Tuesday, 21 Sep 2021

Diana Clement: Lockdown reading to improve your financial knowledge

Time to get your Kindle or Audible app out and brush up on your personal finance knowledge. There’s no time like lockdown for a little learning. Blogs, podcasts, videos and other digital media are all excellent. Getting lost in print is another way and some of my favourite personal finance authors have new books out that you can download online.

Oldies and goodies: Every year more and more personal finance books are published covering many different topics, from general at one end to how to get rich quick in options trading (yeah, nah) at the other. Some are bestsellers for years, such as The Millionaire Next Door, Rich Dad Poor Dad, Think and Grow Rich, The Total Money Makeover and The Barefoot Investor. I can’t speak highly enough of the last one, but all will teach you something.

Some of the 2021 and other recent bestsellers are:

Behavioural economics

Managing your money well starts with taming your brain. Help in that comes from the newish fields of behavioural and neuro economics, which sit at the intersection of economics, psychology and neuroscience. My recommendation is Nudge: The Final Edition, by Richard H Thaler and Cass R Sunstein. In this 2021 final update of his bestselling book, Thaler, a Nobel laureate, encourages readers to reframe choice to trick ourselves into making better decisions in personal finance and life. An alternative choice is Dan Ariely and Jeff Kreisler’s Dollars and Sense: How We Misthink Money and How to Spend Smarter, published in 2017. This is arguably one of the best personal finance books I’ve ever read and had Ariely published a new book in 2021 it would have almost certainly been my number one choice. It’s a stonking read that everyone can learn from. Also look out for any book written by Daniel Kahneman and Nassim Nicholas Taleb.

New Zealand authors

How could I mention great personal finance books without mentioning my colleagues Mary Holm and Frances Cook. I heard Mary talk about her latest book, A Richer You: How to Make the Most of your Money, earlier in the year at an Informed Investor event. She has learned over her many decades of answering readers questions in the New Zealand Herald that personal finance isn’t just about dollars and sense. Life gets in the way. In the book, she pulls out some of the most interesting and poignant letters that she has answered over the years. Being younger, Frances writes a pretty gritty guide to money for Millennials and younger generations called Tales from a Financial Hot Mess. Frances transformed from cash-strapped graduate to money expert one mistake at a time. If you’re in a mess, Frances has probably been there and can tell you how to get out.

Cryptocurrency

On the subject of hot, interest in cryptocurrency has exploded across forums frequented by New Zealanders this year. I’ve been writing about cryptocurrencies since 2014 but decided to refresh my knowledge with the easy to read, yet informative The Basics of Bitcoins and Blockchains, by Antony Lewis. I have the last electronic copy out of Auckland Libraries currently but promise to return it shortly.

Honourable mention

Published in 2020, Morgan Housel’s The Psychology of Money: Timeless Lessons on Wealth, Greed and Happiness comes very highly recommended and has 89 holds before mine on the Auckland Council Libraries. I can only go on reviews and the “look inside” link, which have made me itch to get my fingers on the real thing. The snippets I’ve read suggest an entertaining and insightful read from which you can learn much about what not to do with your money.

Don’t forget you can buy many of these books online as eBooks and audiobooks, or download free from the library, meaning you can start reading today. I was amazed to be able to borrow the best-selling-on-Amazon bitcoin book from the library without having to order and queue.

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