Question: What are the best books on personal finance that you can recommend? Thank you, sir.—Honney Natividad via Twitter
Answer: Best is a relative term and I may not be the right person to give you a qualified answer. However, I can give you my opinion on some books that I personally find insightful and helpful. Finance, even Personal Finance, is a very broad subject matter involving many disciplines and there are many good books out there that are very good read.
There are books that write about the technical aspects of personal finance and zeroes in on specific subject matter, i.e., investing, estate planning, stock market, insurance planning, accounting and the like. There are also books that tackle the broad spectrum of personal financial planning. There are also many books that tackle behavioral issues on finance that belongs on the motivational or self-help genre. Then there are the hybrids that try to give you a more balanced view on the technical as well as the behavioral issues on the finance and I personally go for these books.
Perhaps the most popular finance books are those written by Robert Kiyosaki, which were brought about by the highly popular Rich Dad Poor Dad bestseller. The book is so popular that it created some sort of cult-like behavior among many, which is quite disturbing if you ask me.
Rich Dad Poor Dad and Kiyosaki’s succeeding books have some good points but they are quite over-rated for me because they lack some specificity and many readers question the validity of his claims. Like any book, we should learn to eat it like a fish, we get the meat and throw away the bones, as the saying goes.
Let me give you a list of books that I highly recommend because I like the way they were written—balanced and grounded on solid financial principles; yet they can still help you get motivated. Sorry, Kiyosaki fans, you won’t find his books on my list.
1) Total Money Make Over and Financial Peace by Dave Ramsey—OK I admit it, I’m a Dave Ramsey fan boy and for a good reason. I like his straightforward approach on personal finance. His books, particularly Total Money Make Over is very practical and it is full of real stories of people who overcame financial difficulties.
Ramsey is a no-nonsense finance guru yet you can really sense his sincerity in trying to help people get out of the financial mess they are into. These two books are great starter books that will open your eyes and give you hope.
2) Pwede Na! The Complete Pinoy Guide to Personal Finance by Efren Ll. Cruz—Hands down, Efren’s books are the best personal finance book ever written by a Filipino. It is a concise yet surprisingly comprehensive book that will guide the reader in the many facets of financial planning and financial instruments. As the title connotes, it is indeed a complete guide, yet it will not overwhelm you as you find yourself glued to the pages.
3) Millionaire Next Door—by Thomas J. Stanley and William D. Danko. This is an iconic book that discusses the behavior of Millionaire in the USA. It is not only insightful, it will actually shatter many of our misconception on wealth and wealth accumulation. I particularly like this book because it is based on solid research. This is a good financial behavior book that may help you change your mindset.
4) Automatic Millionaire by David Bach—this book by a best-selling author gives you an overly simplistic view on achieving wealth and yet it is effective in its message that in eating an elephant, we need to do it one bite at a time. Simple, practical and sensible.
5) Money Matters by Larry Burkett—Financial counseling is the most effective route toward achieving financial security but many do not have access to good financial counselors or advisors. Money Matters is a form of counseling book and I like the question-and-answer format. The questions are very practical and real, not superfluous or ambivalent. The answers of Mr. Burkett are successful in providing advice in an emphatic way; yet, you will find that his answers have sound financial grounding.
6) Till Debt Do Us Part by Chinkee Tan—another book written by a local author that I highly recommend. Chinkee’s book deals with an issue that plagues many Filipinos and yet one that is hardly discussed openly. The author successfully convinces the reader that debt is not a good thing and yet it gives us hope that being truly debt-free is within the reach of the average Pinoy. I like the practical steps in finding a solution to the debt trap written specifically for the Pinoy psyche. Chinkee has written many best-selling books but Till Debt Do Us Part remains to be my favorite.
There are so many other good books and reading them is definitely a good idea. Just make sure that you are objective in reading the book and it does help to check the authenticity of the author. Many are led astray by what they read so I want to reiterate this concern. Notwithstanding the many “bad” finance books out there (local and foreign), I implore the Pinoys to get a book on personal finance and read. One good idea can change your future and redirect you to the path to financial peace.
I am in the process of writing a book myself but recommending it here will be self-serving so let me just stick to the six I mentioned. Financial wisdom will be yours if you seek it. Hope this helps.
(Randell Tiongson is an advocate of Life & Personal Finance. He is a director of the Registered Financial Planner (RFP) Philippines and has over 20 years’ experience in the financial services industry. For speaking engagements, financial planning, training and consultancy, send an e-mail to randell@randelltiongson.com. To learn financial planning, visit www.rfp.ph or e-mail info@rfp.ph.)