Before I started to invest, I wanted to know more about personal finance in general and my investment options (I have a post on the Importance of Financial Literacy if you’re interested). I started by watching many informative YouTube videos to gain an overview. Although they were very useful, I found that most of them were more applicable to ordinary investors in the US (the platforms that were recommended were usually only available in the US).  

I decided to read books that were more relevant and could provide me with the platform recommendations that I could use. And needless to say, reading books, in general, will always provide a more in-depth understanding of things you want to learn. 

Below is a list of 5 books dedicated to personal finance that I’ve personally read. I listed it in the order of which I would recommend reading if you’re just starting out.

The Meaningful Money Handbook, Pete Matthew

When to read
  • A very good first book to read on personal finance.
  • Changing money habits (importance of financial education, getting out of debt), protection against disaster, and investments.
What it covers
  • The basics of everything you need to know about personal finance in a concise and easy-to-understand manner.
  • Each chapter is divided into “Everything you need to know” and “Everything you need to do”. Information is only useful once you actually implement it.
Keep in mind
  • Quite specific to UK finance, as it talks about UK wrappers and platforms in particular.
What it taught me in particular
  • The importance of protecting against disaster and getting a will.

Stop Saving, Start Investing, Jonathan Hobbs

When to read
  • After reading about the basics of personal finance and when you want to know more about investing.
What it covers
  • The basics of investing and saving.
  • Clearly defines the reasons and benefits of investing.
What I liked
  • Very simple and easy to understand.
  • It has interesting facts and statistics specific to the UK.
Keep in mind
  • Quite simple- only provides an overview of investments.
  • Encourages investing in an actively managed fund, but does not go into much detail about the cons of investing in an actively managed fund.
What it taught me in particular
  • The basics of UK wrappers, in particular SIPPs (Self-Invested Personal Pensions).

How to Own the World, Andrew Craig

When to read
  • After you have read about the basics of personal finance.
  • Focuses more on investing.
What it covers
  • The importance of basic financial education, ISAs, how to diversify investments, and “Own the World”.
What I liked
  • Explains investing in plain English with a useful summary after each chapter.
  • Amazing bibliography and references to other useful books and resources.
  • Explores some information on what is going on in the finance world in general.
What it taught me in particular
  • It taught me to consider investing in hard commodities like gold and silver.

The Bogleheads’ Guide to the Three-Fund Portfolio, Taylor Larimore

When to read
  • After you have read about the basics of personal finance and decided you want to know more about passive funds in particular.
What it covers
  • The benefits of passive funds and index funds.
What I liked
  • For such a small book (62 pages!), it contains a lot of useful information. Straight to the point.
  • Very informative and provides a lot of interesting data and real-life examples.
Keep in mind
  • Not specific to the UK. However, Vanguard- the platform mentioned- is now available in the UK (thanks to this book, Vanguard is my personal investment platform).
What it taught me in particular
  • The advantages of investing in passive funds, because you actually lose a lot of money from fees that actively managed funds charge.

Investing Demystified, Lars Kroijer

When to read
  • After reading about personal finance and the basics of investment.
What it covers
  • The reality for the ordinary investor, how to actually build a rational portfolio, how to invest, pensions and insurance.
What I liked (personally one of my favourites)
  • It seems to be very transparent and honest about what to invest in if you are an ordinary investor who “has no edge”.
  • Very practical in terms of providing a rough guide on how to actually go about investing- especially on how to figure out which investments will give you the best returns with very low fees.
  • It has a very useful index.
Keep in mind
  • It might be considered quite dense for the beginner, as it is more technical than the other books on this list. However, it is nothing that cannot be quickly googled or looked up on investopedia.com.
What it taught me in particular
  • How important it is to not only diversify but to remember that you have no edge as an ordinary investor.
  • Looking out for the TER¹  (total expense ratio) of a fund is really important! You should invest in a fund with a TER of less than 0.3. Otherwise, you would be paying too much for fees.

I hope you have found this list useful! There are so many other great books on personal finance- these are just a list of the ones I have personally read. I hope to read more.

But even just reading one good book about personal finance and implementing what you learn will make a huge difference to your financial future.

¹ TER: Total expense ratio tells you the annual cost of the product including all the fees and admin.

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1 Comment

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