mistakes his father makes. In contrast, his rich dad who owns multiple businesses, helps him internalize the idea that rich people make money work for them, not the other way around.

The author presents the following six, lessons:

  • Lesson 1: The Rich Don’t Work for Money
  • Lesson 2: Why Teach Financial Literacy?
  • Lesson 3: Mind Your Own Business
  • Lesson 4: The History of Taxes and the Power of Corporations
  • Lesson 5: The Rich Invent Money
  • Lesson 6: Work to Learn—Don’t Work for Money

In these lessons he redefines “an asset [as] something that puts money in [your] pocket. A liability is something that takes money out of [your] pocket.” …“Rich people acquire assets. The poor and middle class acquire liabilities, but they think they are assets [cars, electronics, clothing, furniture].”

Robert shares his perspective that “people’s lives are forever controlled by two emotions: fear and greed.” It’s these two emotions that drive people to slave away at jobs they do not love to afford overindulgence on things they do not need.

In contrast, his rich dad lives in a modest home and drives a cheap car, despite owning considerable assets. The right way to pay for toys (liabilities) is to purchase assets that generate sufficient cash flow to pay for the toy.

Interesting elements

This story is told from Robert’s perspective as he learns from his rich dad. Rather than just give him the advice, Rich Dad asks open ended questions and puts him in situations that inspire him to think and experience these life lessons first hand. As you read, you feel as though you are along for the journey with him so you are incented to keep reading and uncover the mystery.

In its very fun way, the book motivates you to start thinking like an entrepreneur. He paints poor dad in such a poor light, that you as the reader have a tough time wanting to identify with his mindset, though it is likely the mindset you have before picking up the book. I read this book as I was transitioning from getting out of debt to considering real estate. As an aspiring entrepreneur, I found this book to be quite motivating.

Praise & critiques

There is very little actionable advice in this book and what financial advice does exist is inextricably intertwined with the storyline. Furthermore, there are entire sections of the book that provide very weak and intangible advice.

There are some parts of the story that many would say are made up such as the concepts of the rich “inventing money”. He shares an example of generating tens of thousands of dollars from a tax deal in just a few hours. The success stories he does share are somewhat vague and limited.

Final thoughts

Now, several years removed from reading this book I would recommend to those who are early their financial journey or who have limited-to-no exposure to passive income concepts. With that framing, the ideas presented in this book can be very helpful in opening your eyes to the merits of entrepreneurial pursuits.

The book is a fun read might be a good one to share with a reluctant spouse or someone who does not get energy from reading financial or other non-fiction texts.

10. The Bogleheads Guide to Investing by Taylor Larimore

11. Playing with FIRE by Scott Riekens

12. Financial Freedom by Grant Sabatier

13. Set for Life by Scott Trench

14. I Will Teach you to Be Rich by Ramit Sethi

15. Secrets of the Millionaire Mind by T Harv Eker

16. Think and Grow Rich by Napoleon Hill

17. The Richest Man in Babylon by George S. Clason

18. Work Less Live More by Robert Clyatt

19. How to Retire Early by Robert and Robin Charlton

20. The Little Book of Common Sense Investing by John Bogle

21. Meet the Frugalwoods by Elizabeth Willard Thames

22. Quit Like a Millionaire by Kristy Shen and Brice Leung

23. You Need A Budget by Jesse Mecham

24. Work Optional: Retire Early The Non-Penny-Pinching Way by Tanja Hester

25. How to Retire Happy, Wild and Free by Ernie Zelinksi

26. The Wealthy Barber by David Chilton

27. The Millionaire Mind by Stanley

28. Stop Acting Rich by Thomas Stanley

29. The Elements of Investing by Malkiel

30. The Only Investment Guide You’ll Ever Need by Andrew Tobias

31. The One-Page Financial Plan: A Simple Way to Be Smart About Your Money by Carl Richards

32. Common Sense on Mutual Funds by John Bogle

33. John Bogle on Investing by by John Bogle

34. Love and Respect by Emerson Eggerichs

35. The Life-Changing Magic of Tidying Up by Marie Kondo

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Mr and Mrs Life on FIRE have gone from a negative $130k net worth to over $1.5M. We have helped a number of our friends and family get on track with their finances. As we are in the final leg of our early retirement journey, we have launched this blog to share are our experiences more broadly. Currently, we are blogging anonymously but look forward to doing a big reveal late 2020!
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