Looking for books on personal finance? Know what to look for first!

"I am beginner. What books should I read to learn the basics of personal finance and money management?", is a standard question asked in most forums.

The answer is not a list of books! The answer is not 'Rich Grandma. Poor Grandma!'

I love books. I love buying them, collecting them, being among them, smelling them, shelving them. Pretty much everything except reading them! Many who interact with me assume that I am well read and find it strange when I tell them I simply can't focus hard enough to read. So how did I manage? (assuming I do!).

I think asking for books, before knowing what to look for, is a waste of time.  Books are informative, yes, but only those who know how to process that information can convert it into knowledge.

Process meaning, recognizing context, limitations, assumptions etc.

It is all about the key word!

Some say Google is a source of knowledge. Some say it is a source of information. It is primarily a source of noise which their bots cough up in under 0.5 seconds in response to your search terms.  To quickly narrow down on the most relevant links the quality of the key words used in the search matter. If you type in too general keywords, the real gems would be obscured by pages who use 'SEO techniques' to figure higher in the search pages.

So it all about the key word. The right key word could get us the pages with right information and with luck it would pre-processed with useful perspective.

The question is, how do I know the right keyword? How do I know what to look for? What book do I read for figuring out what books I ought to read?!

My experience is that this happens by accident. In fact I suggest you create such accidents!

Don't ask vague questions, like what do I read!

Be specific when you post in online forums: I have XXX requirement and am looking for YYY. Ask a specific questions, you will get a specific answer (from at least a few people!).

Specific answers would be ripe with key words, which you can explore further.

If you don't know what you need, there are enough 'getting started' articles available online. These give you a list of requirements which can be modified to personal circumstances.

Sometimes specific opinionated comments to blog posts help!

Many years ago, when Jagoinvestor was a blog for DIY investors, Manish had written a post on retirement planning. I had made a comment (don't remember what I said).

Subra(money.com) responded (first interaction!) angrily. He said unless a person knows about building a retirement basket, laddered annuities, income laddering, they cannot claim to know about retirement planning.

I still have that comment stored in my old computer. For a person trying to find out more about retirement planning, Subra's comment was literally gold. It had all the keywords I needed to make specific searches. Practically the post-retirement strategy posts that you see today (bucket method, inflation protected income etc.) originate from Subra's comment.

That is the power of the right key word. That is the power of knowing what to look for.

My search led me to Jim Otar's book: Unveiling the Retirement Myth

It practically gave me everything I was looking for. All the formulae for compounding and annuities. Understanding risk, volatility, importance of back-testing, asset allocation and much more. It was my one stop shop, as they say.

The same is true with creating Excel sheets. People ask me for books from which they can learn Excel from and I tell them I just Google. I knew what exactly I was looking for and hence could find it easily.

When it comes to personal finance, a desire to plan meticulously will tell you what needs to be done. That in turn will lead you to resources as to how that should be done. You implement, plan for the next step. Rinse and repeat.

As simple as that.

I think books ought to be treated as a means to an end. Be it pleasure or unprocessed information.


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29 thoughts on “Looking for books on personal finance? Know what to look for first!

  1. Sandip

    Bang on!!! Yes, if you know exactly what you are looking for, then solution is not far. Clarity in thinking and a burning desire - that's all you need.

  2. Sandip

    Bang on!!! Yes, if you know exactly what you are looking for, then solution is not far. Clarity in thinking and a burning desire - that's all you need.

  3. K V Prakash

    You have Explained very simply and beautifully an invaluable thing. it has really made me think about the importance of my approach towards gaining knowledge, the faster and effective way.Thank you for the post.

  4. K V Prakash

    You have Explained very simply and beautifully an invaluable thing. it has really made me think about the importance of my approach towards gaining knowledge, the faster and effective way.Thank you for the post.

  5. jaiho

    I'm a total newbie to financial planning...I have started looking into this once my tax barcket has been increased and I had to pay taxes to the government now.

    Thank god I find the book by Tony Robbins new book "Money - Master the game" which clearly mentions about what to look out for in the financial world and talks in perceptive of a total newbie in this world. Also it contains the interview with world richest and popular financial people what the money is for them, how to keep and grow money, their investment strategy etc.


    It also make us aware of the hidden fees, taxes,biases etc with each investment methods. Even though the book is based of US economy, it is really uselfu for the people any where in the world.

    Enlightened by this book, I started looking for investment options in India and found this blog. Another useful blog is relakhs.com which I found very uselfu.

    Hope this comment helps some body who is a newbie to financial world to choose the right investment path.

  6. jaiho

    Other people who inspired me who taught me of what is being rich means are :

    1. Tim Ferris of 4 hour work week

    2. Ramit set I of I'll teach you to be rich

    3. Half Elrod of The miracle morning

    Its also important to know how to enjoy and experience the money not just growing our money.

    Tim is very good at this as from him I learned about 1 rupee today is not the same 1 rupee 30 years back due to inflation.

    Tim's weekly podcasts are must have for everyone who want to grow not only thier money but also their personal life

    Hope it helps some body who starts now...


  7. Anonymous

    Let's pause to think: Can you become a doctor, lawyer or physicist by just googling your way through? And if google has all the answers, why not shut down all IITs and IIMs and everyone go home?

    You could spend a lot of time and energy improvising a bullock cart. Find out from google how brakes work. How about an air conditioner for the intense Indian summers? That is a lot of fun, isn't it? But does it make for cutting edge research? A lot of investors are still asking the same basic questions (Should I hold on to ICICI? Is HDFC Top 200 a good investment?). Never mind that the world of finance has made a few giant leaps. But why are those questions so dumb and naive?

    Google can give you all the answers, but can it tell you what questions to ask? And how do you even know what questions to ask? There is no substitute for a structured way of thinking about a topic. Wikipedia can explain some basic topics very well, but it cannot string together a series of topics in a way that a book can. A book not just informs, but challenges your assumptions and can change the way you understand and ultimately change your behavior.

    Any idiot can sound intelligent by learning a few buzz words. But that doesn't make him well read. And unless the average investor is well read, there is not much chance of making money in any asset class.

    So don't shun books. And it isn't cool to be dumb. Oh yes, there a ton of books that aren't worth the paper they are printed on. But "what do I read" is still and excellent question to start with.


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