# Which one book for the 19 (+-) year old?



## hboy43 (May 10, 2009)

Hi:

So I have been meandering through the "advice for a 19 year old" thread. I also recently sent a surplus copy of "The Wealthy Barber" and another money management book for the youth demographic, which name I did not note, to the daughter of a colleague of my wife. She is in grade 12 I believe so 17 or 18 years old. It had come to my attention that she had opened a RRSP or TFSA or something recently and seemed to be thinking about this stuff.

So putting the above two things together, I was wondering what people would recommend as "the" personal finance book for someone say 16 to 22 years give or take. If there is some kind of consensus, I would keep a few copies in stock just for occasions as above.

Regards

hboy43


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## couchman (Oct 10, 2013)

Millionaire Teacher is a good read. Likes indes funds which is likely a good idea for a young person as you are learning.


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## Charlie (May 20, 2011)

i think Wealthy Barber is still good. Just scratch out the adoration of mutual funds .

If all you learn is.....manage your money and know where it's going....avoid cc debt....and save 10%, you've got most of the bases covered.


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## donald (Apr 18, 2011)

Honestly I would scrap the books and tell her to go to the internet(just like us)and get her reading mdj or such and from there(provided it catches her interest and she is serious)she can find pf blogs that resonate with her(there seems to be 100s of blogs penned by that demo by females and it I bet she would gain further from this--they also talk about other girly young women stuff lol and if she wants she can step it up a notch further interacting with such blog community members ect ect-like you do here yourself hboy)and it don't cost anything!blogs are the new ''medium'' esp 4 her demo
I am a guy so maybe it wouldn't translate as much with a young female but I like richest man in Babylon(very simple and I liked the setting/characters/message)


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## alingva (Aug 17, 2013)

The Millionaire Next Door, it is not about products but about how millionaires spend money, think about money, spend their time etc.


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## indexxx (Oct 31, 2011)

Charlie said:


> i think Wealthy Barber is still good. Just scratch out the adoration of mutual funds .
> 
> If all you learn is.....manage your money and know where it's going....avoid cc debt....and save 10%, you've got most of the bases covered.


In his new, updated book The Wealthy Barber Returns, Chilton reverses his former advice about MFs and focusses on Indexing. The first book was my introduction to the world of personal finance when it was first released; I feel the new version is even better.


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## uptoolate (Oct 9, 2011)

I think both The Millionaire Next Door and The Millionaire Teacher are both great choices.


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## PrairieGal (Apr 2, 2011)

The Wealthy Barber was the book that got it all started for me, although I was a lot older than 19.

Millionaire Teacher is also excellent.


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## SkyFall (Jun 19, 2012)

I really enjoyed reading The Snowball: Warren Buffett and the Business of Life by Alice Schroeder when I was 18y/o. It really gave me a sense of the principles of a sound business/investing should be without really getting into details to confuse a 18 y/o kid that I was back in the days.

Also tip just like that, if you will continue with Ben Graham books (especially The Intelligent Investor) , like what I did after reading The Snowball (because Buffett refers to it a lot), might I suggest to read before reading The Intelligent Investor you should read The Interpretation of Financial Statements, he explains the basic of a balance sheet, income statement and he makes it easy to understand (a small book) and after reading that it will be much easier to read The Intelligent Investor. I did it backward which is why I am telling this ahhahahahahah enjoy reading you will see that it's through reading that you will learn a lot.


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## Eclectic12 (Oct 20, 2010)

donald said:


> Honestly I would scrap the books and tell her to go to the internet(just like us)and get her reading mdj or such and from there(provided it catches her interest and she is serious)she can find pf blogs that resonate with her ...


I can see suggesting the internet & blogs to go with the book but not in place of a book.

The internet boards can meander all over the place, with no real idea of the spectrum. At least with a book, a quick scan the chapters can layout a path.


Cheer


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## brad (May 22, 2009)

Is The Millionaire Next Door still relevant? Some people don't think so: http://blogs.reuters.com/great-debate/2013/10/16/are-there-still-millionaires-next-door/

The book is 18 years old now, and much has changed. The basic advice is still good, but it's not clear that following it is likely to make many people millionaires anymore.


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## MoneyGal (Apr 24, 2009)

PAW and UAW is an eye-opening, potentially life-changing way to look at the world IMO.


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## Spudd (Oct 11, 2011)

MoneyGal said:


> PAW and UAW is an eye-opening, potentially life-changing way to look at the world IMO.


http://en.wikipedia.org/wiki/The_Millionaire_Next_Door#UAWs_versus_PAWs for those wondering. I was!


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## Toronto.gal (Jan 8, 2010)

^^^ Here is another view: 
http://www.multiplesandmoney.com/investing/favorite-concepts-from-the-millionaire-next-door/


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## Ethan (Aug 8, 2010)

I'd recommend "The Wealthy Barber." I haven't read the sequel, but if it's updated to recommend index funds over mutual funds I have to assume it's a good read as well.


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## Ethan (Aug 8, 2010)

Spudd said:


> http://en.wikipedia.org/wiki/The_Millionaire_Next_Door#UAWs_versus_PAWs for those wondering. I was!


The problem I have with UAW's and PAW's is outlined in the Wikipedia article:

_This metric has been criticized since, for example, a 20-year-old making $50k a year should have a net worth of $100k to be considered an "average accumulator of wealth". That makes little sense since it would take a new graduate years of strong savings and investments to accumulate that amount. The formula fails to take into account compounding interest; younger people up to age 45 or so will generally have much less as a percentage of income than older wealth accumulators due to compounded growth._

In order for that formula to have any meaning, you need to be 10+ years into the workforce, and have had a relatively stable income.


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## Plugging Along (Jan 3, 2011)

My older but money savvy siblings had me reading lots of finance books starting at 16/17 almost against my will, but I am glad they had me do it. 

My thoughts on the books based on what I remember at that age was the following....

Wealthy Barber. I recommend this first because it made it seem easy and attainable. I remember thinking that 'Hey, if a barber could do It, then so could I'. I remember thinking that in order to be rich that you had to be born in the right family or have a lot of luck. This book made me reevaluate that. I think a young adult whose is only just starting to get interested in finance, this was a good start.

Millionaire Next Door. That really made me rethink about the jones next door! and that maybe the rich didn't always show it. I did feel like a failure since I was just out of school and remember thinking that there was no way I would have $100k. I don't think my older siblings understood that it was not reasonable that they were PAWs even though I wasn't. I liked the rest of the booked.

Rich Dad poor dad. I liked it as it made me really think about what could be and challenged my minds. I didn't read it until about 23 and it gave me something to strive for. It didn't tell me how, which my friends found frustrating. As a business major, I understood the fundamentals, but really needed to change my mind set.

In terms of the internet, I think that is great for someone already interested in finance, but the information is all over the place and not , all of it right. It makes it difficult if you don't have the drive to look yourself and don't have some fundamentals. 

The people here tend to be interested. I don't know if the OPs young adult he is referring to is like th CMFers here or more like how I was. 

If more like me, then give them a few books to start.


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## Edgar (Mar 24, 2014)

Ethan said:


> The problem I have with UAW's and PAW's is outlined in the Wikipedia article:
> 
> _This metric has been criticized since, for example, a 20-year-old making $50k a year should have a net worth of $100k to be considered an "average accumulator of wealth". That makes little sense since it would take a new graduate years of strong savings and investments to accumulate that amount. The formula fails to take into account compounding interest; younger people up to age 45 or so will generally have much less as a percentage of income than older wealth accumulators due to compounded growth._
> 
> In order for that formula to have any meaning, you need to be 10+ years into the workforce, and have had a relatively stable income.


Hello Oil Sands


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## MoneyGal (Apr 24, 2009)

The goalposts have moved, yes - but the underlying concept: that you could benchmark your wealth against your peers: is still very valid IMO. Even if you ask yourself, am I an underaccumulator of wealth, or an overaccumulator of wealth? you're onto something. 

The book I usually recommend (not necessarily for a 19 year old, but it is the textbook in the fourth-year undergraduate personal finance course I periodically teach) is this: http://milevsky.info.yorku.ca/published-books/strategic-financial-planning-over-the-lifecycle/

Probably too math-heavy for a non-BBA / Finance major, but sets out the mathematical theories supporting lifecycle finance.


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## blueeyetea (Feb 27, 2013)

No one is recommending "Your Money of Your Life"? 

IMO, there's no other book out there that comes close to making the reader think about the reasons why they're working, earning money, and why they spend it. Personal finance is, well, so personal, that most financial books only regurgigates what's been said before: make a budget, live within your means, save 10% of your salary and invest it. Not that it's not necessary to know and work with those tools, but they never try to address the why people get on the overspending and debt train in the first place, which is often for emotional reasons. If someone is to be successful in living below what they earn, they have to find a way to be happy about it, and this book starts you off in that direction.


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## brad (May 22, 2009)

blueeyetea said:


> No one is recommending "Your Money or Your Life"?


That's a good one too, at least the first part of it. The section that describes how to achieve financial independence was written a long time ago and is no longer valid, but the front section of the book and the tips later on how to live an "inflation proof" lifestyle are timeless and still useful.


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## Ethan (Aug 8, 2010)

MoneyGal said:


> The goalposts have moved, yes - but the underlying concept: that you could benchmark your wealth against your peers: is still very valid IMO. Even if you ask yourself, am I an underaccumulator of wealth, or an overaccumulator of wealth? you're onto something.


My wife is 30, I'm 29, we made $204,000 last year and we have a net worth of ~$400,000. According to that formula, we're UAW's, we'd need to save $212,000 more just to be considered an average accumulator of wealth. When you consider that we're ~6 years into our careers and have nearly tripled our earnings in those 6 years, it is almost impossible for us to be average accumulators of wealth at this stage of our lives. Even if we had a net worth of $612,000 right now, our income is likely going up another $50,000 this year. We would have to save $175,400 of our projected $254,000 in income this year just to keep pace as an average accumulator of wealth, which is pretty much our entire after tax income.

((31 x 10% x $254,000) - $612,000) = $175,400

I know its difficult to make a formula that fits everyone, but I've always been a UAW which bugs me.


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## MoneyGal (Apr 24, 2009)

Which is why you need to include the value of your human capital on your balance sheet. The formula clearly doesn't work any more / for everyone - it's also far too simplistic to really function effectively. If you want more robust formulas, you are going to have to look beyond simple quotients.


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## blueeyetea (Feb 27, 2013)

brad said:


> That's a good one too, at least the first part of it. The section that describes how to achieve financial independence was written a long time ago and is no longer valid, but the front section of the book and the tips later on how to live an "inflation proof" lifestyle are timeless and still useful.


The last edition from 2008 got away from recommending buying treasury bonds. Even the last chapter on investing is rather weak, but before they think of investing, people have to figure out how to save. From a 19 year-old's point of view, they have time and opportunity on their side. It's not impossible to imagine they could be financially independant 15-20 years down the road.


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## hboy43 (May 10, 2009)

Hi:

Thanks for the suggestions. I own "Wealthy Barber" and "Your Money or Your Life". I'll pick up a few of the other suggestions and give them a spin.

hboy43


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## fatcat (Nov 11, 2009)

The Investment Zoo by Stephen Jarislowsky


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## Westerncanada (Nov 11, 2013)

hboy43 said:


> Hi:
> 
> Thanks for the suggestions. I own "Wealthy Barber" and "Your Money or Your Life". I'll pick up a few of the other suggestions and give them a spin.
> 
> hboy43



Not directly related to money.. but i'd highly recommend Robin Sharma's "The Leader without a title". This has helped set the foundation for both personal and professional success..

Good Luck! And good for you for this level of interest at 19!


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## Just a Guy (Mar 27, 2012)

It's tough to think of a single book, because there are many ways to make money. I liked the millionaire next door, but I've found useful information in many books...including kiyosaki's stuff or that Canadian guy who retired at 36 (both of which other people deride). The difference is how many ideas you get out of each book. 

The problem is, if they are business minded (a minority) there are many good books (the emyth revisited), but it's different from stocks (which have many sub-disciplines like value investing, think Benjamin graham, a random walk down Wall Street is pretty good, or trading) and real estate (with a book I've mentioned many times, but wouldn't work for a teen).


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## Siwash (Sep 1, 2013)

couchman said:


> Millionaire Teacher is a good read. Likes indes funds which is likely a good idea for a young person as you are learning.


this is a must read… changed my thinking


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## Spidey (May 11, 2009)

The Wealthy Barber is a good place to start for a young person, but as I remember it the approach was too focused on needing a financial adviser. Other books have other potential problems with their approach. I don't think one book cuts it. You need to read a variety of approaches to refine which investment philosophy best suits your personality. Taking a financial book out per month at the library would be my suggestion.


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## alingva (Aug 17, 2013)

The 4-Hour Chef: The Simple Path to Cooking Like a Pro, Learning Any Skill & Living the Good Life by Timothy Ferriss. This book is how to learn extremely fast. He teaches how to speak foreign languages in several weeks! If you have not heard of Tim Ferriss you should definitely read his books or at least read about him


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## indexxx (Oct 31, 2011)

Spidey said:


> The Wealthy Barber is a good place to start for a young person, but as I remember it the approach was too focused on needing a financial adviser. Other books have other potential problems with their approach. I don't think one book cuts it. You need to read a variety of approaches to refine which investment philosophy best suits your personality. Taking a financial book out per month at the library would be my suggestion.


Dave Chilton changed a lot of his advice (as well as dropping the folksy 'anecdotal story' tone) in the updated Wealthy Barber. There's a lot of great stuff in the new book and I feel it's a must read. Totally agree with taking out all the books in the library as well.


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## HaroldCrump (Jun 10, 2009)

blueeyetea said:


> No one is recommending "Your Money or Your Life"?
> 
> IMO, there's no other book out there that comes close to making the reader think about the reasons why they're working, earning money, and why they spend it.


I have read that book, but I'm sorry to say I was _extremely_ disappointed with that book.
In fact, a 19 year old (the title of this thread), _*must not*_ read that book.

That book is meant for middle aged folks fed up with their lives and their jobs.
The essence of that book is to leave your spouse, sell your suburban home, buy govt. bonds, and live off the income like a hermit crab.
Almost every case study/example in that book ends with the protagonist leaving his/her spouse, moving to the country, and living "off the land".

19 yr. olds should be reading books about inspiring people (leaders as well as business folks) like Mandela, Buffet, Steve Jobs, etc. as well as financial/investing books, not how to retire at 23 and live like a crab, which is what this book is.


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## Toronto.gal (Jan 8, 2010)

+1.

Welcome back Harold!


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## MoneyGal (Apr 24, 2009)

Phew! Someone else said it. I don't need the journey of self-discovery outlined in YMoYL; I'm really clear about why I work and what role money has in my life. Yes, at a conceptual level, for someone who has *never contemplated* why they work and what they are working for, that book is OK. As a roadmap, though? No way.


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## MoneyGal (Apr 24, 2009)

p.s. When YMoYL was written, you could buy 30-year government bonds with a nominal yield of 12%. Anyone checked the yield on a 30-year bond lately? :biggrin:


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## brad (May 22, 2009)

MoneyGal said:


> p.s. When YMoYL was written, you could buy 30-year government bonds with a nominal yield of 12%. Anyone checked the yield on a 30-year bond lately? :biggrin:


As someone pointed out upthread, the book was revised in 2008 and no longer recommends the government bonds strategy.

The basic approach in Your Money or Your Life is to maximize your earnings while minimizing your expenses so you can achieve financial independence and then do whatever you want with your time. It's pretty much the approach espoused and taken, in a more modern setting, by Mr. Money Mustache and other early "retirees."


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## blueeyetea (Feb 27, 2013)

HaroldCrump said:


> I have read that book, but I'm sorry to say I was _extremely_ disappointed with that book.
> In fact, a 19 year old (the title of this thread), _*must not*_ read that book.
> 
> That book is meant for middle aged folks fed up with their lives and their jobs.
> ...


Wow, you're quite prejudiced against it. I've read the book countless time and there's nothing in there about anyone leaving their spouse. I wonder if we're even talking about the same book. 

What about the tools they actually address in the book, like calculating your hourly rate, asking questions about your purchases, minimizing spending, maximizing income and deciding what is enough (money to live on)?


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## hboy43 (May 10, 2009)

blueeyetea said:


> Wow, you're quite prejudiced against it. I've read the book countless time and there's nothing in there about anyone leaving their spouse. I wonder if we're even talking about the same book.


I have not read it recently either but Harold's description sounded a lot like "How to be Free in an Unfree World". I might not quite have the title right. Anyhow, there was much spouse leaving in that book.

hboy43


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## blueeyetea (Feb 27, 2013)

MoneyGal said:


> p.s. When YMoYL was written, you could buy 30-year government bonds with a nominal yield of 12%. Anyone checked the yield on a 30-year bond lately? :biggrin:


And the Millionnaire Next Door got published as the end of the longest bull market in history, when we're unlikely to see that happen again. Is this reason enough to give the advice in the book a thumbs down?


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## alingva (Aug 17, 2013)

Millionnaire Next Door will be relevant 100 years from now. It is not about a bull market, it is about savings money and spending less than you earn. We forgot lessons from the past, people who do not save and have plenty of debt have very bad future.


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