People often ask me to recommend a good book on financial planning.  That is no small task … just look at the shelves at your local library or favorite bookstore:  there are thousands of titles to choose from.  I find that the most popular books by widely read authors generally deliver sound advice, practical tips, and insightful stories to help you budget, save, and invest to build wealth over the long term.  Choose something in this realm and you won’t go wrong.  Best-selling authors like the late John Bogle, Robert Kiyosaki, Suze Orman, and Dave Ramsey all have wonderful books to get you started with proper financial planning habits.

But if you are looking for something that takes you on a more thought-provoking adventure, exploring financial values, behaviors, and literacy, then I have three timeless classics for you to read or re-read if it has been a while.

First is Your Money or Your Life by Joe Dominguez and Vicki Robin.  This book was first published in 1992 and is a must-read for anyone seeking guidance on establishing a positive relationship with money.  How many of us have found ourselves in this troublesome loop:  I need to spend more of my precious time working to earn more money, which I then spend on things that don’t truly matter.  The authors delve into this troublesome loop and describe ways to break free of its trap.  This book will provoke you to determine what you truly value in life and how you wish to spend your time.  The authors provide a framework to help you align your financial life with your priorities and your time.  Practicing mindfulness toward spending, the authors contend, leads to a greater sense of personal happiness and fulfillment, and may even lead to better outcomes for the planet.  I was in my 30s when I first read this book and it helped me understand my own financial values, and once I had clearer goals, I could then align my savings and spending patterns so that I could better achieve those goals.  I strongly recommend this book to younger folks who are beginning their journey in life and may need some guidance on how to establish a solid, positive relationship with money.

The next book I recommend is The Millionaire Next Door by Thomas J. Stanley and William D. Danko, which is a study of financial behaviors and habits practiced by wealthy Americans.  What I have always liked about this book is that it focuses on the actions people take that tend to lead to financially successful outcomes.  It is one thing to espouse the ideals to create wealth.  It is quite another to put into practice the behaviors that do create wealth.  As the authors discovered in their study, the wealthy folks in America are not necessarily those who live in big mansions, drive flashy cars, and wear fancy clothes.  Stanley and Danko helped dispel the notion that wealthy Americans are largely doctors, lawyers, and others in high-wage-earning professional circles. Indeed, they noted that many of our millionaires are those living in modestly priced homes, driving used cars, and running small businesses.

Granted, this book came out nearly 30 years ago, and it is safe to say that inflation has eroded the value of a million dollars over that time.  Nevertheless, the key point of this book is that frugal habits, practiced daily, along with sound financial decision-making, lead to wealth creation. One need not rely on an inheritance or a lofty-paying job as the means to achieving financial success.  Doing the little things daily, like saving and investing, and – importantly – living within one’s means, are strategies everyone can follow to create wealth over time.  

When I think about the concept of “living within one’s means” I am reminded of Mr. Micawber’s oft-quoted saying from David Copperfield: 

“Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness.  Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”

Charles Dickens’ novels contain a treasure trove of financial planning advice but for my money, none delivers more wisdom than his last completed work, Our Mutual Friend.  If you find yourself on a beach this summer with time to read, dive into this Dickens classic for his satirical take on Victorian-era societal norms.  True, you won’t learn anything about IRAs or dividend-paying stocks at this time, but you will come away with a clearer view of the role money plays in society, be it for good or for corruptive purposes.

I appreciate how Dickens contrasts the lives of the rich and the poor, the haves and the have-nots, the social climbers, and those on a downward spiral. The importance of literacy is a significant theme, and I push this to include financial literacy. As the intricate plot about an inheritance unfolds you will meet all sorts of characters, some with unsavory motives, others consumed by greed, interwoven in a cautionary tale that will leave you wary of shysters and charlatans out to separate you from your money. You know, like all those infomercials on late-night cable TV.

Read Our Mutual Friend for the richness of language and to be reminded that true happiness comes not from the pursuit of worldly goods and social status, but instead from human relationships, love, and spiritual connectivity.  I suppose that message is as timeless – and timely – as ever.

Have you read a good book on financial matters lately?  We’d love to hear about what you are reading and why you like it.  As always, reach out to your Fiduciary Investment Advisor for more thoughtful insights on financial planning.