One of the best things you can do when starting your FI journey no matter what age you are is to read books to learn tips, tricks, and strategies to help you earn money passively to reach your goal. I’ve read a ton of books on finance and investing, and here are some of my favorite financial independence books.
#1 Rich Dad, Poor Dad
Yes, the cliche answer, but it’s really the book that changed my mindset on everything. Instead of just working for the next 40 years, there’s a different path forward that involves making your money work for you. It’s also the book that started me into looking at real estate, which has been life changing. My wife also loved this book. If nothing else it helps with the mindset you need in order to get out of the rat race.
#2 Set for Life
This is a pretty new book, but it’s great about giving you actionable advice on how to setup your finances so you’ll be financially free. It’s geared more towards a younger audience from 20 to 30 in my opinion, but there are a lot of good takeaways for anyone reading it. Some of it is probably hard to read if you like expensive things like “Whole Foods” as cutting grocery costs is one of the many things he goes over. The author of this book (Scott Trench) actually is a host on the Bigger Pockets Money Podcast, so if you’re looking for weekly actionable tips that’s a good place to go.
#3 Cashflow Quadrant
Yes, another book by the Rich Dad, Poor Dad author. It’s just so good though, it really changes your mindset on earning, saving, and investing. It basically shows you how working for a job and even being self employed are risky and are penalized under the tax code, and shows a better way to approach things. It basically shows what you need to do in order to make your money work for you.
#4 The Millionaire Next Door
This is not a mindset book, but rather a very comprehensive look at how average people become very wealthy over time. It is a very candid look at how people outspend their income and never generate any savings despite huge salaries. It even goes deep into money issues and how they relate to families, how money affects your kids, etc.
It’s a great book, and frankly it’s a really good book for anyone to read regardless of whether they’re looking for financial independence or not. It kind of proves that a lot of what you see is just made up and that most of the wealthy people don’t actually flash it.
#5 The Richest Man in Babylon
Unlike the other books above, this book is very old. It’s a classic tale about saving 10% of your money in order to invest and make greater wealth. I don’t find it as easy to read as the other books mentioned above, but it’s still a decent book to read just for the simple lessons it teaches. For those less financially savvy it might be pretty good as the concepts in it are way less technical than the other books.
Other Financial Independence books
I’ve read some other books that are more focused on specific things like real estate, but for finances the books above are great, highly recommended. My wife liked them just as much as I did (maybe even more). Your finances and spending get better the more educated you are. I know that my own personal journey started when I read Rich Dad, Poor Dad after hearing so many podcast guests mention it as one of their favorite books. In fact almost all of the books above came from podcast recommendations. I’ll do another post later outlining my favorite podcasts, there are some great ones out there.