Summertime is a great time to kick back, relax and enjoy a good book or two. Of course, some books are more accessible than others. Still, there’s a wide variety of excellent books out there for anyone who wants to bone up on personal finance, or just read for escapism with a bit of a financial psychology twist. Here’s a short list of books that you might want to consider if you want to read up and feed your mind with information that is both useful and (often) satisfyingly enjoyable.
The Wealthy Barber
by David Chilton
The book is written primarily for people aged 25 to 40, setting out timeless principles for not only investing but also financial planning. The book was first written more than 30 years ago, and Chilton decided it was time to provide a refresh, since much had changed. The new (2025) edition makes considerable references to those changes. They include the introduction of Tax-Free Savings Accounts (TFSAs), First Home Savings Accounts (FHSAs) and Registered Disability Savings Plans (RDSPs), including explanations about how they work and who should use them (hint: almost everyone). Chilton also goes to great lengths to talk about how investing in the 2020s is different from investing in 1990, with the primary difference being the advent of index funds and index-tracking Exchange-Traded Funds (ETFs).
A big part of the homespun humour that appears throughout the book reinforces the nature of “you’ve got this” and “anyone can do this”. It’s designed to be empowering because it shows how a clear understanding of what can be done allows for clear-minded decisions with purposeful objectives. For young people and people who are new to finance, this ought to be the first book they read. Although there are complex products and strategies out there, the plain language ideas discussed in the book will likely cover at least 90% of the needs for 90% of readers.
STANDUP to the Financial Services Industry and Bullshift: How Optimism Bias Threatens Your Finances
by John De Goey (yours truly)
STANDUP delves into the misguided beliefs held by many Canadian mutual fund registrants and offers a series of interactive questions and answers to help readers understand how to get a better deal. Bullshift is about how optimism bias threatens your finances. Drawing on several behavioural biases, the book explores how investors and advisors alike might be naive and complacent about the risks they are taking, largely because downplaying risk is good for business.
Thinking Fast And Slow
by Daniel Kahneman
Of all the books on this list, it is both the most acclaimed internationally and the most challenging read. Kahneman and his research partner, Amos Tversky, conducted a wide range of experiments in what ultimately came to be known as behavioural economics. Like all the books that follow on this list, there is at least a moderate intersection between academic research (heavy reading) and pop culture/pop psychology (fun stuff). There are dozens of examples of how people trick themselves into believing things that are incorrect, often because they proceed too quickly (thinking fast) rather than taking the time to be deliberate and purposeful (thinking slow). Humans don’t like to admit that we are prone to behavioural bias in its various forms, but Kahneman shows that quick mental shortcuts (heuristics) can be the bane of the human condition and that they are ubiquitous.
Predictably Irrational
by Dan Ariely
Ariely is a professor at Duke University. One of the things he shows that is especially fascinating is that behavioural finance not only uncovers a wide variety of human errors, but it does so in a predictable, repeatable fashion. In other words, humans don’t just make dumb mistakes now and again; they often make them over and over for readily explainable reasons that persist even when people are made aware of them. There’s a Canadian bank that says, “You’re richer than you think”. Ariely would counter that “You’re less rational than you think”.
Freakonomics And Super Freakonomics
by Steven Levitt and Stephen Dubner
Levitt is an academic at the University of Chicago, while Dubner is an accomplished journalist (now podcaster). One of the great things about behavioural economics is that there is a plethora of counterintuitive examples that can be explored. Decision-making is fascinating! With topics like “Why should suicide bombers buy life insurance?” and “patriotic prostitutes”, the insights are both fascinating and often unexpected…not to mention hilarious. When asked to write a sequel, the Steves were stumped. They thought there was only so much weirdness to be explored. When their publisher pressed them for a “unifying theme” for all they had uncovered, they finally settled on something compelling: “people respond to incentives”. These books show that incentives are everywhere and often appear in unexpected ways.
Misbehaving
by Richard Thaler
Yet another book about behavioural economics, this one doubles as a history lesson that shows how Kahneman and Tversky got started, who they influenced (Thaler is a disciple) and how the behavioralists would freak each other out with their research and their off-the-wall ideas. The insights are fascinating, and they deal with applications that you might not think of. For instance, there’s a great deal of research about whether professional sports teams should trade up or trade down at the annual entry draft. Thaler shows that it frequently makes sense to trade down, but competitiveness, ego and overconfidence cause teams to strongly prefer trading up.
Nudge
by Richard Thaler and Cass Sunstein
As a person with a background and interest in public policy and administration, this is a book that I love for its real-world applications. It spawned an entire range of “nudge units” in governments around the Western world as “choice architecture” became a phrase that gained credence. The idea is to keep all options available in all instances, but change the way (place, order, positioning, defaults, etc.) of those options to get people to make objectively better decisions of their own volition. The phrase that describes this is “Libertarian paternalism”. One example looks at donating your body parts to science if you die. Where jurisdictions ask would-be donors to opt in, the percentage is low; when they make opting in the default and ask people to opt out, most people don’t bother. The result is that more cadavers are available for research while everyone maintains control over whether their body will be one of them.
All told, there are many books to choose from if you’re looking for (mostly light) summer reading. Warren Buffett is famous for suggesting that investing does not require a massive degree of intelligence. Rather, he says the primary predictor of investing success is a person’s ability to shut out the noise to focus on more timeless principles.
If you want to learn more about those principles, then the Chilton book is likely best. If, on the other hand, you want to explore the dark cavities of human behaviour and inadvertent self-harming foibles, then I would invite you to dive into one or more of the other books. Happy reading!
This article was written by John DeGoey and first published in canadianmoneysaver.ca
