The best books with insights for managing your money wisely

Long before ‘nudge’ became a buzzword, Packard wrote this fascinating account of how US advertisers, from the 1930s onwards, developed psychological means for getting us to buy things we never even wanted.

Packed with case studies – such as why washing powder isn’t sold in yellow boxes and how to make insurance an impulse buy – this classic is as relevant today as its first edition in 1957. It’s a book with timeless warnings for controlling our finances.

Understanding that we are (still) being subliminally groomed to be part of the consumer society is a first step to reasserting our own agency. It can help us step back from working and borrowing to spend on a dream we are sold and instead pursue our own goals. 

US economist Frank Knight is credited with distinguishing uncertainty from risk back in 1921. Yet the two are often conflated.

Kay (an eminent economist) and King (a former Governor of the Bank of England) argue powerfully that the distinction does matter. They range widely across macroeconomics, politics, and consumer choices to show why reducing the future to a set of numbers (probabilities) creates a false – and often disastrous – illusion of power over future outcomes.

They argue that instead we should aim to make decisions that stand a reasonable chance of being robust against unknowable, as well as forecastable, paths that the future might take. That’s very much the ethos of my own books: building in resilience is a key part of successful personal financial planning.

This is the story – as Lewis knew it so far – of Sam Bankman-Fried and his cryptocurrency exchange, FTX.

Lewis is the chronicler par excellence of the financial dramas of our times. He has a gift for making Byzantine market practices intelligible and weaving them into a compelling read. At the time Lewis was writing, Bankman-Fried was facing fraud charges in the US. Lewis speculated that possibly his actions were not intentionally criminal - though the US court has now found him guilty. Moreover, FTX customers have so far been unable to retrieve billions of dollars.

This book is a reminder of why crypto should be treated as a gamble, not an investment: most crypto tokens have no intrinsic value; their prices may be determined by large, leveraged program traders; and there is little oversight and no compensation when you play outside conventional regulated markets.

Much of personal finance relies on the premise that you will achieve your goals by investing in economic growth.

One narrative says we can play our part in tackling climate change by shifting our investments towards sustainable growth – for example, backing green technologies and carbon capture. However, Latouche questions whether economic growth is compatible at all with living within our planet’s resources.

He argues that we have to detach from the cycle of over-consuming and over-producing that is implicit in targeting economic growth and instead shift to a goal of maximising human wellbeing. His radical alternative is a world where we work less, share more, and respect nature.

It is arguably the only real solution to the climate crisis, but powerful vested interests stand in the way of its adoption.

Cialdini is a social psychologist who set out to explore what makes us comply with requests from strangers.

He did this from the inside by taking jobs where he was trained by various organisations to sell their wares. What makes this book so valuable is that Cialdini not only identifies six key methods of persuasion that are routinely deployed but also offers guidance on how to defend yourself against them. This has huge relevance for personal finance.

As banks and other financial institutions increase their fraud detection systems, criminals increasingly see you, the individual, as the weak link they can exploit to defraud you. Cialdini’s book is a great tool to help you detect and rebuff scammers intent on parting you from your money.