My Top 5 Favorite Personal Finance Books

The first key step in starting on the journey to financial freedom is financial education. But even if you are well on your way to financial freedom, maintaining your financial knowledge is essential. Because reaching financial freedom is all about building and optimizing the simple, but not necessarily easy, habits for financial success. But where should this education begin or continue? With this in mind, I’d like to share my top 5 favorite personal finance books.

This is a really fun exercise for me.

favorite personal finance books — *Start ’em young!*

I’m grateful to all those who have shared their knowledge, mistakes, and thoughts in this topic to help me along the way. This sentiment has been a huge inspiration for me to start my blog and even write my book, Money Matters in Medicine, which I won’t include in this list!

I can remember vividly reading each of these books at different steps in my journey. Each had a particular and important impact on me and Selenid. Without them, I am not sure that I would be where I am in my quest for financial well-being today.

So, we will start at the beginning.

1. The Millionaire Next Door by Thomas Stanley and William Danke

This is a book based off of years of study by the authors into the habits and make up of America’s millionaires. It was the first book that Selenid and I both read at the start of our financial comeback story.

This book showed me that I could actually achieve financial freedom. As silly as it seems now, I did not even think was an attainable goal. Despite my high income as a physician. I was staring down huge student loans and increasing expenses that I felt could never be controlled. This book showed me this was not inevitable and I could make the changes needed.

The shocking overall finding is that millionaires are not what we typically imagine – flashy, driving expensive cars, living in extravagant mansions. This is what the authors call “big hat, no cattle.”

Rather, millionaires are prudent and pragmatic, focusing on saving and investing rather than consuming. One of the memorable quotes is a millionaire who states he drinks 2 kinds of beer, “Budweiser and free.” Obviously, this is a bit extreme but gets the general idea across.

They are also usually small business owners. Physicians by contrast do not generally think like businesspeople.

This book is more philosophical and won’t necessarily give you an actionable guide to financial well-being. However, it does a magnificent job of giving you the evidence needed to change your mindset around personal finances and get your head straight about what it really means to be wealthy.

2. The Bogleheads’ Guide to Investing by Mel Lindauer, Tyler Larimore, and Micheal LeBoeuf

Jack Bogle founded the Vanguard brokerage and was a staunch an advocate of broadly diversified, low fee index funds as the vehicles of choice for wealth building. His followers (I am one) are called Bogleheads.

Three prominent Bogleheads who also help run the Boglehead forum online wrote this book as a top to bottom guide to personal finance and stock market investing.

And the book is excellent. This was the first real “technical” investing book that I read. I was intimidated by the size of the book and the content that I worried I would not understand,

However, you will start this book as a beginner and you will end feeling like an expert. They introduce all of the necessary topics and then do a deep dive into them. After reading this book, you will 100% have a better foundation to understand and implement more advanced investing concepts.

This book provided me the foundation to create and understand the rationale behind my personalized financial plan. Even though this plan involves a very passive approach to long term investing, understanding the strategy and facts behind it gave me the comfort and determination to pursue it.

This is a must-read.

3. Rich Dad, Poor Dad by Robert Kiyosaki

This is the classic book by Robert Kiyosaki. I read this towards the end of the initial surge of my financial education as I transitioned from trainee to attending. And it really changed things for me. Because it added a fresh element.

In the book, Robert (a somewhat controversial figure who’s financial opinions I don’t totally agree with) details how he learned about finances from his rich dad (what to do) and his poor dad (what not to do). Both dads are actual, real people.

The book is a philosophical masterpiece regarding the mindset needed to gain financial well-being. It is not a how-to book but it carries a message with an even bigger impact.

While real estate is a main vehicle of his, the book is not specifically about real estate and is also of benefit to those more interested in non-real estate investments. But for me, this book inspired me to look more into real estate investing.

What really got me was the idea of using real estate as an ATM. Robert gives the example of his wife wanting a new car. But instead of buying a new car, they buy a rental property. Then they use the cash flow from the investment property to buy the car. And they still have a cash flowing asset to boot!

This book showed us the big picture with real estate investing that we continue to use today as our real estate portfolio has ballooned to 18 units as of this writing! You can also see how we used this exact Rich Dad, Poor Dad principle to make a major purchase recently here.

4. A Random Walk Down Wall Street by Burton Malkiel

This is maybe the best finance book that I have ever read. It is detailed and goes into the research behind many of the concepts that I follow like investing in index funds.

I read this book relatively recently as I sought to deepen my understanding of various investing strategies. The concepts discussed certainly go into the weeds. But it is made very interesting.

And the strength of this book is that it goes in depth exploring all investment strategies, including active approaches. He provides what I think is a fair and unbiased analysis of both strategies. I’ll spare the suspense but the passive approach comes out on top.

However, along the way, I learned a ton of really important, more advanced concepts from this book. It helped me to “speak the language” better and also understand some of the rationalizations that active investors use for their approach. This understanding gave me even more resolve in sticking to my financial plan while expanding my knowledge base and perspective within personal finance.

Here are some great summary posts of mine from the book:

5. The Millionaire Real Estate Investor by Gary Keller

If there is one book to read about real estate, this is it.

It is to Rich Dad, Poor Dad as A Random Walk Down Wall Street is to The Millionaire Next Door.

This book will teach you all that you need to know if you are considering or already actively investing in real estate. Selenid and I first read this book right as we planned to start investing in real estate. And we re-read this book or portions of it constantly.

For those of you that are looking to get into real estate investing, I’ve often said and continue to believe that The Millionaire Real Estate Investor and Rich Dad, Poor Dad are the only two books you need to read prior to getting started!

The majority of our real estate investing strategy, summarized here via the tortoise and the hare fable, is based off of this book by Gary Keller.

The best part about this book is that the first half goes deep into the mindset necessary to be a successful real estate investor. This may be the most important component of the book. However it is not sufficient. And the second half of the book details exact strategies for analysis, acquisition, and management of investment real estate.

Whether you want to be an active or passive real estate investor, the information in this book will make you a better investor. Because you need to understand how real estate works regardless of the strategy that you apply.

In fact, I will go so far as saying this book is worth reading even if you don’t plan to invest in real estate. It’s that interesting and the mindset component is worthwhile all on its own and widely applicable.

Here are some other resources for the real estate inclined influenced by this book:

How to go about reading these favorite personal finance books

Whether you are new to the personal finance space or just looking to gain new insights and information, reading books like this can feel intimidating. I know I certainly felt that way at the beginning of each.

My favorite strategy for my (ongoing) financial education is to micro-dose the information.

Instead of picking up a book and saying you are going to read it when you have time, create a manageable plan and schedule to get it done.

For me that means trying to read 10 pages each night before bed. But that is just what works for me. What works for you may be completely different. Find what that is and make it a habit!

Speaking of habits, here are some other great resources to help you build your path to financial freedom:

What do you think? What are you favorite personal finance books? And what are the biggest takeaways from your favorite personal finance books? Let me know in the comments below!