5 Books Recommended by Financial Advisors That Will Help You Build Wealth

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While financial advisors take courses or certifications to become adept at offering financial advice to their clients, many also learn important lessons from great books on the subject, often passing on this financial education to their clients.

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Financial literacy is, unfortunately, an area of ​​weakness for many Americans. According to the 2024 GOBankingRates Financial Literacy Survey, more than a third, 36%, of Americans are not up to date on their financial literacy.

To help complete your financial education, these Experts offer some of the books they believe will help you build wealth and why.

‘The Millionaire Next Door’ by Thomas J Stanley and William D Danko

According to Chad Gammon, a financial planner with Arnold and Mote Wealth Management, “The Millionaire Next Door” demystifies wealth. “This shows that many millionaires are not flashy, but rather disciplined in their financial habits,” Gammon said.

It also provides practical advice, he said, and practical tips that anyone can apply to build and sustain fortune. “One of the main messages is to spend less than you earn. This allows for consistent saving and investing, which is crucial for building wealth over time.”

Additionally, Gammon said, the book emphasizes the importance of investing in areas you are familiar with and understand rather than chasing the latest trends or “hot” investments.

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‘Total Money Makeover’ by Dave Ramsey

Joseph Carpenito, financial planner at Materetsky Financial Group is a “SmartVestor Pro” – a financial advisor recommended by the Dave Ramsey Organization for potential clients seeking a new financial advisor relationship. He admitted that his answer is a little biased, but true.

“The reason I always recommend this book is that it helps the reader build a basic understanding of wealth building,” he explained. “After reading this book, you can expect to have a general foundation of financial literacy, as Dave emphasizes fundamental practices in several areas that together comprise a solid financial plan.”

The most important takeaway, he said, is Dave’s view on paying off debt through a method often called the debt snowball. “This approach focuses less on the pure math and more on the psychological aspect of paying off debt, creating small victories in your mind along the way.”

“I believe everyone should read this book if they are struggling with basic financial planning concepts,” said Carpenito.

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‘The Simple Path to Riches’ by JL Collins

Alec Kellzi, certified public accountant (CPA) at Online IRS Extensionrecommended “The Simple Path to Riches” because, he said, “[It] eliminates the complexities that often surround personal finance advice.

He said: “Collins advocates a straightforward approach centered on living below your means, minimizing fees that hurt returns, and harnessing the immense wealth-building power of consistent investing in low-cost index funds over decades.”

He feels Collins’ philosophy boils down to avoiding get-rich-quick gimmicks and embracing the simple mathematics of wealth.

Some other key findings include:

• Small adjustments to savings fees can have a profound impact on long-term wealth accumulation, thanks to compound interest.

• It is important to avoid the lure of poor performance by avoiding actively managed funds and embracing the simplicity and lower costs of total stock market index funds for steady wealth growth.

‘The Intelligent Investor’ by Benjamin Graham

Justin Godur, CEO and founder of Maximum capitalrecommended the classic “The Intelligent Investor,” saying it not only shaped his financial strategies but was also a key recommendation for his clients.

“What sets ‘The Intelligent Investor’ apart is its focus on value investing – a methodology that emphasizes buying undervalued stocks that represent a bargain compared to their intrinsic value,” he said.

Two tips he took away are:

• The allegory of “Mr. Market” to represent the volatility of the stock market. This taught him and his clients to view market fluctuations as opportunities rather than threats. For example, when the market is down, it may be a good time to buy quality stocks at a discount rather than panic selling.

• The margin of safety is another principle that he found useful and involves ensuring that there is a significant difference between the price paid for a share and its estimated real value. This reserve protects against unforeseen crises and market irregularities.

‘Rich Dad, Poor Dad’ by Robert Kiyosaki

Ben Klesinger, founder and CEO of Dependent insurance group and Helping Hand Financial, enjoy this popular book that continues to sell decades after its first publication date.

“The book emphasizes the importance of financial literacy and investing in assets that generate passive income,” he said. “One valuable strategy I took away from this book is acquiring income-producing properties – a concept deeply intertwined with my real estate and financial experience. Implementing this strategy has been transformative for clients looking to create a steady stream of passive income.”

Whether you read these books or find others on your own, increasing your financial literacy can go a long way toward building wealth.

Survey Methodology: GOBankingRates surveyed 1,008 Americans ages 18 and older from across the country between March 26 and April 1, 2024, asking twenty different questions: (1) Lack of financial education caused you to struggle with your money ?; (2) What current money topic is most confusing to you?; (3) Which financial expert do you trust most to teach you the basics about money?; (4) Since the start of the pandemic in 2020, do you think you have become smarter with your money?; (5) What bad financial habits did you learn during your childhood? (select all that apply); (6) What bad financial habits did you develop in your early adult years? (select all that apply); (7) What bad financial habits have impacted your marriage/partnership? (select all that apply); (8) What bad financial habits do you worry about passing on to your children? (select all that apply); (9) Which aspect of buying a car do you find most challenging/confusing?; (10) What aspect of buying a home do you find most challenging/confusing?; (11) Which aspect of debt repayment do you find most challenging/confusing?; (12) What worries you most about retirement planning?; (13) What best describes your feelings about investing?; (14) How much did you save last year?; (15) How much debt did you acquire in the last year, not including mortgage debt?; (16) Do you currently bring in enough money to cover your bills?; (17) What do you think about your financial situation?; (18) What best describes your feelings regarding managing your money?; (19) What is your monthly car payment?; and (20) How much income do you think is needed for a middle-class family to live comfortably? GOBankingRates used the PureSpectrum research platform to conduct the research.

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