Top Finance Books to Read: 5 Must-Read Picks for Improving Your Financial Literacy (2024)

1. The Barefoot Investor, By Scott Pape
2. The Intelligent Investor, By Benjamin Graham
3. The Millionaire Next Door, By Thomas J. Stanley
4. Rich Dad Poor Dad, By Robert T. Kiyosaki
5. The Automatic Millionaire, By David Bach

I may have been slightly biased in my decision to list this book as number #1 on my list. And that’s because I’m Australian. This book was created with the intent of helping Australians, and bloody hell did it deliver!

Even though this book covers several areas that are specific to Aussies, the book overall touches on vital financial concepts that are applicable to absolutely everyone, no matter where you’re from.

There’s a reason why one in every 20 Australian homes owns a copy of this book.

It is by far the most practical, down-to-earth read that you will ever come across in the finance world.

Scott Pape does an incredible job of taking you on a journey and simplifying down the unnecessary clutter that is often perceived when it comes to personal finance.

The premise of the book takes you down a ridiculously easy-to-understand and intuitive three-step process: plant, grow, and then harvest your money.

By the end of the book, Scott walks you through a lifetime of acquired experiences, learned mistakes and money tips, leaving you with a structured blueprint on how to eliminate debt, live for today, and retire wealthy in peace, all of which is written in a simple “do this, do that” language that even the utmost beginner can follow along with.

• How to break your key source of income into several different accounts (which Scott refers to as buckets)
• When and how to buy your first home and minimise the costs of lenders mortgage insurance
• The critical importance of superannuation (Australia’s retirement fund) and simple changes that you can make to save hundreds of thousands of dollars over your working career.

Although certainly not as ‘lively’ as the Barefoot Investor, the Intelligent Investor is packed full of foundational finance concepts. The book explains value investing, which is focused on generating steady, long-term profits by ignoring the current market and picking companies with high intrinsic value.

In essence, it explores how value investors search for companies that have great fundamentals and then buy their shares at a discounted price (before mass adoption happens). After that, all they have to do is wait, because eventually, the real value of the company will be realised and unlocked by the masses.

Millions of people have read this book and have found it invaluable, which is why it has been labeled on many occasions the single best book on investing that has ever been written. Hearing reviews like this is all well and good, but when Warren Buffet, who is possibly the most famous and influential investor of the current day recommends this as the #1 investing book ever written… Well, that’s when you should really pay attention.

• There are 3 principles to intelligent investing: analyse for the long term, protect yourself from losses, and don’t go for crazy profits.
• Never try and time the market (day trading and picking the best times to buy and sell) because it is very irrational to do so in the short and medium term.
• Hold true to a strict formula by which you make all your investments, and you’ll do fine in the long run.

The third pick in my list of top is The Millionaire Next Door.

This book is a wonderful read to change your perspective on what a ‘millionaire’ looks like. It aims to eliminate the myths and misconceptions about the rich and wealthy.

The book talks about how the overwhelming majority of millionaires are people whom you would least expect, no big flash house, no fancy car – instead just everyday ordinary people who have fine-tuned the art of establishing intelligent money management habits.

If I were to summarise this book in one sentence, then it would be this: The Millionaire Next Door is the result of decades worth of research, surveys, inerviews and statistics.

This is one of the main differences between this book and others on the list of Top 5 Finance Books That You Must Read – instead of teaching you how to become wealthy, this book shows you what actual millionaires have already done.

The book aims to stop you from becoming a UAW — a term which is coined in the book and stands for under-accumulator of wealth. It delves into how most people could save significant portions of their income whilst still enjoying the pleasures of life, by focusing on the things that really matter and bring personal satisfaction, as opposed to materialistic consumer products.

• In order to become rich, you must develop frugal habits and save responsibly from the moment you start earning more than you need to live off.
• Apply the simple net worth formula to calculate if you’re falling short of your Finance potential.
• Avoid economic outpatient care — spending too much money supporting others — to reach your goal.

Rich Dad Poor Dad is a book that epitomises the phrase “it’s not about how much money you make, but how much money you keep”.

The book traces the story of two fathers; one of which is financially wealthy, the other of which is financially poor. The two dads that are referenced throughout the book are actually an allegorical story about Kiyosaki own “two dads”, the poor dad being Robert’s biological father, and the rich dad being his best friends father who is an educated college professor and wealthy entrepreneur.

The purpose of the book is to present to the reader the starkly different financial understandings that can exist between people.

In this book, you’ll dive deep into financial literacy, acquiring wealth through assets, and what it means to be financially free.

• Use your money to buy assets, not liabilities
• Being financially smart can only be learned through experience e.g. master accounting, investing, etc.
• Give yourself opportunities and avoid fear/self-doubt

Next up on my list is The Automatic Millionaire by David Bach.

When he was seven years old, his grandma took David Bach to McDonald’s. Over lunch, she told him there are three types of people in the world: those whoeatat McDonald’s, those whoworkat McDonald’s, and those whoinvestin McDonald’s. Wow! Later, Bach became a vice president at Morgan Stanley. Today, he runs a consultancy and publishes books. 7 of 12 are New York Times bestsellers, and this one is his most practical template for building wealth.

The Automatic Millionaireis an actionable, step-by-step plan for building wealth without being disciplined by relying on fixed percentages, small payments, and automated transactions.

A simple, practical guide that takes you through a step-by-step plan for building wealth and retiring early.

With several practical pieces of money related advice, Bach’s philosophy follows three rules: you don’t have to make a lot of money to be rich, you don’t need discipline, you don’t need to be your own boss.

This book is great for people who think they need a lot of money to retire at a young age, when in actual fact this isn’t the case. It can teach you how to retire as a millionaire with a house at 55.

It’s best suited for people who tend to fail at sticking to strict budgets

• The importance of setting up automatic transfers to cover things like rent, bills, and credit cards
• Paying yourself first before spending your money
• Grow your savings slow and steady – take 10-20% from your paycheck and put it aside into a savings account
• Getting used to putting away small but consistent amounts without needing to be disciplined yourself

Not all my favourite top reads made it into the Top 5 Best Finance Books That You Must Read.

Here are some other note-worthy reads that you should definitely check out!