According to a recent survey, over a third of people turn to “family and friends” for financial advice. Couple that with the fact that the federal reserve still reports that the average American family not being able to pay off their own credit cards on a monthly basis.
This highlights a interesting contradiction in the fact that most turn to people for financial advice whole themselves have very little financial education themselves.
Financial freedom books are the cornerstone of ones quest to becoming financially free. As Robert Kiyosaki famously says, you must “Increase your financial education.”
You won’t get the same resulting information from watching endless YouTube videos on financial freedom. Rather, reading and absorbing information from what I’ll call “foundational books”.
These books are big on what I’ll call “financial frameworks” which are ways and models on how different people think about money and finances.
Here are 11 books we recommend as a baseline for your quest for financial literacy and financial freedom. I’ve broken them into two categories, books on finances and books on mindset.
- 1 Top Books For Financial Education
- 1.1 1. Rich Dad Poor Dad by Robert Kiyosaki
- 1.2 2. Rich Dad’s Cashflow Quadrant by Robert Kiyosaki
- 1.3 3. Why The Rich Are Getting Richer by Robert Kiyosaki
- 1.4 4. Tax Free Wealth by Tom Wheelwright
- 1.5 5. What I Learned Losing A Million Dollars by Brendan Moynihan & Jim Paul
- 1.6 6. The Wealthy Code by George Antone
- 1.7 7. Principles For Dealing With The Changing World Order by Ray Dalio
- 1.8 8. Killing Sacred Cows by Garrett Gunderson
- 2 Mindset Books For Financial Freedom
- 3 Top One Book Should You Read To Start You On Your Financial Freedom Journey?
Top Books For Financial Education
First are a list of books that contain financial and economic frameworks that are essential to being financially free.
1. Rich Dad Poor Dad by Robert Kiyosaki
This book claims to be the #1 personal finance book of all time and was originally published in 1997. Interestingly, it was intended as a pre-sell book for the Rich Dad company and their board game, “Cashflow Board Game”.
Robert Kiyosaki tells the story of two fathers, one his “rich dad” and the other his “poor dad” and the financial lessons he learned from each one of them and in contrast to one another.
His “rich dad” ironically was a father of a friend of his growing up but was the one who game him his original financial education.
The biggest “core” concept in this book is that the rich don’t work for money, but rather they work to acquire assets that pay for their living expenses. The poor work for money (and in turn exchange their time for money) while the rich have money work for them.
Secondarily, he introduces the concept of how people who pay themselves first use their income from a job to buy those assets, which in turn fund their “liabilities” aka lifestyle.
Investing in your financial education and continually learning from books and mentors is also stressed in the book.
2. Rich Dad’s Cashflow Quadrant by Robert Kiyosaki
Second on this list of best financial freedom books is another one by Robert Kiyosaki titled, “Rich Dad’s Cashflow Quadrant: Guide to Financial Freedom.
This is the 2nd book in the Rich Dad series and I do recommend you read this and the above one in order as this one functions as more of a 201 level guide to financial freedom and goes into a bit of detail on the “how to achieve financial freedom” spectrum.
The most important core concept introduced in this book is the idea of what is known a quadrant from which someone earns income from. Here are the four quadrants:
E – Employee
S – Small Business or Self Employed
B – Business
I – Investor
While those categorizations are useful, most importantly each of those quadrants are taxed very differently, with the proverbial “left hand” side of the quadrant (E & S) paying the most in taxes and B & I quadrants paying the least.
His poor dad and the general education system ironically teaches people to be good employee or small business owners and as a result paying the most taxes.
Contrast that with his rich dad who taught him to grow himself in the B & I quadrants which is where the “rich” earn their money and are not-coincidentally taxed the least.
3. Why The Rich Are Getting Richer by Robert Kiyosaki
Third on this list of financial freedom books is the third one from Robert Kiyosaki titled, “Why The Rich Are Getting Richer”
In order to which to read, this should be the third one in the Rich Dad series that you read because each sequentially builds upon the previous concepts introduced books.
The big concept in this book for me was how the rich use debt in order to become wealthy. There is a difference between good and bad debt and Robert refers to borrowing money from either banks or private investors to buy assets that put cash flow in your pocket monthly.
Ever since 1971 when the United States came off the gold standard, debt IS money. You can borrow it and use it for whatever purpose you want. Mostly recently in 2021 and early 2022, you could borrow money at very low interest rates, locking that payments for 30 years while inflation grew at a faster rate than the interest rate. True financial arbitrage.
4. Tax Free Wealth by Tom Wheelwright
In “Tax Free Wealth“, Tom Wheelright delivers two core financial concepts:
In order to change your tax, you need to change your facts. This means that to really cut your tax liability, you need to change how you are earning your income. Rather than nipping at the fringes, think about earning money from the Business or Investor quadrant rather than from the Employee or Small Business quadrant.
Most of the tax code isn’t how people will be taxed, but rather tax incentives. The government will incentivize (through taxes) behaviors that they want to have happen. The biggest tax breaks come from that. Things like real estate, food, research and development, energy. Generate your income from those and you’ll benefit the most from taxes.
5. What I Learned Losing A Million Dollars by Brendan Moynihan & Jim Paul
Ironically, you’ll learn alot about investing mindset and how to invest from a journal of someone and how they lost a ton of money.
“What I Learned Losing a Million Dollars” delivers the big takeaway here to take your emotions out of investing and think through it instead. You do this before you invest a dime into something by clearly establishing your exit criteria (both good and bad) for an investment.
When you are in the heat of the moment and losing money in an investment, it’s hard to separate your emotions from what is best for you financially. By establishing clear exit criteria, you will limit your losses to a known quantity.
The differences between investing and speculating are also critically laid out here. Eye opening was the fact that most people who think they are investing are really speculating with their money.
6. The Wealthy Code by George Antone
This book basically takes off from there Rich Dad Poor Dad ends and provides a more detailed and tactical view of wealth building.
“The Wealthy Code” delivers the core concept of breaking down wealth into it’s separate components and how they tie into each other conceptually.
Wealth (and in return financial freedom) comes from cashflow. Cashflow comes from Arbitage (or spreads as Antone refers to it). Arbitrage comes from leverage and learning how to use other people’s money (aka good debt).
One of the hardest things to grasp that the author lays out clearly is arbitrage. If you borrow money at 6% and invest it at a 9% return, that creates a spread on your investment. That’s how you can accelerate your path financial freedom.
7. Principles For Dealing With The Changing World Order by Ray Dalio
This is one of the more conceptual books on the list, but lays out Dalio’s framework for how macro economics (and politics) comes in cycles. He put together this framework by studying the great economic powers in the world over the last 500 years.
Once you know about these cycles and where we (in this case the United States is) you can understand what is going on at the macro economic level and use that to your advantage.
For example, he theorizes that the USA is on the decline and China is on the rise. In the context of financial freedom this means that dollars (or cash) on hand isn’t efficient. Taking that one step further you should invest in assets that at least keep up with inflation.
8. Killing Sacred Cows by Garrett Gunderson
This is one of the more contrarian books on this list but also most effective at addressing head on some honestly destructive myths about money and financial freedom that are out there.
In Killing Sacred Cows, the two biggest takeaways were that 401ks and stocks are some of the riskiest investment vehicles that are available and makes people think in terms of a speculating mindset rather than an investment one.
Also the idea that you need to invest in “high risk” financial vehicles (stocks, 401k, etc) in order to garner high returns. Contrast that with his take that reducing risk in investments will increase your returns over the long haul.
Mindset Books For Financial Freedom
Mindset is equally if not a more important aspect of financial freedom. One that is often overlooked.
It’s very contrarian to work towards financial freedom in today’s society and focus as well as a different way to look at what is going on the macro economy and world are extremely critical. Here are three mindset books you should read to start you on your journey.
9. Atomic Habits by James Clear
Atomic Habits by James Clear is a must read for those that want to improve themselves and subsequently their finances.
The core concept in this book is how to position yourself for incremental improvement over time. Making yourself just 1% better each day through establishing and small (hence the word Atomic) habits. Through the maintenance of these and over time, by virtue of such change, you will radically change your life.
10. The One Thing by Gary Keller
The core concept in “The One Thing” is what one thing can you do today that will make things easier or unnecessary? Focus is a critical concept and doing one thing at a time will make you more successful, do less and have more.
Think in terms of this. By doing “less” and applying focus to the one (or maybe handful) of things you want to do each day, you are much better able to move the needle and actually accomplish more.
11. Antifragile by Nassim Taleb
Antifragile is the most controversial book on this list of best financial freedom books because it more so lays out the authors views on what makes things thrive during times of high uncertainty or times of stress.
For example, when you exercise, you are putting stress on your body, but it adapts to that and grows and improves.
As the book applies to financial freedom, the barbell concept is critical to understand.
Picture a barbell, with one side of the barbell being resistant to what the author refers to as negative “black swan events” and the other exposing oneself to potential upside.
How this applies to us is to take adequate financial safety measures to make sure we can withstand a negative downturn (such as 2022 or 2008 with traditional wall street investing) while at the same time be able to capture any potential upside.
Top One Book Should You Read To Start You On Your Financial Freedom Journey?
So, the question is, which book should you read if you are just starting out on your journey towards financial freedom?
I’ll recommend reading Rich Dad Poor Dad by Robert Kiyosaki, as it contains so many core financial and mindset principles.
In the words of Ryan Holiday, one of my favorite authors, it’s a “quake book” in that is shakes you to your core and makes you think about things in a completely different way.