Financial Literacy Books for Teens
If you are in your teen years, high school, college or early twenties, you have the most valuable asset and competitive advantage on your side…time.
You have an entire lifetime to invest and can watch your money grow for decades and one of the worst moves you can make is not educating yourself on how to maximize that time and master money. Below is a list of my favorite personal finance books that changed my perspective on money. If you are older and past your teen and twenties, still take a look because it’s better to start late than never start!
1. Rich Dad Poor Dad
Written by Robert Kiyosaki, this book is a classic in the personal finance community. The author compares his dad (poor dad) to his best friend’s dad (rich dad) and the two men have different views on money.
The book’s key principles are:
Poor people work for money, rich people make money work for them
It doesn’t matter how much money you make, what matters is how much you keep to invest
Rich people buy assets and poor people buy liabilities
In order to build wealth you must change your mindset and how you think about money
2. The Psychology of Money
Written by Morgan Housel and one of my favorites, this book is less about the science and math behind investing and more about our behavior towards money.
The book’s key principles are:
People come from different backgrounds and different life experiences, so we all have unique thoughts towards money that vary based on those life experiences
Most people think you need to earn a lot of money in order to achieve financial freedom, but that is not true! What’s more important is how much you save and invest, not how much you earn
Realizing that investing and building wealth is not highly complicated or reserved for the rich, we are all capable of investing and creating wealth, we need to eliminate the fear and self-doubt
3. The Millionaire Next Door
Written by Thomas Stanley this was the first book about personal finance and wealth that I read back in college. This book debunks widely believed myths about what it means to actually be “rich”.
The book’s key principles are:
Mainstream media portrays wealth as driving fancy cars, wearing designer clothes and dinning at expensive restaurants, but in reality a majority of wealthy individuals actually live a modest and frugal lifestyle
There is a big difference between income and wealth, wealthy people don’t achieve financial freedom by simply earning a high income, they do it by saving that income and investing and that’s what matters
Most millionaires have a long term mindset and avoid making rash and near sighted decisions, they would prefer to drive a used and reliable car instead of the newest luxury car because it will be more cost effective in the long run
4. Die With Zero
Another one of my personal favorites, Bill Perkins’ book Die With Zero provides some refreshing thoughts on personal finance. Many books teach us the importance of building wealth through saving and investing over time, but this book teaches us how to spend our money wisely to achieve a fulfilled and exciting life.
The book’s key principles are:
Time is the most valuable asset, there are plenty of ways to make more money, but it is hard to find more time
Make sure you spend money on experiences that bring you happiness, those memories will last forever
Understand when you have achieved “enough” and figure out at what point can you start enjoying all the hard work you spent building your wealth
5. The Simple Path to Building Wealth
JL Collins is the author of this fantastic book, he does an amazing job of debunking the myth that personal finance and investing is a complex and brain racking exercise. He reassures readers that investing and building wealth is doable for anyone and provides simple action items to get started.
The book’s key principles are:
Spend less than you make, avoid debt as much as possible, invest in index funds
Build a cash cushion so that you have more flexibility and choices, living paycheck to paycheck limits your options and forces you to settle for less
Stop telling yourself you need thousands or millions to invest, all it takes is as little as a few hundred dollars a month to begin building wealth
So that is my list of the best personal finance books for teens or young adults, the earlier you start the better. I have read all of these books throughout my early and mid twenties and each book has provided a unique perspective on personal finance and action items to truly make a difference, I hope you consider reading these so that you to can take steps towards creating a financially independent life!
