In 1997 I picked up my first personal finance book, The Millionaire Next Door. He had heard that the book revealed to the world that millionaires were cheap people who drove old cars and didn’t send their kids to college. Nothing could have been further from the truth. In fact, the book revealed to me the common qualities of millionaires and that becoming one is not such a crazy idea. They have certain characteristics and habits and developing them is the surest way to join the ranks of the world’s millionaires.
Truth be told, personal finance books are a dime a dozen. You can’t roll a rock without hitting one. What makes one book better for you than another? Since 1997 I have read between 10 and 15 personal finance books a year. Over 100 books later, there are only 10 that have made a genuine difference in my life. The rest were filler. At $10 a book that’s a lot to spend on padding.
How can you choose the right book for you and still keep your money in the bank? No, I’m not just going to suggest that you get a library card. Wasting time on the wrong book is just as bad as wasting money. There are a few simple steps to follow that will help you choose the right book for your stage in life.
Ten action steps to select the right book for you:
1) Before going to the bookstore or library, decide what is most important to you at your particular moment. Is eliminating debt, starting a savings plan or investing the most important thing to you?
2) Look for a book that teaches a new concept about an idea. In its first few pages, Rich Dad Poor Dad presented the balance sheet in a simple and easy to understand way.
3) Look through the table of contents. Is there a chapter in there that seems to address your problem? If so, please scan that chapter to make sure it contains valuable information for you.
4) Is there a glossary of terms? Or will you need to have your financial dictionary or internet connection handy to understand your book?
5) Read the preface, does the author communicate his purpose for the book and is it in line with his personal philosophy?
6) Is the author’s language style appropriate for you? In the 1990s, personal finance books were written for baby boomers in their 30s. The language was quite serious. Today’s personal finance books are written for generation x, generation y, and generation whatever. The language style is more aggressive.
7) Is the book full of exercises that you will not do? Be honest here. One of the main reasons people don’t finish a personal finance book is because it’s full of exercises they wouldn’t do. These exercises are very different from action steps, the steps designed to help you remedy your current situation. The exercises in personal finance books are often aimed at helping you figure out how desperate your current situation is. If you didn’t already know how desperate your current situation is, you wouldn’t be reaching for a personal finance book in the first place. You need action steps, not psychoanalysis.
8) What do other people say about the book? The Internet allows anyone to connect with book reviews. People are generally quite open about their situations. Has the book you are considering helped anyone in a similar situation to yours?
9) Is the book just a rehash of something you’ve already read? Many financial books, especially books by the same author, are simply books that repeat the same material repackaged for a different audience.
10) Is the book an end in itself or just a promotional piece for a financial seminar? I cannot stress this enough. You’re looking to solve your current financial situation through education, not become part of some author’s marketing machine.
Once you’ve mastered the basics, there’s a lot to know in the world of money mastery. Right now my focus is on books that teach new concepts about work, play, and life. Just because I find a book intriguing, I don’t run out and buy it. Instead, I place it on my queue and wait. I’m always re-prioritizing and looking at the materials I already have; if that book is relevant in 30 days, I’ll put it in my active queue to buy and read.
Using the 10 steps I just described will help you get the most books for your money, avoid unnecessary and redundant purchases, save you time, and help you keep more of your money in the bank.