Best Financial Books for Doctors
This post will replace my “Recommended Books” link that I’ve had at the top of the site for years. Unfortunately, Amazon dumped their “aStore” concept that I had been using, forcing me to do the work to maintain the list manually. That’s okay, it gives me a good reason to update the list. In case it’s not obvious, all of these links are “affiliate links” and if you buy anything through Amazon after clicking on them, we get a tiny percentage of it at no additional cost to you.
How the List Works
I have divided the list into categories, and you can get to a given category quickly by simply clicking on the links below. Or you can stroll your way through the entire list. In any given category, I have placed the book I think you should read first at the top, and then the others in descending order of usefulness. But any book on the list is a great book. In fact, there are many great books that aren’t on the list, as we will soon see. Particularly excellent books that I think should be read first have an asterisk by them. My criteria? Accurate, high-yield, entertaining, and current, in that order.
If you’ve never read any financial book, I recommend you read one from each of the following categories: Doctor specific, personal finance, investing-basic, and investing- behavioral as your initial financial education, and then try to read one financial book a year (and follow the blog) as your continuing financial education. This list is going to be a “living” list, in that we will continually add books recommended by readers in each category. If you’d like to recommend a book, list it in a comment with 1-2 sentences about why high-income professionals should read it as part of their continuing financial education and unless we think the book is terrible, we’ll add it to the list.Doctor Specific
Were you really expecting another book to be at the top of this list? It’s here not only because I wrote it, but also because it is the best-selling, highest-yield book that I know of for someone reading this post. Almost 4 years after publication it is still number 2 in its category. It has 713 Amazon reviews, 98% of which are three stars or better. Why is it so good? Mostly because it was crowd-sourced from readers of this site. The original version wasn’t nearly as good, I assure you, until I sent it out to a couple dozen of you and had it really tuned up. I reviewed it here. You can read a sample here. Or you can just buy it. Tell you what, if it wasn’t worth the money, send me the book and I’ll give you a full refund. In four years of offering that guarantee, I have yet to have someone take me up on it.
Reviewed here. This is my favorite physician-specific personal finance book not written by me. Written by anesthesiologist Jeff Steiner, it is written in the review book format familiar to any physician who has ever taken the USMLE. It is packed with high-yield material. Its material on “treating” student loan debt and moonlighting in residency is particularly excellent. If my book is too long for you (at about 4 hours), read Jeff’s. As one reviewer puts it, “a thoughtful and well-constructed overview of basic finance, written specifically for young physicians, most of whom have never taken a finance course and have minimal real-world experience.”
Reviewed here. If my book was too short for you, you might want to consider this one by cardiologist Robert Doroghazi. This is one of the few in the genre that ever had a second edition. It is long, written in tiny type, and packed with his own personal anecdotes and quotations. Nevertheless, its sections on frugal living rival those of The Millionaire Next Door. The book breaks down a bit in the investing sections where tactics like individual security selection and market timing appear but overall is well worth a read.
This one by surgeon Cory Fawcett is short and focused on just one topic, but it’s an important one. I read the whole thing on a flight between Houston and Little Rock, so if you can’t get through this one, well, I guess there’s no hope for you. Think of it as “Dave Ramsey for Doctors, but without the bad investment advice.” Cory’s other books are also pretty good, including The Doctor’s Guide to Starting Your Practice Right and The Doctor’s Guide to Smart Career Alternatives and Retirement. At the rate he’s pumping these out, there will be another one by the time this post runs!
Reviewed here. This is the best of the genre that is written by a financial advisor. The writing team also happens to be the main partners of Larson Financial, perhaps the largest physician-specific financial advisory firm in the country. While at times it seems a thinly-veiled advertisement for the firm, and briefly delves into their controversial Variable Universal Life Insurance investing strategy they have taken a lot of flack for on this website, the vast majority of the book is useful and well-written. The chapters on education planning, tax planning, estate planning, and asset protection are particularly well done. The chapter on practice management is also quite unique in the genre. There are now dozens more of these physician-focused books than there were when I started this website 6 1/2 years ago, but you’ll likely be better off reading some of the other books on this list rather than two dozen books written about the handful of financial aspects unique to doctors. I get sent about a half dozen a year to review. It isn’t that they aren’t good, it’s that the majority are written by financial advisors specializing in physicians trying to market their practice and the others tend to just repeat what has already been written in the books above.
Recommended by readers:
To Be Added
I know the title says it is an investment guide, and that’s true, but it contains some of the best personal finance tips I know of. This is one of the few financial books out there that actually elicited some laugh out loud guffaws from me. He’s a great writer. He’s been revising this book for decades, but it’s still a classic.
This one is far from current, published originally back in the 1990s. I don’t put books on this list just because they’re “classics” (you’ll notice little Graham, Bogle, or Malkiel for instance) but this one has a message that every doctor needs to get through his thick skull and I’ve never seen it done better than in this book. My sister read this book and about halfway through asked me, “Do I really have to read the rest?” I asked, “What’s the message of the book?” She said, “Being rich isn’t making a lot of money or having a lot of stuff, it’s having a high net worth and most people who look rich aren’t actually rich.” There are a few methodological flaws in the “study” in the book, but every person in America needs to read enough of it to understand its main message. It even has a nice chapter specifically about doctors. If you find the fact that most (all?) of the millionaires in the book are male off-putting, consider reading Millionaire Women Next Door instead. Same message, different gender.
Want something comprehensive? This one by Eric Tyson will fit the bill. The first financial book I ever read was by Tyson, but it wasn’t this one. I should have read this one instead. If you don’t know the stuff in this book you’re a sitting duck on Wall Street AND Main Street.
It was a tough choice between this one and Your Money or Your Life. This one is the best book I’ve read on how to spend your money in a way to maximize your happiness. A great philosophy and lots of practical tips. Reviewed here.
This classic by David Bach includes some ideas that are critical for everyone to understand. The main one is that becoming a millionaire isn’t complicated. That doesn’t make it easy, but you really only need to make many smart financial decisions one time, and then leave them on automatic mode. That idea can be applied to personal finance, investing, insurance, and other financial topics. For the person who doesn’t enjoy financial tasks but knows she needs to do them, this book is for you.
Recommended by readers:
This very short volume by William Bernstein subtitled How Millenials Can Get Rich Slowly is perhaps the most high-yield resource on the topic out there. It is so good you should read it twice and short enough that you can easily do so. There are five hurdles for investors to get over:
- Hurdle 1: Even if you can invest like Warren Buffett, if you can’t save, you’ll die poor.
- Hurdle 2: Finance isn’t rocket science, but you’d better understand it clearly.
- Hurdle 3: Those who ignore financial history are condemned to repeat it.
- Hurdle 4: We have met the enemy and he is us.
- Hurdle 5: The financial services industry wants to make you poor and stupid. Each section also includes a homework assignment (usually another book you should read.)
A classic written by three prominent Bogleheads. This is one of the best no-nonsense tomes on investing. Read this to not only understand why Bogleheads call Jack Bogle “Saint Jack”, but also to learn how to keep Wall Street’s grubby mitts off your nest egg.
I’m a sucker for Bill Schultheis’s climbing stories. This book is part investing and part personal finance, but mostly a great philosophy on life and money. Even my dad got through this quick read.
Written by Doctor William Bernstein (a neurologist), this is a must-read for any physician investor. He speaks your language, and you can trust him. Bernstein’s Four Pillars of Investing was a huge influence on my investing. I consider this the updated and simplified version.
Recommended by readers:
- The Little Book of Common Sense Investing
- Simple Path to Wealth
- Simple Wealth, Inevitable Wealth
- Elements of Investing
Zvi Bodie’s guide to safe investing. Reviewed here. Think you need a risky portfolio? Here’s the counter-argument.
Subtitled The Definitive Book on Value Investing, A Book of Practical Counsel, this is by Warren Buffett’s mentor Benjamin Graham. If you have interest in individual stock investing, read this book then realize that later in life Graham recommended you use index funds for stock market investing.
Here is what I think is the best book on bonds out there. Feel like you don’t understand bonds? You will after finishing this book by Annette Thau. It is appropriately subtitled “Everything Investors Need to Know About Treasuries, Municipals, GNMAs, Corporates, Zeros, Bond Funds, Money Market Funds, and More.”
This is Rick Ferri’s masterpiece defense of index funds. I find Ferri more readable than Bogle and Malkiel, his predecessors in this argument. If ever there were a rabid proponent of passive investing, Rick would be it. I once asked him why he keeps writing the same book over and over and he answered, “Because Wall Street keeps telling the same lies over and over.” Every investor ought to read at least one of Rick’s books early in his investing career. All About Asset Allocation is another favorite.
Still not convinced? Or just prefer Swedroe to Ferri? Here’s another explanation of why hunting alpha in the stock market is probably a fool’s errand. Larry Swedroe is one of the good guys out there. A proponent of passive investing who loves to dabble into alternative asset classes, his wisdom will help your nest egg grow.
These short books from William Bernstein should NOT be the first thing you read on investing. But if you’re looking for a more in-depth exploration of important investing and portfolio design ideas, look no further. I recommend them all. They include The Ages of the Investor, Skating Where The Puck Was, Deep Risk, and Rational Expectations.
Want to invest in gold? Hedge funds? Indexed annuities? Don’t before you take a look at this book by Larry Swedroe. Some “alternative” investments have a role in your portfolio, but most do not. Find out which is which. Great book to read before venturing away from a basic Boglehead-style index fund portfolio.
One more from Swedroe, this one for the DFA and other “factor-based” investing crowd. Should you tilt your portfolio to small, value, momentum, or profitability? Read this book to get the “Pro” case. Read Bogle’s Common Sense on Mutual Funds for the “Con” perspective.
Reviewed here, this is a gem written by Steve Weisman, a true annuity expert. Finally, a book about annuities that makes these complicated beasts seem simple. The biggest strength of this book is that it is written by an expert in the field, but an expert who DOESN’T sell them. If you have an annuity and are wondering what to do with it, are considering getting one, or if you invest through a 403B, you owe it to yourself to read this book ASAP.
Want to learn about ETFs? Here’s the best book. Again by expert Rick Ferri, you can learn that despite the fact that there are thousands of ETFs, you should only consider investing in a very few of them.
Looking for something new in the way of alternative investments? How about a quiver (portfolio) of income generating websites? Reviewed here, this book by Jeff Hunt is the best one I’ve found so far on this subject.
Recommended by readers:
- Protecting Your Wealth In Good Times and Bad
- The Most Important Thing
- The Affluent Investor (Reviewed here)
- The Only Guide to a Winning Investment Strategy You’ll Ever Need
- A Random Walk Down Wall Street
This one, by author, columnist, and WCI conference speaker Jonathan Clements is one of the best financial books I’ve ever read. It was so good I am literally jealous that I’m not smart or talented enough to have written it myself. The only reason it isn’t at the top of this list is because it is a bit more of an advanced book, that helps you get perspective once you know the basics. Reviewed here. I almost put this into the personal finance book category, but this category was a little light and it certainly includes a lot of behavioral finance and investing information.
This classic by Belsky and Gilovich details the role that behavior has in your financial life. There is a lot more than math to investing and finance. Behavior can have just as large of an effect, and often larger. Personal finance is both personal- the behavior aspect and finance- the math aspect.
This one is by WSJ columnist Jason Zweig and is subtitled How the New Science of Neuroeconomics Can Help You Get Rich. If you can get control of your brain and your relationship with money, wealth is almost guaranteed.
Subtitled, Getting Investing Right, this is a great beginning investing book that is particularly strong on the behavioral investing aspect. His chapter on “The Ultimate Mistake” (not spending the money you spent your whole life saving) is particularly excellent. Reviewed here.
This one is quite different from the others and will be loved by history buffs. This is a real-time journal from an attorney as he passed through the Great Depression including all kinds of financial notes about the prices of stocks, the overall market, main street businesses around him, and real estate. If you want to know what going through a serious downturn as a high-income professional is like, I know of no better book.
Recommended by readers:
To Be Added
There are tons of crummy real estate investing books out there. Most of them are 50% motivational, 40% bogus, and 10% useful. This book is no Rich Dad Poor Dad. Written by real estate investing expert (and real estate guru debunker) John T Reed, this one just throws out the motivational and bogus stuff and tells it like it really is. The book is subtitled “How to Profit From Skill and Boom Markets and Protect Yourself From Down Markets.” Don’t expect get-rich-quick no-money-down garbage here, just real advice from someone who has really done it, the slow, methodical, and realistic way. This was not Reed’s first book, but it is probably his best book. It is a sophisticated look at the fundamentals of real estate written after he had already written 22 other books on the subject and spent a career in the field. You may not be able to buy this one on Amazon, but Reed sells them directly on his site. His “beginner” book is called “How to Get Started in Real Estate Investing,” but I think this one is a better read for the beginner.
Authored by Frank Gallinelli, this book covers 36 key numbers or calculations you really need to know if you’re serious about real estate investing. I cannot recommend it more highly. Everything you need to know about cap rates and net operating income and what they mean is in this book.
I read this book while shopping for my fourth mortgage. I sure could have used this information the first three times. It’s pretty surprising how complicated mortgages can be. Considering it is the largest purchase you’ll ever make, don’t you think you ought to spend a little time making sure you get a good deal? You can easily lose everything you gain in savvy negotiating over the price of a home by getting a lousy deal on a mortgage.
This is another of John T. Reed’s excellent real estate books, subtitled “How to Maximize Your Income and Minimize Your Expenses and Hassles.” See? Even the title is no-nonsense. Amazon says, “Providing solid, basic information on managing rental units and making money at it, a guide to property management offers tips on recruiting and supervising assistant managers, maximizing income, setting up a bookkeeping system, and saving on payroll taxes.” Sounds boring huh? But boring investing is good investing. If you want some get-rich-quick motivational book, there are plenty of those out there.
Written by long-term blog advertiser Josh Mettle, and reviewed here. Read this book before getting a “doctor” mortgage loan. Read all about the horror stories other physicians have had while trying to buy a house across the country before they even finish training.
Recommended by readers:
Stephen L. Nelson, CPA has written dozens of books including Quicken for Dummies and QuickBooks for Dummies. Stephen knows more about the 199A pass-through business deduction than anyone I know and this is the best book out there on the subject. It’s not cheap ($150) but it’s a lot cheaper than missing out on this deduction that could be worth tens of thousands to some docs and other business owners.
Subtitled “Income Taxes Explained in 100 Words or Less,” this classic by CPA and Blogger Mike Piper is probably the best primer out there on the income tax. It might not teach you every little trick you need to know, but it’ll give you a great overview and won’t waste your time.
I used to recommend Taxes for Dummies, but the last edition was in 2009, and tax law changes too frequently to recommend an 8-year-old book. If you’re looking for a comprehensive “how to do your taxes” kind of reference, this one will work better than Piper’s. If you can read this cover to cover, you’re going to be very wealthy some day. That kind of discipline is pretty rare.
The best book on the market when it comes to investing-related taxes, Demuth can make a terribly boring subject interesting and even funny. Reviewed here. This one is written by James Lange, who should be far more popular than he is as a financial author. While this delves into many aspects of the tax code, it really specializes in the use of retirement accounts and minimizing estate tax. While many authors get their recommendations about retirement accounts wrong, Lange nails it time and time again with well-done calculations and clear graphs and charts. CPA/JD James Lange is a recognized expert on retirement accounts and trusts. Highly recommended, although best if read slowly.
Another inexpensive, easily read book on taxes from Mike Piper. This one hits a subject that many doctors want to learn more about.
This is another no-nonsense book from John T. Reed. Although aimed at Real Estate Investors, there is an awful lot in here about taxes that you might find useful. One of the best sections explains how an audit works and what it is like to go to Tax Court with and without an attorney. It is subtitled, “How to Make Sure You Aren’t Paying One More Cent in Taxes Than the Law Requires.” If that’s your goal, read this book! Again, you might not be able to find this one on Amazon for a reasonable price, but you can probably order directly from Reed.
Recommended by readers:
Not cheap, but the best book on the subject in my view. Chapter 5 alone on valuing a practice buy-in is worth the price of admission. I don’t expect I’ll ever write a book on this subject because I couldn’t do as good of a job as author and healthcare attorney Dennis Hursh.
This is a great book. Unfortunately, it is out of print either temporarily or permanently. Go ahead and take a look by clicking on the link, but don’t be surprised if there are only a handful of copies available from third-party sellers and they all want $600 for it. I’ll sell you my copy for 1/4 of that if you want! It includes these features:
• How to assess the micro, medial, and macro organizational cultures
• How to determine if there is enough volume to support your practice
• Ensure that your pay is competitive and understand how it is calculated
• Ensure that you have “tail” coverage that is paid for by your employer
• Mitigate the unwanted impact of an “equitable share” of call
• Forecast the long-term ramifications of upfront money
• Protection from standard termination covenants
• How to capture the “spirit” of the agreement
A short, no-nonsense guide to starting your own dental practice. 95% of it is applicable to physicians and other small businessmen. Reviewed here.
This one also suffers from a fairly high price and limited availability, but it is excellent if you can get your hands on a copy. It is specific to doctors and has over 200 examples showing you what to do and not do. Get what you deserve by using these techniques.
Limited availability on Amazon, but you may be able to get it cheaper at the ACEP Store. I paid $10 for my copy. It was definitely worth that. As I write this post it was available for $27, but I’ve also seen it listed for $200. I wouldn’t pay that much. But it’s EM specific, so a great read for a senior EM resident.
Recommended by readers:
Subtitled “Why a will is not the way to avoid probate, protect heirs, and settle estates,” this book wonderfully explains why pretty much every doc ought to have a living (i.e. revocable) trust in place at their death. 117 short pages explaining why you need a trust instead of a will. If you don’t think you need a trust, read the book.
Subtitled “11 Easy Ways Anyone Can Secure a Child’s Financial Future,” this is a gem of a book that you don’t hear about very often. It describes all kinds of ways to help your kids get a leg up financially. It discusses all the kiddie type accounts such as Coverdell ESAs (Education IRAs), 529s, UGMAs etc. and contains lots of creative ways to take advantage of the extra decades of compound interest your kids have available to them. While not one of the first books you should read, if you find you enjoy learning this stuff, this is a great one to add to your collection.
This one could have gone in both the Tax section and the Estate Planning section because it is so good with both topics. The entire second half of the book is all estate planning, and perhaps the best book on the subject I’ve read yet. Written by CPA/JD James Lange, a recognized expert on retirement accounts and trusts. Highly recommended, although best if read slowly. Reviewed here.
Subtitled “How successful parents raise responsible children.” I know this is a concern for our family, and I’ll bet it is for many of you. Learn how to give them every advantage you can without spoiling them. Reviewed here.
Recommended by readers:
To Be Added
What do you think? What books would you add to this list? Put your recommendations in the comments section with a 1-2 sentence description of why you think it should be on the list. Comment below!