Best personal finance books

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Want to learn how to use your salary wisely to invest for a secure future?  Not sure where to start with the overwhelming number of finance books available?

Good news, I think I’ve read most of them!

This article reviews the four I found most valuable.  As a bonus, 3 out of 4 are Australian.

Borrow these four books from your local library if you can.  They provide >90% of the knowledge you will ever need to secure your financial future.

Best Finance Book 1: Rich Dad Poor Dad* – Robert Kiyosaki.

Although one of the most frequently recommended finance books, this author comes with a truckload of controversy!  Multiple lawsuits and bankruptcies over the years although Robert Kiyosaki’s personal wealth remained sheltered.  Perhaps “Rich dad” really didn’t exist, and there may be more fiction than fact in the book.

It was my first finance book, as a resident.  It shocked me with some revelations, which I still value massively in my strategy today.

Powerful Lessons

“I don’t work for money.  Money works for me.” 

It seems odd that this hadn’t occurred to me.  But at the time, there was far no talk about passive income (that I can recall).  The realization that I could choose to spend money on liabilities (cars, holidays, clothes) or assets (real estate, businesses, shares).  This I realised, would define my financial future.  This concept had not really come up before.  I was brought with a traditional view of studying hard, getting a good job (tick) and money wouldn’t be an issue.  Obviously, even good earners need to manage their income effectively.  Although I was not ready to start investing in assets anytime soon, I am glad my main takeaway from this book was to minimise the liabilities I committed to.

You Can Change Your Tax Rate

This was also the time I realised that employees are taxed higher than anybody else.  It seems crazy, but you are actually penalised by earning money through personal effort.  Business and investment income taxation is significantly discounted.  The government want the economy to grow – and businesses and investments help with this.

Your home is not an asset.

Again, I had been taught to buy as much house (in the best street) as you could afford and pay it off.  This book argues that as your home takes money out of your pocket instead of paying you, it is a liability.  15 years later, I really don’t it’s that simple.  Buying an expensive home in a great area can set you up financially.  But it guided me towards buying a more modest home in the regional area in which I worked.  This left cash spare to invest

The Dodgy Bits

The book pushes you to “be bold” and take the road less traveled.  There are a few passing mentions to risk, but this really isn’t examined in detail.

I guess I’m not a big risk taker, but I consider the risk the most important factor to consider when taking on an investment.

The book really encourages readers to take on big risks. Readers don’t need to take big risks, they just need to invest sensibly over a long time frame.

Rich Dad Poor Dad Seminars

These had a lot of bad publicity.  They have charged thousands of dollars.

Now, Robert Kiyosaki sells Rich dad poor dad franchises – for $25,000 USD.

I tend to feel franchises tend to target novices with little idea how to run a business, who often lose out big time.

Now, ambitious young men run these seminars in the hope of getting rich themselves off attendees. Hmmm…

Best finance books

Best Finance Book 2: Barefoot Investor* – Scott Pape

Definitely the most popular Australian finance books.  If you haven’t yet read it, get to it stat!  It’s a quick read – squeezed into an afternoon with ease.

It’s also a lot less dry than most finance books.  The personal stories around Scott’s loss of the family home to fire bring risks to life.

Most doctors have read this book, and many have completely reorganize their finances as a result.  No more overdrawn or account fees!

Particularly powerful parts of the book were:

  • Organizing your money to minimize fees and capture savings effectively

  • Start investing regularly now

  • Specific steps to take to start taking action now.

Parts I didn’t Like:

Scott recommends storing your emergency fund in an outside account (not mortgage offset).

His theory is out of sight out of mind – you are less likely to blow it if it’s in a different bank (even suggesting cutting up the key card and making it challenging to access).

For those who are used to keeping an emergency fund, with some self-control, a mortgage offset account is a far more efficient way to store these savings for home owners.

Savings accounts will maybe earn you 2% interest (which you will then pay tax on).

Offset savings will save you currently ~ 3% off mortgage interest (untaxed).

The book is anti-property. He advises not bothering with property investments and going with shares alone.

Although the book is largely “fiercely independent” he had a vested interest here.  The “Barefoot blueprint” subscription for stock market investment tips has now shut down, but at the time of book publication was marketed within the book.

To be fair, I see his point.  Most people I know have not made money from their property investments, due largely to poor asset selection and lack or research.

But I believe with adequate research and professional assistance, property investments can be the most efficient way to build wealth long term.

Passive income

Best Finance Book 3: Investopoly* – Stuart Wemyss (2018)

The least well-known book in this list was a random find.  It had great reviews, and has been my most successful impulsive book purchase to date!

I had read a lot of finance books over the years.  Many are claiming a single strategy they used at a point in time can be repeated in different time periods with equal success.

Most are detailed in one strategy or another.  But initially, most of us need a  plan.

My interactions with financial planners so far have not so much as provided a plan, but sold me insurance and only provided information that was going to profit the financial planner in some way.

Stuart Wemyss is a qualified chartered accountant, independent financial advisor and mortgage broker.

The book uses 8 golden rules to take you through designing your financial plan and work out the best strategy to achieve your goals.  I have not found a book so complete and relevant to me as a frustrated investor.

The book strategies timing which investments first (capital growth first, pivoting into income) which made a lot of sense.  Investor examples are provided.

Concepts are explained so simply anyone without financial know how can understand, and I suspect take some nuggets away from this book.

Exactly what the doctor ordered!  And as a bonus, while writing this review, I have discovered they also have a podcast “Investopoly”.

Here is a list of my recommendations of the best finance podcasts.

Best finance books

Best Finance Book 4: An Armchair Guide to Property Investing*

I’ve talked extensively about the help Empower Wealth provided when I brought my 1st investment property. 

This is not a book by a single property investor who made millions as a result of being super aggressive at the right time, in the right market and with a bit of luck.

The Armchair guide was written by the brains behind the buyers’ agency Empower wealth.  They have decades of experience purchasing properties for clients and have worked out reliable methods that provide great opportunity for profits whilst minimizing risk.

If you are interested in investing in property I would suggest subscribing to their podcast.

The book discusses a lot of the important concepts covered by the podcast, but adds more value with 18 investment strategies explained.

Furthermore, it goes through the detail including prices and target growth / yield for property portfolios for 6 case studies – young rentvestor, DINKs (double income no kids), Couple with young kids, couple with older kids, Empty-nesters and divorcee.

Bits I don’t Like

I’m not sure the book provides the information to actually select the assets reliably.  I actually don’t think this is possible in a book so I’ll forgive them.  I suspect asset selection is a skill that experience is vital for.

Don’t really have any other criticisms for the book.  I have read plenty of “Get rich from property” books but nothing with as much useful and specific information as this.

Here I’ve listed what I think are the current best personal finance books.  I believe these books provide a good foundation of important concepts.

Of course, like medicine, learning never ends.

But starting with these carefully selected books that offer the most value initially will get you a lot further in financial literacy than most.  From here, you can decide what you want to learn more about.

Happy reading!

Aussie Doc Freedom is not a financial adviser and does need offer any advise.  Information on this website is purely a description of my experiences and learning.  Please check with your independent financial adviser or accountant before making any changes.

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