The 5 Best Personal Finance Books I’ve Read All Year
I’m a voracious reader. I was that six-year-old kid you saw staggering out of the public library with a two-foot stack of books, and 50 years later I’m still doing it. Over the first 45 years of my life, I accumulated over 3000 paperbacks, which made me a fun guy to be around during military household goods moves. Hawaii’s tropical climate (and critters) eventually forced me to give away that collection, and a Kindle app has restored our domestic harmony. Now I’ll never run out of storage, and financial independence gives me even more time for reading.
Today my weaknesses are NetGalley, BookBub, and the “Buy Now With 1-Click” button on my Amazon account. (I know better than to go for Kindle Unlimited.) I also share a huge number of manuscripts and PDFs from other personal-finance bloggers. My reading pile works out to well over a hundred books per year.
We’re going to share the top five of this year’s survey. You can buy one of them with a discount (rightfully so!), and we’ll update this post when the others have deals. This site might earn a small commission when you click on the links, but your price is the same either way.
The books cover widely different topics, so pick the subject that’s suitable for your situation. You could gift one of these over the holidays or you may decide to wait for New Year’s resolutions.
First and foremost:
Your Playbook For Tough Times
Donna Freedman’s full title is “Your Playbook For Tough Times: Living Large On Small Change, For The Short Term Or The Long Haul”. She has decades of experience at raising a family on very little money, and she does not mince words. This is not merely an advice book but rather an encyclopedia with detailed maps. It includes names, websites, and addresses. It should be displayed on the kitchen wall of every home and labeled “In Case Of Emergency Break Glass”.
We’re not talking frugality or even deprivation. This is survival during long-term unemployment or disability, perhaps while caring for your family and dealing with debt. This is the book you read at 2 AM when the unpaid bills keep you awake. She lists techniques for both spending less and earning more, but also for getting help. She explains how to use United Way’s 211 phone number in your community and exactly what to say for the assistance you need while keeping your self-respect.
The 12 chapters can be read in any order, and each one is packed with specific advice on cutting costs. Ms. Freedman goes into great detail on food, shelter, utilities, and clothing. (The rest of our consumer “needs” are really just “wants”.) Later chapters cover rebuilding your emergency savings, entertaining on a budget (or on no budget), and maintaining morale.
Donna knows marketing, too. Through the end of January 2017, use discount code “MILGUIDE” at “Your Playbook’s” e-junkie cart for a $5 PDF. That expense returns many multiples of its value in helping you get through the tough times. It also makes a cheap gift for anyone who’s struggling yet reluctant to ask for help.
Military In Transition’s Guide to the Survivor Benefit Plan
Here’s a book that every military couple needs to read and discuss.
Servicemember and CFP Forrest Baumhover wrote this short eBook from discussions on the Facebook group. He cuts through the confusion (and hype) by explaining both why most families want the SBP. You only get one chance to choose SBP when you retire from the military, and you only get one more shot at canceling it. (“No pressure.”) Then he goes on to explain why some families don’t want the SBP.
For military retirees, the Survivor Benefit Plan is simply the world’s best inflation-adjusted annuity. Its expenses are subsidized by the federal government, but a survivor annuity is not the right choice for everyone. Some families only need term insurance (at a far lower cost) while others might choose to completely skip both survivor benefits and life insurance.
The biggest SBP controversy is comparing apples to oranges. Some military spouses take great comfort in knowing that they’ll have a lifetime survivor income, while others want a lump sum for paying off mortgages or putting the kids through college. Still, others want to use SBP to fund a special-needs trust for their adult disabled children. All three choices have their advantages and their drawbacks yet the vocabulary can be confusing.
Forrest not only covers the discussion but digs into all the numbers and shows the case studies. If you want to check out an early version of this analysis then join the “Military In Transition” Facebook group. You can click on the “Files” link for Forrest’s comparison of “A Term Life Insurance Policy Compared To The Survivor Benefit Plan”.
SBP is still an intensely personal (and for a few, an emotional) choice, but by the end of this book you’ll make an informed choice.
Note: I helped edit one of the early drafts. My spouse and I have both declined our SBP coverage on each other. Read the book to learn why.
The Simple Path to Wealth
(Your Road Map To Financial Independence And A Rich, Free Life)
J L Collins is one of my favorite personal-finance authors, and I’m not just saying that because he has more investing experience than me. He’s one of those guys who will probably never stop working (on projects he loves) and he’ll never retire early. He’s always been more interested in the freedom of financial independence.
His analysis simply cuts through all the crap around investing.
Spend less, save more. Invest it in an asset allocation of Vanguard passively-managed stock index funds with low expense ratios. (You might only need one fund). Any questions?
As your net worth grows and you approach financial independence, then seek more happiness in your life. (Hint: it’s not found through buying more stuff.) As your net worth grows even more then you can enjoy more freedom. You can take your financial independence a few months at a time (ditch the job, travel the world) or work less (go part-time or telecommute, spend more time with family). Eventually, you’ll accumulate 25x your annual spending and be free to do what you want.
I could go into a lot more detail, but let me put it this way: I bought this book for my daughter. I’m pretty sure her spouse will be reading it too.
Can I Retire Yet?
(How to Make the Biggest Financial Decision of the Rest of Your Life)
Darrow Kirkpatrick is still one of my favorite early-retirement authors, and this is his second book. (He’s already financially independent.) He quit work at age 50 to climb rocks and bicycle through the mountains, but first, he exhaustively analyzed the long-term math. He wasn’t paralyzed by the fear of the risks, but his research reassured himself that he was taking reasonable opportunities to reap greater rewards.
Today he spends even more time on difficult questions like “How much will I spend in retirement?”, “How will I handle inflation?”, and “What withdrawal rate should I use?”
Darrow digs into the details behind each question. There are no pat answers, but he shows you the important factors and suggests ways to handle the uncertainties. He also gives you a “lifeboat strategy” to redirect your spending if the economy tanks or if you’re running low on assets. The book concludes with the six most important questions that you’ll have to answer about your new retirement life, including the dreaded “What will I do all day?!?”
He’s become the Internet’s leading expert on financial independence calculators by putting dozens of them through their paces. His book is just as thorough.
Last but definitely not least is a startup reference manual:
Finance Your Own Business:
(Get on the Financing Fast Track)
Yeah, it’s one of the more expensive books on this list. In this case, $11 is a great price for all of the resources, and it’s an investment with an outstanding ROI.
This is the most comprehensive funding reference manual that I’ve ever read. I know Gerri Detweiler from her show and her FinCon presentations, and she applies her expertise to every program and situation you’re likely to encounter. From building your business credit to finding loans to crowdfunding, the authors cover all of the details. They also explain why you should avoid using your retirement funds and how to avoid the scams and the vultures.
Every good business should be funded with other people’s money. (If you can’t get that support then it’s not a good business.) This book gives you the vocabulary and tools to make it happen.
What’s on your list?
I’m always looking for more references (and recommendations for future posts). What’s on your “new & noteworthy” reading list? What do I want to peruse next, and what would you review in a blog post?