“Investing in knowledge…
Simply put, these are books that continue to influence what and why I blog here on the Best Interest. They have altered my perspectives on finance, or society, or life.
…pays the Best Interest”
If you find my thoughts interesting, I think you’ll also find these authors and these books interesting. Here are my quick recommendations, and you’ll find longer descriptions further below.
Will you take Ben Franklin’s advice?
Invest in knowledge
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- Use personal finance as means towards a fulfilling life. Your Money or Your Life, by Vicki Robin and Joe Dominguez.
- A young adult’s first personal finance book. I Will Teach You to be Rich, by Ramit Sethi
- Want to understand the markets from an expert? A Random Walk Down Wall Street, by Burton Malkiel
- Or would you rather learn from three lifelong passive investors preaching the “everyman’s method”? The Bogleheads Guide to Investing, by Lindauer, LeBoeuf, and Larrimore
- A fantastic primer on predictions, forecasting, and statistics. The Signal and the Noise, by Nate Silver.
- Take a big step back towards first principles: why do humans even believe in this thing called “the economy?” Sapiens, by Yuval Noah Harari
- Want to see some really cool examples of top tier companies? Good to Great, by Jim Collins
- Or would you rather focus on detaching yourself from the corporate grind? The Four Hour Work Week, by Tim Ferriss
- Maybe you want to develop the habit of saving? Or break your habit of spending? The Power of Habit, by Charles Duhigg
- Do you want encouragement about how individuals can change–and have changed–the world? You Can’t Be Neutral on a Moving Train, by Howard Zinn
Longer reviews…
Your Money or Your Life, by Vicki Robin and Joe Dominguez
The book goes beyond simple questions about earning, saving, debt, and spending. Dominguez and Robin also ask questions about fulfillment, goals, and life satisfaction. Sure, saving is good. But what’s the end goal? Paying off debts helps you. But why is it important in 10, 20, 30 years? Your Money or Your Life looks at the bigger picture. It’s a bastion of Best Interest thinking i.e. personal finance is a key factor in life satisfaction–but it’s only one factor.
In the authors’ words, many finance books written today “assume your financial life functions separately from the rest of your life.” But the point of Your Money or Your Life is “putting it all back together. It is about integration, a ‘whole systems’ approach to your life.” Good habits, good goals, optimizing satisfaction, maximizing free time, helping others, spending times with loved ones. Personal finance is a means to those ends, but those ends are the things we really care about.
I Will Teach You to be Rich, by Ramit Sethi
This funny book could easily be titled, “My First Book of Real Personal Finance”
It doesn’t get into some of the gritty details, but it does a terrific job explaining some simple concepts that every adult ought to know.
- Why credit cards can be your worst enemy
- How to properly set up various bank accounts
- What’s a 401(k)? What’s a Roth IRA? And should you use them?
And a few more concepts. If you already know answers to the questions above, then this book probably won’t add too much new knowledge. But if you don’t know the different between a Savings account and a Checking account, this would be a great way to learn some personal finance basics.
A Random Walk Down Wall Street, by Burton Malkiel
Malkiel takes the reader for a walk down Wall Street, discussing different investments and different investor strategies. Along the way, he details what academic research supports as the best investment strategy. Any guesses?
Early chapter discuss the history of investing and famous bubbles—very interesting for you crypto aficionados.
Later chapters go over some Wall Street basics. It can be complicated for first-timers, but it’s all useful knowledge.
The book finishes with great advice on how to apply the knowledge in the book as an average citizen, whether early or late in your career.
The Bogleheads Guide to Investing, by Lindauer, LeBoeuf, and Larrimore
Here’s another one focused on the details and structures on the investing world. The three authors are all “Bogleheads,” a self-named group of like-minded folks who follow the advice of Vanguard founder Jack Bogle. Bogle invented the index fund.
This book describes different investing options, and then lays out the simple investing strategies that the Bogleheads have used successfully for decades. There’s no complex trading schemes or constant stream of buy and sell advice. Instead, put a little money into 2 or 3 places every month, and hold that investment until you retire. They literally call it The Lazy Portfolio.
Sounds easy? That’s the point!
The Signal and the Noise, by Nate Silver
If you’re interested in baseball, poker, chess, the weather, investing, politics, earthquakes, terrorism, or disease…you will find at least one interesting chapter in this book. But if you’re interested in statistics, models, forecasts and predictions, then you’ll find this entire book enthralling.
The Signal and the Noise is one of the coolest books that I’ve read. Like many of the wonderful books on this list, it discusses complex ideas (probabilistic forecasting) in simple terms. It makes you realize the importance of forecasting in so many diverse fields, and how those forecasts can be used correctly and incorrectly, for good and for bad.
Whether you’re looking to discuss the efficient market hypothesis, trying to win your buddies’ poker night, or hoping to politely discuss global warming with Uncle Dave, you’ll find something interesting in this book.
Sapiens, by Yuval Noah Harari
Why is a one green piece of paper worth a bundle of bananas?
And then a different green piece of paper is worth a whole shopping cart of food?
A piece of plastic buys a car, and all we see is a number on a digital display change. Why?
This isn’t a finance book, but it will blow your mind anyway.
Yuval Noah Harari focuses on how humans’ unique brains enabled the world that we see today. Harari argues (controversially, mind you) that our world is built on imagination. Some of the most powerful structures in society—religion, economics, governments—are all built on a mutual trust that we are all imagining the same thing. Birds can’t do it, dogs can’t either. Some monkey could maybe do a little, but Sapiens unlocked a true revolution via imagination.
The Four Hour Work Week, by Tim Ferriss
Haven’t we all had the moment in life when we pause and ask, “Why answer customer complaints for 14 hours a day when I can move to Argentina and become a world champion tango dancer?”
Ahh, Tim Ferriss. If you haven’t heard of Tim, he’s a “world’s most interesting man” type. He knows a lot, he’s done a lot, he experiments a lot. You get the feeling that he just wants to try everything.
The Four Hour Work Week is a how-to guide from Tim, based on his own experiences. He went from a burn-out office job to a burn-out (but very successful) entrepreneurial venture, and then found a way to automate or delegate just about all of his responsibilities. And yes, he became a champion tango dancer.
While sometimes Tim markets himself a bit too much in this book, a lot of his actual advice is great. For example, Tim loves the Pareto principle. And I love the Pareto principle. 80% of the outcomes come from 20% of the inputs. So focus on those 20% of the inputs, get your 80% of the outcomes, and then go find some other dance to become world champion of.
Good to Great, by Jim Collins
I don’t worship at the altar of Corporate America, but I do think that this book has lessons that normal people can apply to their normal lives. For example, this is where I first read about the Stockdale Paradox. It was love at first sight.
This book takes an in-depth look at a few companies that made huge leaps from “good company” to “great company.” Just what makes the greats so much better than the goods? Even though I’d rather read about personal improvement than corporate improvement, I found this book extremely interesting.
The Power of Habit, by Charles Duhigg
I’m constantly struggling with maintaining good habits in exercise and diet. But, my spending is very disciplined.
I have friends who eat and lift like Olympians—and it shows. But they lose all self-control at the slightest whisper of “20% off sale.”
What gives?! How can I be so different than them, but also so similar?
The secrets lies in habits. How they’re formed, how they manifest themselves, and how we can overcome them. Using Duhigg’s book, I’m slowly (but surely) making progress in identifying my bad habits, overcoming them, and building new (good) habits.
You Can’t Be Neutral on a Moving Train, by Howard Zinn
This isn’t a personal finance book. It’s a book about our society, some of its issues, and how individual people like you and me can make a difference.
Howard Zinn saw first hand–through a blue-collar upbringing and service in World War II–how political power and governmental decisions can direct our lives. This book serves as a memoir of his actions during the Civil Rights movements, protesting wars, fighting for workers’ rights.
Perhaps most important, Zinn steadfastly encourages others, his students, and his readers to consider doing the same. Take a stand, fight for what you think is right, and attempt to make a difference.