Recommended Reading List

 

 

My Top Ten List for Beginner’s Investing Books:

1. The Neatest Little Guide to Stock Market Investing by Jason Kelly
2. Rich Dad Poor Dad by Robert Kiyosaki
3. One Up on Wall St by Peter Lynch
4. The Richest Man in Babylon by George S. Clason 
5. Economics in One Lesson by Henry Hazlitt
6. Common Stocks Uncommon Profits by Philip A. Fisher
7. The Little Book of Bull Moves in Bear Markets by Peter Schiff         (Little Book Big Profits Series)
8. The Little Book That Beats The Market by Joel Greenblatt (Little Book Big Profits Series)
9. The Tao of Warren Buffett by Mary Buffett and David Clark
10. The Little Book of Value Investing by Christopher Browne (Little Book Big Profits Series)

I have been asked this question (what books can I start reading to learn how to invest?) quite a bit by people, so I felt I would address this here in my new blog so I don’t have to keep saying it. In general, I recommend if you are a newbie and have minimal or no background in economics (you really need to learn macroeconomics preferrably classical or Austrian School of economics if you want an edge) and investing like I had 2 yrs ago, you should probably start reading the first 2 books on my list along with any of the books from the Little Book Big Profits series by Wiley Finance.

The order does not matter too much with respect to reading the Little Books Big Profits Series except that I don’t like Indexing (John Bogle’s book aka the red one) too much and I prefer picking out my own individual stocks. But, I am young and I read a lot of news stories and articles and I keep on top of things more than most of you will and I am pretty sure I also have a higher risk tolerance than most of you. 

Wiley Finance has done, in my humble opinion, a truly outstanding job of developing a quality beginner’s book series on finance and investing. I believe there are at least 11 books in that series now and it keeps growing. I don’t think there is a better group of beginner’s books out there (and no they have not paid me a dime to recommend them to you). The books are relatively inexpensive especially if you buy them used online from Amazon and they are written by some of the best professional investors in the world today.

Most people don’t think about it this way, but you are taking advantage of the valuable information and insight these investors have in their heads about the market for a very cheap price: the cost of the book and the time it takes you to finish reading it. That’s all you are giving up compared to other people who get their informaiton and insight in other, way more expensive ways. Some of these authors have investing newsletter subscriptions selling for hundreds or thousands of dollars a yr and yet you can get a lot of their thoughts from these books for less than $20 each. That’s a bargain anyway you look at it if you ask me! These authors are people who have actually made a lot of money investing and not academics and professors who never tried out their theories in practice to see if they actually worked.

A lot of the theories in investing and finance developed in the classroom don’t work in practice in the real world. It is a personal philosophy of mine based on experience investing successfully and doing my own research that I only read investing books from authors who have made money investing. I do not read books published by academics unless they were successful investors and retired to teach or they still teach like Benjamin Graham did when he was alive.

Try and take bits and pieces from other successful investor’s “games” and add them to your own repertoire. I don’t believe in listening to any one person/expert/investor more than the rest. I do like Jim Rogers, Warren Buffett, George Soros, David Einhorn, John Paulson, Eric Sprott, Louis Navellier, Dr. Marc Faber and Peter Schiff a lot though.

If you are a former business graduate, and you graduated from college hating finance and investing because all you learned in all of your classes are a bunch of equations, calculations and stupid, useless, failed or untested theories from your professors, I am sorry to have to inform you of this, but I can guarantee you that you are going to have to unlearn or relearn a lot of things to be a successful investor! There is no avoiding this! 

This is because of the way the world economy is changing and based on current political events happening as we speak. I’m sorry, but that’s my opinion and I’m sticking to it about that. The world is contsantly changing and everyone has to learn new things to get ahead in life. Learning only Keynesian macroeconomics in school will not give you an edge in the market. You will be just like everyone else and think like everyone else and only see what others see. You will not see opportunities that others don’t see because you are looking at things from the exact same perspective as everyone else. 

But, if you have the desire to change and improve your investing and the appetite to learn how to invest better, then change is definitely possible. The most important quality you need is the desire to change. If you have that, it is just a matter of time and effort going into making it happen! 

Make no mistake though, it will be very difficult for you to overcome bad habits and thought processes that you learned from a lot of the academics (there are obviously exceptions and good professors who actually make money investing but not a lot of them).

I still like to read the newer books in the Little Book Big Profits Series when they come out even though I am at an advanced level of investing. This particular series of books is not the typical boring finance, economics or investing textbooks some of you may be used to in school. They are an easy and enjoyable read and some of you may even be able to finish an entire book in one day.  The authors of these books use everyday, real world analogies to take the complex things in finance, economics and investing and break them down into something much more simple that everyone can understand.

If you are beyond the beginner’s level of investing and want some book recommendations for you to take your game to the next level, I can also make some recommendations for those books as well. This list is just a reference point for the newbies who are curious about learning how to invest and I do not want to overwhelm them. The beginner’s books that just narrowly missed the cut of my top 10 are: How to Make Money in Stocks by William J’ O’Neill, The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing by Louis Navellier and The Warren Buffett Way by Robert G. Hagstrom.

If you are an entrepreneur or businessman and you have not read Think and Grow Rich by Napoleon Hill already, I recommend you do so quickly! The book completely changes the way you think about a lot of things in your life besides just business and the book has helped me immensely! It is not an investing book per se, but it is a great book. One for the ages, that will last the test of time!

Here are some other lists from sources besides myself and their ideas for books for beginning investors to start off reading:

1. Get Rich Slowly’s List for Beginning Investors
2. Stock Hopper’s List of Books for Beginning Investors
3. U.S. News and World Report’s List of Must Read Books for Novice Investors
4. Stock Market Investing For Beginners Blog’s List of Recommended Books
5. Larry Swedroe of CBS Moneywatch and Wise Investing’s List
6. Kim Snider’s Reading List
7. About.com’s List by Joshua Kennon
8. Global Investor Bookshop’s List
9. Street Authority’s Recommended Reading List
10. Stock Trading ToGo.com’s 20 Must Read Books
11. Forbes Magazine’s Recommended Reading List for Investors 

Also checkout the Stock and Investment Guide For Beginning Investors’  website.

In closing, we all have our different pots of gold at the end of the rainbow. What we would like to be doing if we were not forced to work at a job we don’t like or love. The best way to increase your odds of success of winning at investing involve educating yourself, your family, your friends and other loved ones.

A quality financial education is priceless in my mind and is the best gift you can give yourself or someone you care about. It is like planting the seeds to grow your very own money tree! Money can be made with your mind for a lifetime as opposed to working for money at a job for most or all of your adult life. But, you have to be willing to keep learning because the world is constantly changing. By writing this article of what books to read, I am merely trying to plant the first seed for you in hopes it will eventually help you reach your own pot of gold someday!