10 Must-read Books For Youngsters To Understand Money Before They Begin Investing
Whether you are a teenager or someone who belongs to Gen Z or the millennial generation, getting rich is something we all dream of, right? But we tend to miss out on the very first step that actually ends up separating a financially wise investor from others who fail to manage their money properly.
The first step is to understand money before you invest it. That is exactly why this list of 10 must-read books for youngsters can help you first understand money, which would act as a foundation to enable you to invest wisely and be right on the path of wealth creation.
This is important because merely having money and putting it into different stocks or other asset classes does not make you rich. It's all about wealth creation, and for that, it is important to understand the concept of money first, regarding which these 10 books can help you.
10 Must-read Books For Youngsters Before They Begin Investing
1.I Want More Pizza
How can pizza be linked to learning about money? Well, after reading this book, you would surely know why.
This serves as the ideal book for reluctant readers. Regarded as perhaps the most digestible personal finance book for teens, Steve Burkholder’s I Want More Pizza is widely used in schools, and the 2015 book is cut into four “slices:”
These four are- You (goals, priorities, etc.), Saving (why and how to save), Growing Your Savings (including investing), Debt (including credit cards and paying for college)
Many young readers, and more than a few parents, will identify with Burkholder, who shares his personal story of saving up $5,000 by mowing lawns and working at McDonald’s in high school, only to lose every last penny of it in the stock market before he was out of college. It was a costly lesson, but one that helped fuel his interest in better understanding personal finance and explaining it to others.
2.Broke Millennial: Stop Scraping by and Get Your Financial Life Together
This can turn out to be a great read for understanding credit and debt. Erin Lowry’s popular 2017 book covers aspects such as saving, budgeting, investing, and the usual topics. However, it is especially focused on debt, including student loans, credit cards, and other financial burdens that can hit young people especially hard.
While noting that today’s teens were born too late to qualify as millennials, financial writer Erin Gobler told us that the book is her “go-to recommendation for people who are dipping their toes into personal finance for the first time, including teens. The author distils information in a way that’s easy for someone to understand. She doesn’t go overboard on the jargon, meaning someone who’s just getting started can easily understand it.”
Lowry’s book has already inspired at least one sequel: Broke Millennial Takes on Investing: A Beginner’s Guide to Leveling up Your Money (2019).
3.How to Money: Your Ultimate Visual Guide to the Basics of Finance
For this book, best-selling author and frequent TV guest Jean Chatzky teamed up with Kathryn Tuggle, the HerMoney team, and illustrator Nina Cosford. It's an inviting personal finance compendium, published in May 2022. 'How to Money' covers all the basics, such as budgeting, credit, investing, and taxes, with a refreshingly engaging tone.
Even those who aren’t inclined to read it from beginning to end should find it a useful reference to dip into when they have questions about a particular financial topic. That could go for adults, too.
4.I Will Teach You to Be Rich
Ramit Sethi’s I Will Teach You to Be Rich, released in 2019 is more of an overall book on personal finance. It makes personal finance fun and accessible with his no-apologies look at how to make yourself rich.
Sethi’s book covers the usual topics—credit cards, banking, investing, etc.—but with an irreverent emphasis on actually enjoying money. Sample headline: “How to spend extravagantly on the things you love and cut costs mercilessly on the things you don’t—without making an annoying budget.”
5.The Psychology Of Money
Many of you might have heard or been recommended to read this book. The Psychology of Money is a compelling, quick read that shows how the ability to achieve wealth often depends more on healthy behavioural skills than on intelligence — and that behaviour is often hard to teach. Author Morgan Housel illustrates his points through a series of short stories about people’s money-making decisions.
Housel says the book is a deeper dive into the topics he covered in his widely read 2018 report that bears the same name. Formerly a writer for The Wall Street Journal and The Motley Fool, Housel is currently a partner at venture capital firm Collaborative Fund.
Through the book’s 20 easily digestible chapters, “The Psychology of Money” gives examples of people who succeeded — and those who failed — at accumulating wealth, holding onto that wealth, and making long-term, lucrative investments. He shows how financial decisions are made based on factors like personal history, worldview, fear and pride.
6.The Little Book of Common Sense Investing
This is a book from John C. Bogle that Warren Buffett recommended is perhaps the most important one on this list for entry-level investors. “There are a few investment managers, of course, who are very good — though in the short run, it’s difficult to determine whether a great record is due to luck or talent,” Buffett wrote in 2014, as per the report, adding “Rather than listening to their siren songs, investors — large and small — should instead read ‘The Little Book of Common Sense Investing.’”
7.Rich Dad Poor Dad
This 2004 entry in Robert T. Kiyosaki’s mega-selling Rich Dad, Poor Dad series, co-authored with Sharon L. Lechter, CPA is regarded as one of the best books for teens.
In Rich Dad Poor Dad, concepts include managing assets, managing debt, and moneymaking opportunities for young people. In addition to his umpteen Rich Dad Poor Dad titles, Kiyosaki is also co-author of the 2008 book Why We Want You to Be Rich: Two Men, One Message with former President Donald Trump.
8. The Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life
This book grew out of a series of letters the author wrote to his daughter concerning various things - mostly about money and investing. The book explores aspects such as how to think about money, where traditional investing advice goes wrong, what the stock market really is, phases of your investing life and why they are not always tied to your age, and much more.
9. The Joys of Compounding: The Passionate Pursuit of Lifelong Learning
Written by chartered financial analyst Gautam Baid, The Joys of Compounding discusses principles and theories of finance based on the ideologies of financial philosophers like Ben Graham, Charlie Munger, Warren Buffett and other scholars.
Also, the book elevates the importance of simple and disciplined investing practices, such as value investing, identifying quality stocks, and acquiring insurance, in an individual’s life. With myriad examples, it proves how this very habit can compound one’s finances.
10.Broke Millennial Takes On Investing: A Beginner's Guide to Leveling Up Your Money
Another book that can turn into a great read for young aspiring investors is this one. You can learn the basics of investing, saving, and budgeting from this book while getting to know more about Lowry's personal investing journey. the book offers money lessons such as how to rebalance your investments, whether should you pay off student loans or invest, why investments are for more than just retirement, etc.
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