Best Books on Financial Independence
We reached financial independence in our late 40s. As we write this in early 2023, these are the Financial Independence, Retire Early (FIRE) books we wish we had known about in our 20s and 30s.
There are many affluent people out there who came from little to no wealth and who want to share their stories to help people change the course of their lives. They also want to help people avoid getting ripped off by infomercials pitching get-rich-quick schemes and “financial advisors” selling products that do not benefit the investor.
Here are some of those people and their books! We’ve included video snippets from each of these authors. In contrast to the financial talking heads we often see on television, you should notice the absence of urgency, scare tactics, and sales pitches.
What we appreciate about these books is that they do not promote outsized wealth but rather guide you in determining what is “enough” and teaching simple strategies for getting there. Other recurring themes in these books are psychology, the pervasiveness of unwritten money scripts, minimalism, generosity, and patience. We’ve purposely left out books that teach from a mindset of scarcity, fear, and evangelical prosperity gospel that dominate the mainstream personal finance media.
Our recommendation list is arranged in the suggested reading order, for beginner to intermediate FIRE enthusiasts.
About Us
Darren and I are early retirees who left corporate careers in our late 40s. We are nomadic except for three months a year when we spend time in our tiny home in the Great Plains of the United States.
We spend 40 - 120 days per year thru-hiking in the EU and about 90 days yearly in the Caribbean and Central America. This blog documents our journey to nomadic living and financial independence and the adjustments we’ve made to make the lifestyle work.
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Best Books for New Investors
Some of our earliest information about investing came from sources like Clark Howard, where we learned that we should maximize the corporate match contributions to our 401(k)s. We also learned from colleagues about some of the costs associated with investments and to pick investment funds with low costs and higher returns. By doing this, we more or less put our investments on autopilot through our corporate-sponsored plans.
Over the last few years, several books have emerged on practical ways a diverse audience can achieve financial success. Here are our top recommendations:
The Simple Path to Wealth
The Simple Path to Wealth began as a series of blog posts by investor JL Collins. He has one daughter and wanted to capture for her the simplicity of index investing after losing money on several high-cost investments and real estate.
For someone who wants a simple “set it and forget it” approach to investing - especially folks just getting started out in their teens and 20s, this book is simple.
It’s uncommon that a book increases in popularity years after its release. This book continues to increase sales in the US and internationally in many languages.
In fall 2023, Collins has a follow-up book on the stories of various people who have reached financial independence that we look forward to reading.
Avoid these mistakes to get rich with JL Collins
Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required
Quit Like a Millionaire is an excellent complement to The Simple Path to Wealth.
What we liked about the book was the story of Bryce Leung and Kristy Shen, and Kristy’s path from growing up in poverty in China to retiring in her early thirties in Canada as a first-generation immigrant.
Bryce and Kristy go into more detail about drawing down in early retirement than JL Collins does in his book and funding a lifestyle in alignment with your values.
What is the Millennial Revolution?
Best Book for a Holistic Personal Finance Mindset
I Will Teach You To Be Rich
Unfortunately, mainstream financial media likes to beat up young people on small, inexpensive repeat purchases about money. Before the pandemic, financial media moguls wanted to beat up on millennials who purchased avocado toast and lattes.
Name-brand media moguls are just trying to snag headlines to stay relevant. They know that it would take cutting back 5220 avocado toasts or 15,560 lattes and 30 to 60 years for someone to afford a downpayment on a $313,200 house. Let’s face it—media finance moguls know it’s not about small purchases. Rather, it’s essential to get the big things right and to automate finances to reduce stress.
If you’re interested in investing after reading one of the two books above, this one goes into the details of how to automate not only investments but also how to pay off student loans and credit cards, how to evaluate renting versus buying, and much more. These are the big rocks that are getting in the way of young people trying to accomplish their goals.
Ramit also has a popular podcast called I Will Teach You To Be Rich that we listen to religiously. The guests on his podcast are couples who have some sort of conflict around saving or spending money. It’s not Maury Pouvich-style conflict; it’s the real stuff that Americans don’t discuss within relationships on money! The guests come from many diverse backgrounds and financial situations, from hundreds of thousands in student loans and credit card debt to multimillionaires unable to spend what they earned, even though one has a terminal illness. Check out Ramit’s podcast here.
Ramit’s 10 Money Rules
Best Book to Plan for a 15-Year Corporate Career
Cashing Out: Winning the Wealth Game by Walking Away
This book has a fantastic concept: go into a career with an end date in mind.
Kirsten and Julien Saunders have AMAZING insight into corporate American workplace culture leading up to and into the Great Resignation. This is an excellent resource for college students and young adults.
If you are experiencing roadblocks in your career and can’t figure out what is blocking your next step, or if you are in HR and wondering why your top talent is leaving, there’s a high probability that Saunders touched on it in this book!
About cashing out
Best Book for Optimizing Your Portfolio
We’re Talking about Millions
So, you’ve had a few years of investing under your belt, and you’re interested in adding additional index funds (or low-cost mutual funds) to your portfolio. Perhaps you’ve followed the advice of some of the previous books and have set up simple, straightforward investments and are looking to add some more diversity into the mix.
We strongly recommend Paul Merriman’s materials on low-cost investing and diversification for the do-it-yourself investor. We’re such fans of Paul and his free educational resources that we have modeled our investments after his ultimate buy-and-hold portfolio for our DIY investing.
Paul is passionate about getting free resources into the hands of young and older investors wanting to allocate a modest small portion of their assets to a child or grandchild. In fact, you can download his book for free here as a pdf.
Mange your investments or hire a professional?
Best Book on Money Psychology
The Psychology of Money
The financial services industry wants you to believe that you need many things to be a “financial success.” Expensive items like a degree from select universities, a position in the “right” company, and an aggressive personality to “defeat” your competition.
Morgan Housel is an exception. Morgan teaches with simplicity and storytelling. He digs deep into the psychology of money with awe-inspiring stories about humble, everyday people who amassed wealth and gave generously to others, contrasted by stories of high-rolling, greedy businessmen who died broke or in debt.
In this book, you’ll learn that personal behavior and psychology drive 90% of what makes someone succeed in saving and investing, not the 10% of highly technical bullshit jargon and complex products that the financial services industry would believe is needed to accumulate a nest egg.
Patience, humility, discipline, and low ego create success with the layperson investor, not what financial hand-waving and fist-pumping talking heads drone on about on infotainment news channels.
The psychology of money
Best Book for Entrepreneurs Wanting to Retire Early
Financial Freedom: A Proven Path to All The Money You Will Ever Need
While some people can save and invest over a decade or two and make their way to financial independence by working for someone else, many people realize they cannot thrive in a corporate environment for that long and often decide they want to become their own boss.
Unsurprisingly, entrepreneurship or real estate investing, or a combination of the two, are the typical fast tracks to financial independence for many.
This book is excellent for someone who wants to read a book from the perspective of a millennial with a philosophy degree. The book is thorough, with many tables, charts, and graphs, highlighting author Grant Sabatier’s path from a broke millennial with $2.26 in his banking account to an early retiree.
What does financial freedom mean to you?
Best Book for Real Estate Investors Wanting to FIRE
Set for Life
While we have no interest in real estate or real estate investing, we do know that a lot of people have reached FI through real estate. It seems that nearly one out of every two people in the FIRE community we talk to has used real estate and/or rental properties as one of their primary means to reaching FI.
Real estate hasn’t been part of our path to FIRE, we do enjoy learning about real estate and enjoy listening to Scott Trench and Mindy Jensen on The Money Podcast, a Bigger Pockets podcast.
Here Scott shares his tips and tricks on house hacking, how to be strategic and frugal while investing in rental real estate, and how to maximize your rental income.
How to become “set for life”
In Summary
Yes, most of the financial media is fear and scarcity-focused. And with the polarization of politics in the mix, the financial media can be downright misleading to casual readers to drive profits based on page views and ads.
Becoming financially independent through simple investments and W2 employment is possible, even for people of modest means. Even if financial independence and retiring early are not your goals, these books can help you weather financial storms, such as the loss of one income in a household or needing to step out of work to care for others.
Becoming financially independent requires learning and, more importantly, taking action. The taking action piece will take years and possibly decades, which is why these authors are generous with their knowledge and experience to help other people live simple lives with “enough.”
