When my kids were in college, I stumbled across a way to motivate them to read books on financial literacy they normally would balk at; I bribed them. At Christmas time I would give each of them a book I thought would be helpful in teaching them about money or achieving economic success. Inside each book I would place a computer generated gift certificate for a hefty monetary award, redeemable within one year, upon completion of a book report and PowerPoint presentation on the lessons they learned from the book. Occasionally one of the kids would demonstrate irritation about receiving a gift that required work, but I made the monetary payouts large enough that it was very difficult for my starving college kids to ignore.
Friends and clients often asked me for good resources for teaching their children about money. Here are three books I recommend every college student read:
The Richest Man in Babylon: Written in 1926 by George Samuel Clason, this classic book is a collection of stories set in ancient Babylon. Only 144 pages long, it is an easy read, but it is chocked full of timeless financial wisdom. This book teaches valuable lessons on the power of compound interest, staying out of debt, and investing wisely. I read this book 27 years ago after attending a seminar of the same name, and it was this book that inspired me at age 23 to start investing 10% of every paycheck. While I have made a lot of mistakes over the years, starting to invest regularly at 23 was not one of them.
The Wealthy Barber: Currently in its 3rd Edition, this book by David Chilton is in its 3rd edition. The setting of this book is a little more contemporary, and my kids found it more appealing. The story is about young Dave whose wife is expecting their first child. Dave realizes his finances are not up to par. When he asks his dad for some financial advice, his dad refers him to Roy, the town barber and financial sage. Every week Dave stops by Roy’s barber shop for a financial lesson where he learns about credit, savings accounts, buying real estate, funding retirement accounts, and controlling consumer consumption. The story is often funny, as the old codgers who hang out in Roy’s barber shop also throw in their two cents as Roy shares his pearls. At 197 pages, The Wealthy Barber is a little longer than the Richest Man in Babylon, but it reads fast, and the reader will learn quite a bit about personal finance. This is a favorite of mine as a college graduation gift.
Rich Habits: I just finished reading this book two weekends ago, and I have already started using it as a mentoring tool for young adults. Tom Corley spent five years compiling a list of ten habits that wealthy people tend to follow and poor people tend to reject. He uses a story about several underachievers who stop doing their bad habits and start doing the “rich habits.” The rich habits aren’t rocket science, but they are very effective in helping the underachiever reach their full potential. Corley talks about how simple habits like eating less junk food or reading self improvement books or industry journals at least 30 minutes a day can have a huge impact on our future economic success. The habit I found particularly interesting in this book was nurturing relationships. According to Corley, successful people network, send birthday cards, and return phone calls promptly because to most wealthy people, relationships are extremely important. At only 94 pages, I read it in a couple of sittings (and I was taking notes and highlighting), and the story moves easily. This is a great stocking stuffer for anyone you would like to assist reaching their full potential.
Wisdom never goes out of style, so consider giving these books away this Christmas. Who knows, maybe someone’s life will change after reading one of the these books.