Given the sheer volume of personal financial planning books on the market, you’d think your average Canadian would have a better handle on their finances. Unfortunately that seems far from the truth.
So it’s a wonder that 32% are nearing retirement without any savings whatsoever (woah!).
So which books do the best job of guiding you towards long-term financial security? We’ve rounded out our top-6, all-time greatest, Canadian personal financial planning books.
In The Wealthy Barber, readers learn the basics of personal finance through storytelling – a very unusual and refreshing strategy in the world of finance. In this short novel, three young adults, feeling confused about how to manage their money, visit their local barber to learn about how he was able to build significant wealth despite having a modest salary. The barber then shares his secrets to success going beyond a monthly budget, which involved things like saving ten percent of his income, investing wisely and saving for retirement starting at a young age.
This book is for you if you’re looking for a simple introduction into money management and like the idea of reading a story instead of a more traditional how-to self-help book. It’s easy (and arguably even enjoyable) to get through. You’ll also enjoy this book if you’re naturally skeptical of anyone peddling get rich quick schemes as the barber focuses on slowly and steadily building wealth over a lifetime.
However, if you already consider yourself a financially savvy person or are bothered by slightly less than stellar storytelling and character development, you may find this book too simple or contrived.
If you do enjoy reading the Wealthy Barber, you can follow up with the sequel, The Wealthy Barber Returns, which has also received great reviews.
Strategic Financial Planning Over the Lifecycle takes a more academic approach to addressing personal finance topics (retirement, investment, risk management, etc.) by providing guidance through the lense of the lifecycle model of financial economics. What’s that?
In simple terms, the lifecycle model is a theory that describes how people strive to reach the right balance between saving and spending in order to maintain a certain standard of living throughout their entire lifetime. If you spend too much up front, for example, you’ll live a less lavish lifestyle in retirement and vice versa. This book shows how to find that ideal balance.
If you’re a numbers-driven, analytical thinker who’s already familiar with personal finance and enjoys economics you’ll get a lot out of this book, as it’s based on rigorous academic research.
However, if the idea of reading a personal finance textbook doesn’t sound fun to you, you may find it to be overwhelming and a bit hard to get through. It’s very academic, filled with charts, graphs and formulas to support its claims.
While not an explicitly Canadian personal finance book, In The Millionaire Next Door author Thomas J. Stanley takes a unique approach to exploring the art of accumulating personal wealth that applies well to the Canadian reader as well. Rather than providing hard and fast rules, he instead looks for patterns in the behavior and attitudes of the wealthiest Americans and describes the seven factors that they all have in common. In general, most don’t live flashy or audacious lives, but instead spend frugally and save wisely. They also tend to work for themselves, drive used cars and have financially independent children, unlike what is typically shown in the media. Peppered with interesting statistics and anecdotes throughout, this book clearly articulates it’s thesis – that living below your means is the fastest and most surefire way to build significant wealth.
You’ll really enjoy this book if you appreciate learning about the attitudes, motivations and behaviors of specific groups of people. Stanley clearly outlines the seven most common characteristics that are found across most millionaires, making them easy to understand and emulate.
However, if you are looking for a book outlining specific investment advice, this is the not the book for you. You may also find this book less enlightening if you are already well-versed in personal finance, as the findings are logical and similar to what is taught in other personal finance books.
In Wealthing Like Rabbits, readers get a primer in personal finance – but with jokes this time! Author Robert Brown uses pop culture references (think Star Trek, Zombies, Nintendo!) and his biting wit to make explanations about topics like saving for retirement and managing debt simple and engaging to read.
This is the book for you if you find yourself cringing at the idea of spending free time reading about personal finance or have this nagging feeling that you should care about personal finance but don’t yet know how. Brown does an outstanding job making an often intimidating topic funny and approachable. Also, this book has the added benefit of being written by a Canadian for Canadians, so the terminology and examples used are relevant and helpful like the ongoing debate of RRSP vs. TFSA.
However, Wealthing like Rabbits is definitely targeted to young adults with very little background and experience in personal finance. Those who are already familiar with the basics may not find substantive value in this book, other than few good laughs.
In Millionaire Teacher, Andrew Hallam, a schoolteacher, shares his strategy for building a million-dollar portfolio on a modest teacher’s salary. He walks readers through his nine rules of wealth, among them building a responsible portfolio with low-cost index funds, starting to invest young and living below your means. These are money management principles anyone can use – from the those just getting started to those who are already financially savvy. In fact, he claims that by following in his path, you can spend less than 90 minutes per year on developing and maintaining a successful investment strategy.
Hallam is a down-to-earth, likeable author who explains his investment strategy in simple terms that are easy to follow, especially if you’re intimidated by personal finance topics. His story is inspiring and one that many will find relatable. He also just recently updated his book in 2017, so it’s current.
However, Hallam strongly believes in the power of index funds to build wealth and does not advocate for stock picking. If you’re more interested in selecting individual stocks to invest in, this book may not be for you.
In Beat the Bank, Author Larry Bates, entertains readers by highlighting how the financial industry has capitalized on the combination of misunderstanding of fees, a sense of deep loyalty for the big banks, and misplaced trust by charging Canadians the highest investment fees in the developed world.
In the early chapters, readers start to understand where the book’s inspiration came from. That ‘aha’ moment came around 2013 when Mary Bates asked her ex-banker brother why her mutual funds were not performing up to snuff after so many years of investing in the market. Fast forward with some fact checking and Larry figured out why – her mutual fund fees were 2.3% every year, eating up nearly 30-40% of her investments and costing her tens of thousands of dollars. Unfortunately, this is the reality for too many Canadians.
If you’re looking to dig a little deeper into the Canadian mutual fund industry, learn how the big banks occupy a position of authority, and find out about simple ways to prepare for your financial future then stop right here – you’ve found your book.
You work hard for your money, you sacrifice to save your money, and you risk your money in the market over your lifetime, so why let the big banks abuse your trust and pocket your hard earned savings?