With one of the fiercest election cycles in recent memory behind us, I’m willing to bet we’re all looking forward to relaxing, recharging and reflecting this Thanksgiving. And while you’re vegged out in front of the football game or nursing a food coma (we won’t judge if you go back for thirds), why not make a little headway on your winter reading list?
Here are five reads our advisors recommend.
1. “The Millionaire Next Door” by Thomas J. Stanley and William D. Danko
When you think of the word “millionaire,” what’s the first image that comes to mind? If you’re envisioning a designer-suited mogul sitting comfortably in a private jet, this best-selling classic is sure to turn your assumptions inside out. Framed by the research of William Danko and the late Thomas Stanley, “The Millionaire Next Door” identifies seven traits that show up time and again among those Americans who have racked up substantial wealth — and the findings are pretty astounding.
“[In reading the book], you quickly find out that these millionaires don’t live in fancy homes or drive the most luxurious vehicles; rather, they live well below their means and are disciplined savers,” says Jordan Lochner Mills, CFP®, senior financial advisor in Minneapolis. “The concepts Stanley and Danko describe are reminiscent of the values my grandparents instilled in me at young age — values that still impact my life today.” Once you’ve finished the book, you might consider passing it down to the younger members of your family; good financial habits are gifts that will pay dividends over time.
2. “The Investment Answer” by Daniel C. Goldie, CFA, CFP® and Gordon S. Murray
These days, it’s hard not to be distracted by every breaking news alert that floods your email inbox, iPhone or tablet. The constant, sometimes-deafening noise of the financial media is certainly hard to ignore, but giving it credence can be detrimental to your ability to maintain a long-term investment strategy.
If you could use a little warm-up on these practices, especially in light of election speculation, then look no further than “The Investment Answer,” a poignant, jargon-free piece outlining the crucial building blocks of a well-conceived investment strategy. “It’s an excellent primer on the choices we all have in managing our investments effectively, emphasizing thoughtful planning, diversification, tax management and the importance of keeping program costs low,” says John Bussel, principal, chief investment officer and regional director, based in Miami.
If you’re hoping to spark some engaging after-dinner conversation, “The Investment Answer” is sure to resonate with your friends and family members as well, whether they’re new to investing or simply looking for fresh perspective, says Blake Faust, CFP®, associate advisor in Minneapolis. “I’ve had clients enjoy [the book] so much that they’ve gone out and purchased extra copies for their entire family.”
3. “The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money” by Carl Richards
At first glance, the title of this book may be a bit off-putting — but just hear us out. In “The Behavior Gap,” author Carl Richards — who is behind other give-it-to-you-straight works like “The Index Card” and “The One-Page Financial Plan” — takes readers on a deep dive into the basic, human motivation underlying most of our financial decisions: emotion. From investing anxieties to the battle between spending and saving, Richards dispenses useful, actionable advice that can help you gain a better understanding of why you do what you do and refine potentially risky behaviors, as they relate to your money.
“Much of what the book discusses is common sense, but you will likely find some personal ‘a-ha!’ moments in each chapter,” says Nate Wenner, CPA, PFS, CFP®, CIMA®, principal and regional director in Minneapolis. “It’s a straightforward read, elegant in its simplicity, with engaging visuals that distill important financial concepts into easily digestible, bite-sized pieces.” Sign us up!
4. “The Richest Man in Babylon” by George S. Clason
Most people wouldn’t expect a 90-year-old book on personal finance to be relevant to our world today. By that measure, “The Richest Man in Babylon,” written by the late George Clason, truly defies expectations. Set in the ancient city that inspired its namesake, the book begins with the tale of Arkad, who has grown to become the richest man in Babylon due to his reliance on a few tried-and-tested money principles: paying himself first, living within his means and building a nest egg, among others.
When pressed to explain the secret to his success, Arkad replies, “I found the road to wealth when I decided that a part of all I earned was mine to keep.”1 It’s just one of the many reasons why this novel has been a permanent fixture on our reading list for years now; its message just gets better with age.
5. “Decisive: How to Make Better Choices in Life and Work” by Chip Heath and Dan Heath
Around the holidays each year, everybody seems to be gung-ho on making a change to do better: to save more money, to exercise more, to stop and smell the roses more often. All of these “somethings” require a person to execute, or make some sort of decision to stop or start the cycle. In “Decisive,” authors Chip and Dan Heath — two brothers, both professors at prominent universities — guide readers through the sometimes-intimidating task of making a decision, whether it’s a choice that requires a massive life renovation or simply deciding not to hit the “snooze” button on your alarm every morning.
“You probably make smart decisions on a daily basis and know how to make them,” says Wenner. “But this book brings an insightful introduction to the biases that can ensnare our thought processes,” which can trip up even the most skilled decision-makers. In introducing those obstacles, the Heaths also spell out solutions and steps you can easily apply at work, at home and even to your finances. Who knows? After reading “Decisive,” you might follow through with your 2017 resolutions after all.
Already powering up your Kindle? Have a favorite read you’d like to share with our team? Tweet us your picks @HewinsFinancial, using the hashtag #FiveFinanceReads — we’d love to hear what books inspire you to live your best financial life.