All teachers must at some point in their career invest in their own personal finance education. Whether it’s buying a personal finance best-selling book, listening to a podcast, or reading blog posts, there are many ways to educate yourself. So, here are the Four Personal Finance Books that educators should read!
As teachers, we need to exemplify the self-development, growth, and life-long learner status that we promote so often. If you are looking to walk the walk, and back up the talk, consider these FOUR Personal Finance Books that Educators should read.
***Affiliate links ahead. I’ve personally read and enjoyed each of the following books! Consider using the links if you interested in purchasing any of the following books from Amazon! It helps me afford to run this blog! TIA!***
#1 I Will Teach You to Be Rich by Ramit Sethi
In a list of personal finance books that educators should read, Ramit has to make it. He just has too. His book is too great. It very well might be one of my all-time favorites. Ramit writes an excellent book about personal finance and his Twitter isn’t so bad to follow either (check it out).
I Will Teach You To Be Rich is an easy read because it isn’t like the rest of the genre. Important for after a big day in the classroom- especially in 2020. It isn’t just dry facts and strategies.
Ramit includes many stories and takes the approach of having you question your personal finances, as opposed to lecturing you. This keeps the read light, enjoyable, and still highly informative. You won’t be bored reading this book.
The action steps and approach that Ramit takes to your finances can help you revamp in six-weeks and get on a better track financially in no time. The steps and his “real talk” around finances helps you to be honest with yourself when looking at your own financial situation.
This isn’t a book that will leave you with a false sense of what you can accomplish. Ramit helps you to figure out what is possible for you financially. And to take a hard look at what you will need to do to reach your financial dreams.
As an educator, I love this book because it is so entertaining and easy to read. It is personable, and relatable. This makes I Will Teach You to Be Rich, one of the easier reads for during the school year.
It will not drain you after a long day in the trenches. Instead it will breathe some life into your financial goals. When you see how you can jumpstart your financial situation with Ramit’s steps, some of that teacher stress will start to melt away (just a little bit!).
I am a huge fan of the chapter on the Conscious Spending Plan. You definitely want to make sure you read through to AT LEAST the end of that chapter. It will transform your financial life.
Key Takeaways
- Tackle credit card debt right away
- Avoid fees and find the right banks/brokerages
- Invest early and often
- Automate your finances
- Build a Conscious Spending Plan
#2 Millionaire Next Door by Thomas Stanley
Another great informational book for educators. However, let’s dig into some things I am NOT a fan of.
The Drawbacks of this book
We cannot ignore the fact that this book tends to view women as the frugal homemaker. And men as the primary breadwinner who earns the money to make the millionaire status happen.
It tends to have a view of millionaire families that, purposely or not, does not have a lot of diversity. We could, and probably, should update this book and its research to include a more broad base of individuals and households.
However, the basic tenets of this book still do hold true.
Onto the review!
The Millionaire Next Door has some great research into how wealthy families became wealthy. And it’s research and approach is not focused on the Steve Jobs, Warren Buffets and George Soros of the world.
It’s focused on the “average” millionaire next door, the household, who through diligent saving, controlled spending, consistent investing, and often, business ownership amassed a million dollars or more by retirement (or sooner for some!).
Thomas Stanley’s research in this book and its case studies, promotes that the “average” millionaire is not some stock picking genius, or lottery winner, or some high-income doctor type.
Instead it’s often a household that has lived below their means, chosen a partner who holds similar values, and focused on building wealth over the long term.
Living below your means is one of the most focused on personal finance tips (I definitely do!) besides compound interest. This is because it is, despite its attention, still very much underrated in terms of importance in escaping the paycheck to paycheck cycle and beginning to build wealth.
Stanley shares case studies that explain how their homes, cars, and other major purchases are made with an eye towards frugality, value, and nothing flashy. Stanley’s wealthy families don’t need to look wealthy. And in fact, that is exactly what started him on this path of research, was meeting a couple who didn’t appear wealthy, but clearly had it figured out.
He also explores the importance of being on the same page with your partner when it comes to finances. In many ways, it reads the same way that the adage that a good exercise routine can’t undo a poor diet. In this respect, one finance focused partner can’t undo a poor financial relationship.
As a teacher, Stanley’s book is a great one to pay attention to. It’s the quiet accumulation of wealth, and the lack of outwards displays of wealth, that resonate so much with me as a teacher.
I think there is something to be said for buying a few great work outfits, but wearing just the same 5-10 outfits every week or two.
Or being the teacher with the older model car, despite what your partner may earn.
Humble wealth accumulation is a great lesson to learn here. And it’s one teachers definitely need to pay attention to. We don’t need to compete with our colleagues or try to impress anyone with what we own.
Key takeaways
- Spend less than you earn
- Focus on long term wealth accumulation
- Make sure your relationship is founded on shared values and priorities
- Humble, quiet wealth accumulation
- Automate your investing and don’t worry about it
#3 Millionaire Teacher by Andrew Hallam
This was one of the first personal finance books I was ever gifted. So, I am a little partial to Andrew’s writing.
As a teacher, I love reading and being inspired by others who are “in the trenches” with me and have figured it out. It’s kind of a big deal to me that people know what it’s like when they give me advice (see: my administrator telling me how to teach “The Jungle” by Upton Sinclair). So Andrew’s book is a perfect one for educators looking to improve their finances.
Andrew takes an approach that many personal finance books do not emphasize as point numero uno- personal savings rate. He basically outlines that the path to building wealth starts with how much of your income you need to live. If you can live on less, and bank the difference, you are going to find it much easier to reach financial independence, and eventually crush that million dollar mark.
As a teacher himself, Andrew lays down many money rules that I personally believe are crucial to being successful with your finances. Controlling your spending (especially on big ticket items), investing early and often, avoiding fees on your investments, and controlling yourself when it comes to emotions and investing.
The chapter on avoiding high fee investments, like actively managed funds, is of the utmost importance for teachers.
So often, we trust the advisor sitting in our teachers’ lounge a couple times a year showing us projections and assuring us of his ability to help us retire soundly. We get hoodwinked into paying for high fee 403(b) annuity products.
If you follow Hallam, and invest in low-cost index fund products instead, the percentages saved really adds up over time.
Key takeaways:
- Spend less than you earn (a trend!)
- Avoid high fee investment products
- Control your emotions around investing
- Keep asset allocation uncomplicated
#4 Automatic Millionaire by David Bach
The ONE STEP PLAN to finish rich…. Isn’t quite exactly what it claims to be. David Bach’s book leaves a few holes, but its basic premise is a key step in building wealth and reaching financial independence. Simply, his ONE STEP plan is to make investing and saving automatic.
Much of the investing/saving world can now be automated, and usually, already is. Oftentimes, 401(k) contributions are already automated payroll deductions. So, David’s focus on automation and a simple one step path to being rich, is a little oversimplified.
However, for those who have not automated, or better yet, optimized their automation of their investing and saving. David Bach’s book is a good start to get you inspired to tackle this essential task.
Automation is an important part of personal finances, because it can help you avoid some of the behavioral and emotional mistakes you may make if left to your devices. By automating money to move from your checking account to your emergency fund, you ensure that that account grows each month.
By automating your payroll deductions to your retirement account to be invested, you simplify the process and won’t even feel the pinch of that money being gone.
In his book, he claims that $10 a day invested can make you rich in the end, and the math doesn’t quite support this claim. However, it does seem like a more obtainable goal and if paired with other saving and investing tools, could DEFINITELY help you retire rich.
As you reach the end of his book, he does suggest investing 15-20% of your income, which is definitely more along the lines of what you will need to reach this lofty goal.
To supplement this book, really think about the automation he outlines and how you can optimize and improve upon this system.
Perhaps you aren’t saving 15% of your income, you may want to consider automating scaled contributions and setting your 401(k)/403(b) contributions to increase by 1% each year.
Or perhaps you aren’t very good with rebalancing your portfolio (if you believe in needing to do that at this stage in your investing career), and so you pick using low-cost target date funds as a cheaper option than actively managed funds.
There are plenty of ways that you can expand on and improve the basics that David lays out in his simple, one step plan to be rich.
Key takeaways
- Automate your finances
- Avoid behavioral/emotional traps
- Utilize payroll deductions and automatic transfers
WHY they are the FAB Four Personal Finance Books that Educators should Read!
If you are looking to expand your personal finance knowledge and get on the right path, look no further than the four books mentioned above!
They are great starting points and are not dry and uninspiring. In fact, they are quite the opposite. They combine good informative text with humor, stories from an educators perspective, and knowledge that is directly relatable to educators.
Overall, they preach some of the same tactics to building wealth. They are simple guiding principles that can help you achieve your financial goals without having to learn options trading or crypto currencies.
- Live below your means and increase your savings rate
- Automate your savings and investments
- Invest in low-cost investments like index funds
- Control your emotions around investing and invest for the long term
There is a wealth of other books to continue onto after you have read these four. I asked my Twitter followers and other personal finance bloggers who they would recommend and I got these responses:
What’s your top personal finance book that teachers should read?
— Teach, Money, Life (@money_teach) December 14, 2020
{I’m writing a post about this!}
What do you think? What else should be included on this list? Is there a better set of Four Personal Finance books that all educators should read?!
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