Liz Weston’s Favorite Finance Books

An editor once told me that there are really only a handful of personal finance stories to write, and they don’t change much. We just keep updating the anecdotes and the statistics to try to keep evergreen money advice fresh.

Every once in awhile, though, I’ll read something that gives me a whole new perspective. These are the “aha!” books I eagerly share with my friends and colleagues – and now with you.

Your Money or Your Life absolutely revolutionized how I look at work, money and financial independence. It outlines the tenets of the voluntary simplicity movement, which allows people to check out of the 9-to-5 working world decades ahead of schedule. The book’s philosophy is that you’re trading your life for money by working, so you want to make sure you’re deploying that money in ways that give you maximum satisfaction. But you don’t have to be a hardcore adherent to benefit from its message.

The first version of this book by Joe Dominguez and Vicki Robin, published in the 1990s, outlined nine steps that can raise your awareness about money and take you to financial freedom. The updated version in 2008 preserved the essential core of the book’s philosophy while revising some of its investment advice.

Personal Finance for Dummies remains the book I most often recommend to people trying to learn the basics about money. Author Eric Tyson is a Certified Financial Planner and his advice is based on the sound, proven principles of comprehensive money management. This book, now in its 7th edition, provides a welcome antidote to the deluge of bad ideas – in other books, on the air and on the Internet – that too often masquerade as money advice.

Get a Life: You Don’t Need a Million to Retire Well points out that it takes more than gobs of money to have a happy retirement. Working too hard to accumulate those gobs can undermine what you also need: good health, good relationships, and passions to pursue. Ralph Warner, who founded the self-help publisher Nolo, interviewed successful retirees and distilled their advice into this excellent guide to creating a retirement you can look forward to.

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns makes clear that it’s all about the fees, and that paying too much – or trying to beat the markets – is a loser’s game. Author John Bogle founded the Vanguard Group, known for its low fees and emphasis on index investing, and his book distills the essence of smart, efficient investing. (Full disclosure: I was already pretty convinced of this viewpoint, after getting a degree in economics and graduating from the Certified Financial Planner training program. But Bogle’s book is an eloquent rendition of these principles, and it’s way easier to read than Burton Malkiel’s classic, A Random Walk Down Wall Street, which covers much of the same ground.)

Gotcha Capitalism: How Hidden Fees Rip You Off Every Day – and What You Can Do About It connects the dots to show how companies are undermining free market capitalism with hidden fees and small-print gotchas. We’re not talking small potatoes – author Bob Sullivan’s research shows these sneaky costs set the average American household back nearly $1,000 every year. His book not only chronicles the outrages, but also shows what you can do to protect yourself, and what more needs to be done.

The Big Short: Inside the Doomsday Machine tells you what really happened in the mortgage markets – and it’s a very different tale than the politicians spun after the markets crashed and our economy plunged into recession. Financial journalist Michael Lewis has been writing fascinating, incredibly readable tales of Wall Street and money since his first book, Liar’s Poker, and this is his best yet.

Pound Foolish: Exposing the Dark Side of the Personal Finance Industry may not convince you that your favorite personal finance guru is a charlatan, but you should at least understand how conflicts of interest, questionable credentials and a refusal to face economic reality can shape the advice you’re getting. Author Helaine Olen is a friend, and we don’t always agree, but her book does a great job of outlining the bigger economic picture of an industry that may not always, or even often, have your best interest at heart.

 What personal finance books have helped you make the most of your money?

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Liz Weston - Ally Bank Blog - Finance Books

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