As a Canadian personal finance ‘blogger’, I have read a lot of personal finance books over the past 10+ years. As I reflect on what I found helpful especially for the beginner investor or individual beginning to be interested in personal finance, I came up a list of five must-read personal finance books for Canadians. These books will give you a great boost or stepping stone into topics that are more advanced in personal finance, like investing. I found that these personal finance books are both inspirational and pragmatic.
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Table of Contents
The Wealthy Barber by Dave Chilton
This was probably my first ever personal finance book that I read. I remember reading The Wealthy Barber in my early 20’s. It’s an old book but a good one and a fantastic introduction to the world of personal finance through an easy to read story telling narrative. There has since been a Wealthy Barber Returns but to be honest, I don’t feel it is as good as the first one. It is the perfect book for a those interested in personal finance and investing in Canada. It is perfect because it is very Canadian-centric, and because it is unassuming and not ‘pushy’ like a lot of other personal finance books.
Although it is an older book (it was published in 1995) it is still very relevant. The storyline is about a guy named Roy who is a barber, and he talks to his friends about their personal finance lessons and also imparts some wisdom himself to customers that get a haircut from him. In this book, it goes through important tenets of personal finance, like paying yourself first, investing in RRSPs, minimizing taxes, and being frugal (because when you pay for something that’s $1, it really is something like $2 pre-tax). He does it through an engaging storyline, you won’t get bored reading this book, that’s for sure.
It’s probably still one of my favourite books, especially since the author is so likeable, humble, and funny. He is a great follow on Twitter (there lots of witty tweets from Dave Chilton, very sweet tweets about his father, and he just seems like a very nice guy too).
The Millionaire Next Door: The Surprising Secrets of America’s Wealthy by Thomas Stanley
This is not a Canadian author and hence not a Canadian personal finance book, but I would highly recommend The Millionaire Next Door book for those interested in wealth building, and becoming a millionaire.
This book is a classic in the personal finance sphere. This book opened my eyes to the fact that many millionaires are actually low-key and don’t have to flaunt their wealth to others.
For example, the most common car that millionaires next door to you drive is the Toyota Camry. Obviously, the Toyota Camry is not a very glamorous car, it is not a Tesla or a Mercedes Benz, but it does the job (gets you from point A to point B safely) and doesn’t cost very much relative to a luxury car, for example
This means more money for investing into the retirement nest egg and less time to get there. I learned a lot from this book, especially that people can be very wealthy but not flaunt it or feel the need to Keep Up with the Joneses and show it off.
Thomas J. Stanley detailed seven factors that more likely lead to wealth accumulation:
- Live below your means
- Allocate your time, energy, and money efficiently
- Belief that financial independence is more important that showing off high social status (or basically inner scorecard > outer scorecard)
- Targeting market opportunities
- Encourage self-sufficiency in your children
- Parents did not spoon feed them money
- The wealthy choose the right occupation
The Millionaire Next Door is definitely an easy and inspiring read. After reading it, you might feel that achieving 7 figures is totally doable too.
A more recent book that has been flying off the shelves (I think it sold a million copies and that’s quite hard to do) is Psychology of Money.
Millionaire Teacher: The Nine Rules of Wealth You Should have Learned in School by Andrew Hallam
This book came out in 2011 and there’s been a second edition in 2017. Millionaire Teacher is a bit more advanced as it talks about Canadian investing and investing in index funds to grow your retirement nest egg. The Millionaire Teacher teaches you how Andrew Hallam, a school teacher on a modest and middle income, built a million dollar investment portfolio in his 30’s.
You don’t need to be a high earner to be wealthy- he learned this when his 19-year-old-self met a mechanic who was a millionaire. He was an expat teacher in Singapore but now travels the world as a digital nomad since he’s financially independent. I would say he’s one of the original FIRE trail blazers, especially coming from Canada. In this book, Andrew Hallam even breaks down asset allocation strategies and terms such as P/E ratios.
Instead of just generalizations and fluffy or abstract advice like most personal finance books focus on, the Millionaire Teacher gives you exact how-to’s when talking about investing in the index. It is very practical and shares how to invest in the TD e-series funds so that you can invest in the index. For more how-tos, you can also read my post on how to open, invest, and rebalance a TD e-series fund too.
He came up with an excellent sequel recently, Balance.
Automatic Millionaire by David Bach
Although David Bach has received a lot of flack for his term ‘the latte factor’, I have found The Automatic Millionaire book helpful. It is a bit of an over simplification of personal finance, but the aspect of paying yourself first is so important to building wealth. This is an understatement. Building wealth and personal finance takes discipline, and automaticity helps with discipline when our willpower isn’t the greatest (hey, it’s human nature). I automatically pay myself first every payday to build wealth.
He’s not a fan of budgeting (I’m not either, I liken budgeting to dieting, which is not fun either). He also talks about how the latte factor adds up. There is one excerpt from the book that is memorable to me to this day (10+ years later after I have read it). It is the fact that many people grab a coffee on their coffee break in the morning, and spend e.g. $10 already on that coffee break, but have only worked 1 hour into the work day (for example, they have not worked enough to pay off the coffee or the coffee break eats into that day’s wages). I am very cognizant of grabbing coffee after knowing that information.
I’ve read the other David Bach books, including the one for women (which many women may consider ‘mansplaining’), the one for couples, and the one for Homeowners! They are all basically the same thing with a little twist, from what I recall.
A Random Walk Down Wall Street by Burton G. Malkiel
Finally, the last book I would recommend in my top 5 personal finance books for Canadians is A Random Walk Down Wall Street. It gives you the inside look into Wall Street all the way from when it first started. I review the book here.
I really liked “A Random Walk Down Wall Street“- it was an easy read, and it really does provide you with a nice stroll down Wall street so you can understand why the stock market is the way it is. Money.com states this is one of the two only investing books that you need to read. A Random Walk Down Wall Street walks all the way back into history, and talks about the tulip bulb craze (when speculation was so high and people paid insane prices for tulip bulbs which were rotting), crowd psychology, and how people become irrational.
I would definitely recommend this book especially for anyone who is interested in dabbling in the stock market. I think it is best to know the history involved so you don’t try and repeat it. The author has a good sense of humour throughout the book. I enjoyed his sarcasm in reference to the side of technical analysis (which I have tried to do many years back but it led me to way too much trading and the only person profiting from my day trading was the discount brokerage, from my commissions paid).
Those are the five books I would recommend for anyone interested in personal finance in Canada. Hopefully you find these books helpful as a beginner personal finance aficionado. You’ll be well on your way to 7 figure status in Canada if you get a head start on personal finance and investing with these books.
It’s funny how three of these personal finance books for Canadians have the word ‘millionaire’ in the title! People seem to really want to be millionaires with cash flow in Canada (including me haha).
If you’re interested in the best dividend investing books for Canadians, check out this list here.
If you want to take a comprehensive course on personal finance and investing in Canada, here’s my review of Enriched Academy.
Do you have any favourite Canadian personal finance books that are a must-read?
Have you read any of these titles?
GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.