Hi there, Mrs. 1500 today, cautiously excited to ask you for a good book recommendation.
But let’s go back to last week’s creative side hustle question. It was a leading question – I only asked so I could tell you about my neighbor’s Swinging, Banging Side Hustle on Tuesday.
But I am always thinking of a side hustle I could do to bring in some extra cash. Here’s what you had to say.
Mr. Frugalwoods has a friend who “refurbishes old axe heads and fits them to new handmade handles for a hipster outdoors store in Portland OR. He buys the rusty heads at garage sales and flea markets for $5-10, and sells the finished product for $150 or more.” I love it. Too bad I don’t know anything about axe handles…
Norm from Ridinkulous used to “…make paintings of scenes from Nintendo games in all their 8-bit glory…” Oh, Norm, I would LOVE to see one of those!
Eric over at Retire 29 lives in an apartment building, and collects the bank offers “$500 for you” coupons and sells them on eBay. I didn’t know there was a market for them, and neither of us are too sure of the legality of this endeavor, so please check with your attorney before you do this, yadda yadda yadda. But he averages about $15 for each one. Not bad…
Reader Zugzug is a pizza delivery driver. He says it is one of the easiest jobs and he is paying down his student loans much faster now. I love to hear stories like this!
Mr. PoP from Planting our Pennies works with a guy who has a finger on the luxury sports car market in Florida. He buys the cars around the country, drives them around for a bit, then resells. He is at least breaking even, plus gets to drive around Ferrari’s. Nice.
So back to today’s question, can you recommend a good finance book? You see, Mr. 1500 has two sisters, both of whom have no concept of money. The younger one, especially.
They know it gets spent, and spend it they do. They see something they want, they buy it without regard to what other, more useful items they could be buying with that money. “Oh, but it’s only a dollar…” I hear that a lot.
But recently, the tides have shifted. No, not with the younger one. I don’t think that one will change until both parents who currently fund her life have passed on.
But the older one seems to realize that her current ways cannot continue. She is a wonderful example of what not to do. It doesn’t matter what she is doing, she is making the wrong choice. She chose to go back to school to get a degree that didn’t really mean anything to her, rather than take the opportunity of a lifetime and go through paid training to learn a computer system that is used in almost every single physician’s office in America. She had difficulty in her classes at school, ended up in massive debt with still no degree. Sigh.
She had to take a lesser paying job to go to school. When she finally decided that school wasn’t going to work for her, her old job was no longer available. Neither was that sweet deal with the paid training.
Fast forward several difficult years, and she asked Mr. 1500 if he could recommend a book about budgeting. She knows he is ‘good with money.’
So I am now asking you for your recommendations on financial books in general, and budgeting specifically.
Has anything helped you out? Any program you would recommend? Thanks!
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I wish I had one for you – but I can’t wait to learn which ones are recommended, as I would love to give my baby brother (ok, he’s 35 so not a baby) a book or two for his upcoming birthday. He’s finally getting settled, and with his new job has a lot of potential – if he can learn to manage his money and avoid lifestyle creep.
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Its great there is an opportunity for an opening here. However i think jumping right to a strict “budget” book would not be the most effective means of helping her change her thinking and motivations (which then would leave to effective budgeting, etc. . ). I would say you are looking for something that helps her understand her values, how much of what she spends doesn’t help her achieve those and how to be aware of your priorities in life (and how you need to consciously pursue them, not just assume you will achieve everything without effort/sacrifice).
What about
1) “Your Money or Your Life”? – a good anchor book on understanding the value of your time and why financial independence is so important.
2) “Smart Couples Finish Rich” – by David Bach. Don’t remember if she is married or not, but this is also a very good book on understanding what is really important to you (and your spouse), understanding that a lot of the things you spend time/money on don’t help you achieve your values, and creating a plan to achieve that together.
3) “The Millionaire Next Door” – might be good at lifting the veil on all the assumptions of what it actually takes to be a wealthy person (which is not living a lavish lifestyle), and encourage her to pursue true wealth not just the appearance of it.
Each of these is an easy read and are great at opening a door to a new world of thinking and continued investigation.
Dave Ramsey’s Total Money Makeover! We did Financial Peace University based on that book, and the baby steps are helpful for when you’re so overwhelmed with your finances that you just don’t know where to start. Very practical.
The book is a great way to start, especially for someone who’s dug themselves a deep hole. I don’t like his information towards the back end (investing wise and all that), but he really boils down the beginning part of getting out of debt into a way that builds on itself.
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If her consumer debt : income ration > 1, then I would strongly recommend that you give her a basic budgeting book (like Total Money Makeover by Dave Ramsey or Your Money or Your Life, or a subscription to YNAB) rather than one about investing.
Although it’s great to invest for retirement even if you have some low interest debt, your sister might accidentally fall for a get rich quick scheme if she is desperate.
Ramit Sethi’s I will teach you to be rich is a good book for smart but lazy people as a lot of his advice is geared toward’s people who just need to get their butt in gear, but he does not promote frugality at all, so watch out with that one ( he does advocate setting aside 20% of income though).
You could also buy her a consulting session with a money coach- there are lots of those in the blogging world.
YNAB’s website has some AWESOME info on the “why” behind their system. Great videos, presentations, live courses, etc.
Although you can’t force anyone to do it. We tried to help my SIL who wanted to learn how to budget and then she was whining how she didn’t have a computer that worked. Even though she did.
Chris @ Flipping A Dollar recently posted…L.L. Bean – eBay Clothing Series #4
For budgeting probably one of Dave Ramsey’s books is best. For budgeting/investing, something like Automatic Millionaire or Smart Couples Finish Rich would be solid.
Have a great week
-Bryan
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Ramsey’s “Total Money Make Over” and The Millionaire Next Door are my favorites!
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Ha ha. Wasn’t sure if you were serious. I have a Flickr album of Nintendo paintings I made, which I think is complete. Some I made more than one of. Like, there are three Metroids and two Glass Joes out in the world because they were especially popular.
Wish I could recommend a finance book, but since I went to school for accounting, I don’t think I’ve ever read one outside of dull textbooks. However, I do listen to the Suze Orman podcast/tv show every week.
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Awesome!!!!
I second “The Millionaire Next Door”, but I’ll also add another – “Nice Girls Don’t Get Rich”. I read it around when I was graduating from college/in grad school and remember taking a lot of the advice to heart since I knew at that point *I* was the only person that had my back financially.
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” All the money in the world” by Lauren Vanderkam. I really liked it, and would recommend it to the maybe not-as-interested in PF sort because it falls on the softer side– not strict budgeting or finger pointing about mistakes, but gentle suggestions about looking at personal values and how your spending choices might or might not line up with them. I think it is an important step, to get at what informs your decision making about money before tackling handling it properly.
I think that All Your Worth by Elizabeth Warren is excellent. She advocates a percentage plan that’s pretty simple as opposed to the detailed budget that can overwhelm people who are not detail oriented. And I second and third Your Money or Your Life and Dave Ramsey. When she’s ready there’s a book by Andrew Tobias called the Only Investment Guide You’ll Ever Need I think and it’s very good. I’m surprised I don’t hear it alluded to more often on financial independence and PF blogs.
I have read many of the books mentioned above and they are fantastic. I would add The Richest Man in Babylon by George Clason. It is a relatively quick read filled with many wealth building principles. Some of the ideas may seem elementary, but they are incredibly effective when put to use repeatedly.
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I second this recommendation for The Richest Man in Babylon
I 3rd the Richest Man In Babylon and also suggest that she start out with philosophical books that will lay the groundwork (mental fortitude and conditioning).
If her problem is simply poor arithmetic (bouncing checks, payday loans, etc) any remedial accounting / finance book should work fine 🙂
Being that I invest in stocks and have been doing so for my whole adult life, I always recommend these two books from Jeremy J. Siegel: Stocks for the Long Run & The Future for Investors: Why the Tried and the True Triumph Over the Bold and the New. These two books are not simple, but what great reads.
Joe
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I really enjoyed Millenial Money. It’s a good starting place for any under 30 person to really understand how important compound interest can be when you start young. Written with this generation in mind.
Millennial Money: How Young Investors Can Build a Fortune
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MMM has a link to a free online copy of The Richest Man in Babylon…enjoy.
http://www.mrmoneymustache.com/wp-content/uploads/2012/01/the_richest_man_in_babylon.pdf?6d6156
I’m not sure how old your sister is, but I could see a book like You’re So Money by Farnoosh Torabi or I Will Teach You to Be Rich by Rahmit Sethi, I think they are a bit more colorful and appeal to a 20-35 age that needs some ideas to get the ball rolling. I would give this to anyone who’s a little more trendy at the time of reading.
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I just finished reading “Raising Financial Confident Kids” by Mary Hunt and thought it was a great book.
If you want something more general I like “Your money or your life” by Vicki Robins & Joe Dominguez as well.
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Only one book is needed: – the Complete Tight Wad Gazette compilation.
I found J.D. Roth’s book (Your Money – The Missing Manual) quite helpful. It’s available in various formats through amazon. I liked that it’s a bit of a comeback story – he admits to all his mistakes and shows/tells how he turned things around.
I liked the Coffee House Investor – http://www.amazon.com/Coffeehouse-Investor-Wealth-Ignore-Street/dp/159184584X/ref=sr_1_1?ie=UTF8&qid=1421721735&sr=8-1&keywords=coffee+house+investor&pebp=1421721739394&peasin=159184584X
Narrative style, filled with good information.
The Mindful Investor by Maria Gonzalez and Graham Byron
This book is a bit different. It is more about thinking and awareness than investing. I’m usually not all “zen” and things, but it is a very interesting book. Investing is a very mental exercise and “honing” those skills are not often thought of. I love the term “Equanimity”. Being aware of things happening around you and just accepting them instead of trying to change/control things.
Two other favorites are Bogleheads Guide to Investing and Bogleheads Guide to Retirement Planning.
In my opinion ones perspective of a millionaire is something very different to the actual based on the research done in the book ‘The millionaire next door’ which I certainly think is food for thought.
While I don’t think there is one book that hits the nail on the head in the terms of money vs future vs lifestyle, this certainly does create the light bulb moment. With the general census being do you care about what other people think of you? do you need to buy stuff to prove your wealth?
I think this can then lead onto other financial reads based on ones situation.
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Thanks for putting me in your post, I feel famous now!!! Lol
I havent read a ton of finance books but I did read the millionaire next door which I’d recommend to someone looking to learn.
Here’s my $.02, maybe somewhat in order so one builds on another;
Two Income Trap – Warren
Rich Dad, Poor Dad – Kiyosaki
Millionaire Next Door – Stanley
A Random Walk Down Wall Street – Malkiel
The Signal and the Noise – Silver
Black Swan – Taleb
Early Retirement Extreme – Fisker
Cheers!
Not a budgeting book; but an easy to read and follow investing book; Millionaire Teacher by Andrew Hallam. Great job of explaining in non-technical terms.
Hi Mr. 1500,
Funny that you ask this question while I’m looking for some financial literature myself as one of my 2015’s goals!
I personally hesitate between “Your money or your life” and “A Random Walk Down Wall Street”.
If any of you have read both, I would be glad to know your feedbacks!
Good luck in educating your family 😉
Yours,
MP
Both are quite different and focus on different aspects of financial literacy, if you have time I would recommend reading both. Random Walk is essentially making the case for (and proving) that actively managed funds cost you money but make the investment manager rich (and that it’s all luck anyway), and that passive low-cost index funds are a better investment vehicle. YMYL is more of a way to conceptualize your financial priorities. It’s a philosophy for understanding how much work costs you and how to effectively spend money that’s in line with your values.
So, one’s quite technical and researched, the other a primer for personal financial philosophy….I’d read both! In fact Random Walk has a new updated version (12th, 13th?) out and I’m going to re-read it!
Cheers and good luck!
Hands down my favorite finance book is ‘How Buffet Does It’. It gives an overview of what it means to invest and why investing isn’t a game and it isn’t just playing the market. There are 24 ‘chapters’ that each focus on individual concepts like practicing inactivity and ignoring market forecasts.
The book title doesn’t do it justice. At it’s core it teaches the tenets of investing and outlines pitfalls that effect many investors.
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