Must Read Finance Books – Favorite (And Least Favorite)

Or, I waste money on books so you don’t have to!

Over the years I’ve read a lot of personal finance books. Inspirational books, un-inspirational books, technical books, non-technical books.. Some of them really stretch the definition of “personal finance”. Heck, some could hardly even be called “non-fiction”. Some of them would be included in my list of must read finance books. And some of them you can do without.

Our bookshelves are filling up, so I thought it might be good to take a load of books into the library. But if I’m going through all that trouble anyway, I figured I may as well go through each book and write a brief blurb about what I thought. Several of these books I haven’t read in many, many years.

So without further ado, here are some of the personal finance books that are occupying my shelves. Some I like, and will be keeping. Others I don’t like, and will be getting rid of.


Unconventional Success; A Fundamental Approach To Personal Investment


 must read finance books
This is the only book I’ve read that I consider a must read for anyone who has gotten past the initial stages of personal finance planning. The target audience is the investor with a solid start on his nest-egg, and who finds himself confused about where to invest. The author, David Swensen, has a proven track record of investment success and, in a very methodical way clearly lays out the investments available to the individual investor and which ones he recommends.

This is a good book to keep handy for anytime you feel like dabbling with exotic investments or hot stock tips.


Dictionary Of Finance And Investment Terms

 must read finance booksWhat can I say.. It’s a dictionary. I wouldn’t recommend bringing this on an airplane for light reading. But I would recommend keeping it next to your computer. When you happen on a webpage that has a financial term you don’t understand, you’ll almost certainly find it defined in this book.

It’s one of the two finance books I have that I consider truly useful.


When Genius Failed; The Rise And Fall Of Long Term Capital Management

 must read finance booksIn the mid 1990s, a group of really smart guys started a hedge fund called “Long Term Capital Management”. After a few years of absolutely phenomenal returns, the fund went under.

This book isn’t about personal finance or how to invest, it’s the story of these smart guys and their fund. I found it to be an absolutely fascinating read.

After the first couple chapters I started trying to imagine how I could take advantage of arbitrage in my financial life, and I haven’t stopped since. I’d recommend this book for the reasonably savvy investor who doesn’t have any problems understanding complex financial transactions and likes a good financial thriller.


The Consumer Reports Money Book

 must read finance booksIf I had a child, or a friend, or a sibling who was just getting started in life and didn’t know much about finances, this is the book I’d get him or her. It’s a long book, but it’s intended to be used as a reference. The book goes through topics relevant to everyone, from opening a checking and savings account to buying a house, getting insurance, and saving for retirement.

Each of these topics is covered in depth. This probably isn’t the right book if you have a specific specialized need. But for the vast majority of the population, this single book is probably all that’s needed.


The Millionaire Next Door

 must read finance booksI don’t know if this was the first of the “Millionaire” books, but it’s the first one I read. While I’ve been annoyed over the last decade with the torrent of books claiming they’ll make you a millionaire, I have a soft spot for this one.

I’m not sure why, I guess because I think it’s a good level-setting book for developing the right attitudes about living frugally. I’m curious if I reread it now, after all these years, if I would still have the same affection for it. Regardless, this is one I’ll keep on my shelf.


Options: A Personal Seminar

 must read finance booksLike the Encyclopedia Of Technical Market Indicators, this book isn’t for everyone. I bought it perhaps 5 years ago when I was interested in learning about buying and selling options. Stock options are simple in concept, but can be somewhat complex in practice.

Notably, determining the fair price for an option can be a real chore, and the penalty for getting it wrong may be high (since options can be a highly leveraged investment).

This book does a good job walking you through the process of learning about options. I’m not an expert (I only trade a few times per year), but whenever I need to brush up, this book has the information I need.


Parlay Your IRA Into A Family Fortune

 must read finance booksI’m not a big Ed Slott fan. Like the Motley Dorks, he’s a shameless self-promoter. And I get the distinct impression that his books are an integral part of a money-making scheme for him.

Financial Advisors pay him a lot of money to attend his seminar, and in return he mentions their names in books he sells. Meanwhile the advisors recommend his books to their clients. Further, I find the title vaguely derogatory, for reasons that I can’t explain.

Anyway, cynicism aside, once you get past the self promotion aspect this book is a pretty useful read. I bought this after I inherited a small IRA a couple years ago. There are various things you have to be sure you get right when inheriting an IRA, so I figured paying $20 or so for a book was a lot easier than transferring the IRA to me, then somehow screwing up and having to go back to fix my mistake.

There were only about 20 pages of the book that applied to me, but those 20 pages were worth the cost of the book. If you’re in the process of inheriting an IRA, or want to ensure that your IRAs are set up correctly to pass on to heirs with minimum fuss, this is an extremely useful book.


The Encyclopedia Of Technical Market Indicators

 must read finance booksThis isn’t your grandmother’s investment book. It’s not mine either. If you want help calculating the Bolton Tremblay Indicator or Haurlan Index, this is the book for you. I bought it because, years ago, I wrote some computer programs to provide buy and sell indicators for stocks. After wasting way too much time on that endeavor, I finally switched to index funds.

But if you are a believer in technical analysis, this is a good reference book to have. As for me, I paid about $70 for it and probably opened it half a dozen times. I’m rating it reasonably highly because, for the right audience, I’m sure it’s invaluable.


The Motley Fool Investment Guide

 must read finance booksLet me just say, right up front, that I don’t like The Motley Fool.

I don’t like them because I think those two dorky brothers are full of themselves. I don’t like them because they spam me every week trying to get me to sign up for their stupid forums, and I can’t get off their email list. I don’t like them because they recommended Iomega a long time ago, and I lost money on it. But the main reason I don’t like them is because they charge people a fair chunk of change for what I consider mediocre advice at best.

But I digress. This book is an easily digestible introduction to interpreting company fundamentals. For the beginner stock investor it’s a fine choice. I suspect that there are any number of other books, or webpages, which do at least as good of a job. But I’d have no problem recommending this book to any beginning investor.


Mind Over Money

 must read finance booksI’m not a huge fan of this book. The author tries to describe several different types of people, and their psychological issues with money. I guess the reason I’m not a fan is that I didn’t recognize myself in any of the categories, so I didn’t get a lot out of it. I did recognize some of my friends. And perhaps if they read the book, they would recognize me.

I’m still giving “Mind Over Money” a decent rating because I think it has something useful to say, if the reader is receptive to the message. Unlike “The Overspent American” which seems to focus on one type of personality, “Mind Over Money” spends a chapter each looking at numerous kinds of money neuroses.


The Warren Buffett Way; Investment Strategies Of The World’s Greatest Investor


 must read finance booksLike many books allegedly about Buffett’s investment strategies, this one can’t help heaping praise on Buffett. Personally I find that tiring. I admire Buffett and his success, but I don’t have to have his success beaten into me every… single… day.
Beyond that, though, this book serves as a reasonable primer into value investing. The author looks at numerous of Buffett’s investments and explains the reasoning behind why he put his money where he did. In that regard it’s a valuable read. But unfortunately one of the lessons from the book is that an average Joe, like you or me, could never hope to duplicate Buffett’s success.

You see, calling Buffett a value investor is an extraordinary simplification. He is a value investor with unparalleled access and visibility into the companies in which he invests. That’s something you or I would never get. So while this book may be interesting (or may not be), I really don’t think it’s very useful.


The Overspent American

 must read finance booksI reviewed this book a while ago, and my opinion hasn’t changed. This seems like a master’s thesis that was stretched out to 200 pages. The point it makes is simple, but to the personal finance crowd it’s preaching to the choir.

I think this book might make a decent 20-page e-book or research paper. But it’s not worth paying money for.

Buying Stocks Without A Broker

 must read finance booksYears and years ago, DRIPs were all the rage. DRIP stands for “Dividend Re-Investment Program”, and these were basically low-cost ways to buy stocks directly from a company, thus cutting out the broker. My last couple years in college my wife and I started doing this, buying IBM directly by sending in $20 per month.

But then the internet came along, and with it came discount brokers. All of a sudden, the commissions to buy stocks were chopped in half, then in half again. I haven’t looked recently, but I suspect you can buy stocks for a few dollars now, and services like sharebuilder provide the same benefits of DRIPs without the hassle of dealing with numerous companies.

So, while this book was an interesting read in the mid-90s, it’s no longer relevant.


Nickel And Dimed


 must read finance booksUgh. OK, I should probably write more than that. Whether or not you like this book will probably depend on your leanings. If you think Walmart is evil, you’ll like this book. If you think unions are evil, you probably won’t like this book. I didn’t like this book.

To me, it reads like a documentary from that fat guy that directed “Bowling For Columbine”. You realize a few minutes into it that objective reporting ranks a distant second to the author’s agenda. The author immersed herself in the world of minimum wage work, and “reported” on how tough it was to get by.

If I was convinced by anything at the end of the book, it’s that people in minimum wages jobs are there because they refuse to get out.

Now I don’t really believe that, I’m just saying that’s the impression I got from reading this book. I found it annoying.

Leave a Reply

Your email address will not be published. Required fields are marked *