I may earn money or products from the companies mentioned in this post.
Do you ever feel like you have no idea where to start? When you first begin trying to learn even what a stock is and how to figure out which one to buy, it's overwhelming. You sit there and endlessly Google and come up with 10 conflicting answers. It's nearly impossible to tell what's right and what's wrong.
Well, you came to the right place. Through trial and error, I've been able to decipher which books are great for beginners and which ones are complete crap. The 10 listed below are the ones that helped me on my journey to not have to rely on a financial advisor for pathetic returns on my investments.
Check them out below.
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The Top 10 Investing Books for Beginners:
Tap Dancing to Work
This is a collection of Fortune articles written about Warren Buffett over his life and career. You get insights on his investment strategies, his thoughts on management and even his personal life-like parenting and his philanthropic efforts. What's unique about this is the author, Carol Loomis, became a great friend of Buffett's, so she was able to write in great, personal detail that very few books on him can.
Charles Schwab's Guide to Financial Independence
At first, it was very difficult for me to read this going in cold without any previous knowledge of personal finance. After reading Money Master the Game, this book was a breeze. I understood every term and topic discussed. This book is great for going slightly deeper into investments and is perfect as an introduction for beginners. Index funds are highly recommended, which I'm a huge fan of, so it's definitely a must read.
Uninvested: How Wall Street Hijacks Your Money and How to Fight Back
It calls out Wall Street and all advisors not acting in their client's best interest. Bobby Monks exposes the industry on how we're all being scammed on our retirement money and what to do about it. He explains how the industry works against us and how the industry as a whole got to this point.
A Random Walk Down Wall Street
Burton Malkiel shows how flawed financial advisors are in A Random Walk Down Wall Street. He goes over technical analysis and fundamental analysis showing actively managed funds severely underperform the average market performance over the long-term. The book does a really great job showing you that you are just as likely to get the same performance throwing darts at a dartboard with stocks listed on it than you are with mutual funds that are actively managed. It does however also talk about how efficient the market is, but since I tend to follow the principles of Warren Buffet and the advice he dishes out (like this), I'm not a believer in that argument. Overall, the book does a great job showing you money managers are no more successful than the next person.
The Intelligent Investor
The classic book on value investing that Warren Buffett deems, “by far the best book on investing ever written.” It was written by the father of value investing, Ben Graham (the originator behind the idea of the CFA). This book made everything click for me. Graham talks about how irrational “Mr. Market” is at times and when it's best to take advantage of him. Graham talks about how crucial it is to give yourself a “margin of safety”, or a buffer in the event the worst case scenario happens to the stock you invested in. He explains the calculations he uses to determine whether a stock is cheap and safe enough to own. Surprisingly, the calculations are extremely easy to follow. The Intelligent Investor perfectly explains how to invest in the stock market without taking big risks. For me, this is also the best book I've read on investing.
The Little Book of Common Sense Investing
This is basically the bible of index funds. Jack Bogle, the founder of the index fund shows in clear, concise language, why investing in index funds is the best investment for the majority of people who want to put their money to work. The argument is that trying to beat the stock market, along with all the fees and costs deducted that come from investing, is a lose-sum game. I do know people who have consistently beaten the market, but this is because they took the time to invest in learning the basics and beyond, and spend their time researching and reading reports on companies. For the average investor, this book should always be on your nightstand.
The Essays of Warren Buffett: Lessons for Corporate America
It shows you how well Warren Buffett understands human behavior, what motivates people and why some business choices are good and bad for your personal holdings. It's a tough read for a beginner, but if you're patient with it, it's a phenomenal read. I came out with a much better, well-rounded understanding of the financial world and how it all comes together through my own personal investments.
Common Stocks and Uncommon Profits
Warren Buffett says he's 85% Ben Graham and 15% Phil Fisher. Fisher's strategy is finding growth at a reasonable price. He explains what qualities to look for in a business and how to get the information you need to make an informed decision whether to invest in a company or not. Although the book does give advice on how to speak with top-level executives, which may not be as practical these days, pairing this book with the Intelligent Investor gives you great insight on how to make the best possible investment decisions.
The Snowball: Warren Buffett and the Business of Life
It's an inside look at Warren Buffett's life. Reading what he was like as a child, how he was raised and his early interests show you how dedicated he is to his practice. Alice Schroeder gives great insight into how he became the best investor of our day and one of the most powerful and respected people in America.
Where Are the Customers' Yachts?
A satirical take on how brokers can seriously rip you off if you're not careful. It's a funny book, but once you realize it's based on real life and it's happening to you, it's really not that funny anymore. After over 55 years, this book still rings true. If you're not careful, you're getting poorer while your advisor is getting richer off your own money.
Are there any others you would add to the list?
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