best books for fire that you should be reading
These books helped me to get to where I am today, may they also help you. Happy Reading!
Best books for FIRE and Index Fund Investing that you should be reading
While there are a ton of general money books, and I’ve read most of the personal finance books out there. Both the good, the bad and the downright ugly. Books specifically on FIRE (financial independence and retire early) along with general index fund investing are a little harder to come by. Although this has been changing recently, with the explosion of retail investing over the last 18 months.
At this stage I have had the opportunity to read literally all of the best books out there. So I want to share my pics in terms of which are the best FIRE and Index Fund Investing books out there that you should be reading, and following the same steps in your financial freedom journey. These helped me so much in both my understanding and how to actually apply the steps/advice/plan to my investment portfolio, I hope they do the same for you.
BEST FIRE BOOKS FOR 2021
For starters if you have recently come across the term FIRE and all that it entails and embodies, then these books are by far the best place to start, they will give you the detailed plan you need to achieve your own financial freedom journey. No matter what stage in life you are in, or what your financial situation is (good or bad).
1. The Simple Path to Wealth (Author, JL Collins)
I actually only recently (within the last 2 years) read this book and as the old adage goes, saving the best until last really applies here. This book is a timeless masterpiece, and especially for anyone starting off. It is definitely one of the best books you can read to get you on your way to achieving financial freedom.
The focus of this book is largely on investing and offers a simple road map to achieving financial independence and a secure retirement: Spend less than you make, avoid debt, save “F-You Money,” and invest in stock index funds. The book has become so popular because of JL’s style of writing and how simple he makes often complex steps, and presents them to the reader in an easy to follow manner.
A Simple Path to Wealth is primarily based around the authors series of blog posts that he put together over a period of time on his personal website, all around the topics of stock market investing. These were actually originally intended for his adolescent daughter who was on the road to college. So why don’t I just read his website? Well you definitely can and probably should. But there is so much more additional tips and valuable advice in one concise, accessible book that makes it worth reading. This book has confirmed my overall investing approach, and help solidify my investing plan. As I head for $300k net worth by 30, and on track for $1.5M and financial freedom by age 35.
2. Rich Dad Poor Dad (Author, Robert Kiyosaki)
Okay, no list of the top FIRE and investing books is complete without Rich Dad Poor Dad on it. This all time classic was actually the first investing book I read when I was 18 years old back in Ireland. I literally Googled the term, how to become a millionaire from a poor background and this book came up on a subreddit forum. Isn’t Reddit just the best platform! So I went ahead and ordered it from Amazon, using my hard earned money working as a part time butcher (yes you read correctly) during high school. This book changed my thinking immediately, and looking back actually set me on my path to where I am now. It is a must read in my opinion.
The book in essence is centred around 5 big ideas, told through the eyes of a young boy growing up with both a Poor Dad (his own Dad who worked a typical conservative salaried job aiming to retire after 40 years) versus a Rich Dad (his friend’s Dad, who was an entrepreneur with an entirely different mentality towards money). The examples told through his experience and simple stories are so brilliantly described, it is actually a really interesting, funny and compelling story.
The Five Big Ideas are all centred around:
- The poor and the middle-class work for money. The rich have money work for them.
- It’s not how much money you make that matters. It’s how much money you keep.
- Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.
- Financial aptitude is what you do with money once you make it, how you keep people from taking it from you, how to keep it longer, and how you make money work hard for you.
- The single most powerful asset we all have is our mind.
3. Your Money or Your Life (Authors, Vicki Robin & Joe Dominguez)
I read this book over the last few years, and it genuinely changed my outlook whenever money was on my mind. This book is a classic, and like the others on this list should be on your reading list as you work towards achieving your goal of financial freedom.
Some of the best chapters in my opinion related to Vicki’s mindset strategies, where she focuses on the 4 pillars of financial independence, frugality and living within your means, and also the strategy to follow in calculating how much you are actually earning per hour versus what you are told you are by your employer.
This was a very interesting area of understanding for me. Given I work in Consulting, a large part of which requires me to travel (commuting, flying, packing etc.). I was shocked when factoring in all of these elements, how little I was actually earning per hour versus the figure I see in my pay-check every two weeks. It was eye opening and encouraged me to make positive changes in my life. If you want to calculate your real hourly wage – take a look at real hourly wage calculator, let me know your thoughts in the comments section if you run this versus what you thought you were earning per hour.
This book has sold over a million copies and it is easy to see why. It is a classic that should be learned and applied, regardless of where you are in your current financial freedom or investing journey.
4. “Index Funds & ETFs” (Author, David Schneider)
This is a great book for anyone who wants to truly understand what index funds and ETFs are as investment vehicles; their origins and predecessors. It’s not an investing or life philosophy book, but it also isn’t too dry and analytical. It’s a great read for anyone who already believes in the FIRE approach but wants a better understanding of how the instruments themselves work. This is a great read for someone who already has the foundations in place and wants to delve a bit deeper.
When I started out, I didn’t even know what an Index Fund was, let alone the average person can invest in them with a click of a button and on average outperform the best hedge funds out there. Hence why the likes of the Omaha Oracle himself (Warren Buffett) is such a proponent of index fund investing.
I found this book really interesting and ultimately I used it in terms of how I split my portfolio and how I invest. It takes into account the history, structuring, and theorizing behind index funds and ETFs, and lays bare the inner workings of its profitable industry. It will enable you to develop a neutral view, on index funds and ETFs so that you can cut right through the haze of marketing ploys.
If provided both the basics and the next level of detail into
- What Index Funds are and how they are formulated
- How standard index funds differ to index ETFs (Exchange Traded Funds)
- What advantages they have over other mutual fund products
- A brief history of the industrial complex behind them
- The business behind creating indices, such as S&P Dow Jones or MSCI indices
- Their theoretical and practical flaws and shortcomings
- The flaws in the logic underlying many index investment plans
- A detailed plan how to make the most out of these products
- How to apply the 80/20 investing approach to index funds investing with several examples and case studies
I implemented a lot of the above knowledge during and directly after I read this book, and it has contributed to me achieving great returns (albeit in a bull market) over the last few years.
5. Set for Life (Author, Scott Trench)
The author Scott is the CEO of Bigger Pockets, which is a widely popular real estate investing community. In this book, Scott walks you through the key three phases to follow in accelerating your journey to financial freedom and independence. While it is not specifically on index fund investing, Real Estate should be a large part of any investment portfolio, especially one with the aim of retiring early on passive income.
This book primarily focuses on house hacking and real estate, the author lays out a detailed step by step plan for how you can strategically use the real estate asset class to make working optional.
The book is primarily directed towards folks who are millennials and single, I think the creative ways he describes and communicates about money makes this a must read for anyone, regardless of age or relationship status, starting their financial independence journey.
6. Random Walk Down Wall Street (Author, Burton Malkiel)
Burton Malkiel also commonly known as the father of Index Funds – evaluates the full range of investment opportunities, from stocks, bonds, and money markets to real estate investment trusts (REITS), home ownership, and tangible assets and commodities such as gold and collectibles. This book is an all time classic and should be on your reading list for achieving FIRE.
In my opinion, it’s a must read for anyone thinking of starting their own investment portfolio and finally making the plunge into the stock markets, no matter how large or small that plunge is, Malkiel describes and advises on an easy step by step plan to managing your own portfolio, a lot of these steps which I follow today. The book can be used as an investing guide for the average retail investor, so you understand what you are getting into and more importantly why. And also be sure you are avoiding the common mistakes of any beginner investor.
It’s also written in an interesting and at times humorous style which I found made it an enjoyable read especially for a book classified in the FIRE/Investing category. I hope you enjoy reading it as much as I did.
Let me know in the comments of your favourite investing, FIRE books and why. I will take a look and add to this list and update going forward.
As always, I hope you find some of these areas helpful in your own journey to whatever your goal is. Make sure to follow along on my journey on how this thing called life and my goal of financial freedom works out, I keep my net worth updated here. Sign up to my newsletter, you will receive some great free content such as a first steps to financial freedom guide and an overview of the easiest sites/places to invest, While also staying up to date on my latest blog posts to show you the path forward. I post at least weekly and no spam, I promise.
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Catch you soon,