You’ve probably thought to yourself, “Can I get wealthy from investing without hiring a professional advisor? Can I really do it myself?” While a professional can certainly help you perform due diligence and guide asset allocation, you may not have access to one. Hiring a professional to manage your investments is not akin to hiring a plumber, car mechanic or even an attorney, where first teaching yourself about plumbing, car engines or the law is not necessary. With personal finance and investing, if you don’t take the time to understand it, you are setting yourself up to be susceptible to bad advice—or worse. But learning about investing is easier than you think, so we’ve curated 15 of the top books for beginner investors to get you started.
Aside from googling a definition or watching a Financial Poise webinar, you can read a few good books. Hitting the books is always a good idea, but which ones should you read? Personal finance books abound, so picking the right ones can feel like searching for diamonds in a pile of cubic zirconia.
Here are our top picks, for anyone ages 12-92 looking to read their way to financial poise. We suggest the books be read in the following order:
1. The Millionaire Next Door by Thomas J. Stanley and William D. Danko
“Who is the prototypical American millionaire? What would he tell you about himself?” Re-think your perceptions on the wealthy Americans living next door, say Stanley and Danko. With profiles and stories of how America’s wealthy became that way (hint: most are self-made millionaires, not trust fund babies), learn important money management lessons from people who have made their own success. The lesson here is that millionaires may look more like Bob Next Door than the Kardashians, and you too can get rich from investing.
This is a very short and entertaining read—perfect for your first jump into investing.
2. Rich Dad, Poor Dad by Robert Kiyosaki
Kiyosaki’s perspective encourages entrepreneurship and, while you may not agree with everything he says, his take on business and earning still resonates today. He frames his lessons around his two fathers, one rich and one poor, and their opposing perspectives on assets, government benefits, taxes and the importance of money. Kiyosaki states, for example:
One dad recommended, ‘Study hard so you can find a good company to work for.’ The other recommended, ‘Study hard so you can find a good company to buy.’ One dad said, ‘The reason I’m not rich is because I have you kids.’ The other said, ‘The reason I must be rich is because I have you kids.’ One encouraged talking about money and business at the dinner table. The other forbade the subject of money to be discussed over a meal.
While these first two books are more about mindset, spending habits, and basic decision-making, the next book is different.
3. The Investment Answer by Daniel Goldie and Gordon Murray
Goldie and Murray believe that there are five decisions every investor should make:
By the end, you’ll learn things like how to allocate among stocks, bonds, and cash; when to sell or buy assets; and whether to invest alone or with a professional.
Easy to understand, this primer-style book helps you assess your financial health, as you would your physical well-being.
4. The Investor’s Guide to Alternative Assets: The JOBS Act, ‘Accredited Investing’ and You by Jonathan Friedland
Although the book’s title suggests it is targeted to accredited investors, it really is for every investor, including the absolute beginner. It continues the explanation of allocation and diversification, and includes incredibly plain English and objective explanations about crowdfunding, angel investing, private shares, private equity, hedge funds and other “alternatives” to publicly traded securities.
5. Understanding Wall Street by Jeffrey B. Little
The book is an easy-to-read manual that introduces investors to the ins and outs of the stock market. Totally geared toward the novice investor, this book teaches the basics, such as how and when to buy and sell, as well as how to judge a company and its stock.
If you enjoy history, you’ll learn a lot about Wall Street—but don’t worry, the book has also been updated, so it covers internet trading, ETFs and other issues for today’s investor. Overall, “Understanding Wall Street” is easy to understand and a quick read.
6. A Random Walk Down Wall Street by Burton Malkiel
This book is a classic on investing. According to Barron’s: ‘Imagine getting a week-long lesson on investing from someone with the common sense of Benjamin Franklin, the academic and institutional knowledge of Milton Friedman and the practical experience of Warren Buffett. That’s about what awaits you in…this must-read by Burton Malkiel.”
Malkiel focuses on investing techniques and strategies. This book also helped popularize the “random walk hypothesis,” which discusses the unpredictability of stock prices.
7. Think and Grow Rich by Napoleon Hill
An ‘oldie but a goodie’ penned by the former Franklin D. Roosevelt advisor. Hill’s best-selling book lays out six steps to building your wealth, starting with setting a financial goal and then doing what it takes to achieve it. Called one of “the most important financial books ever written,” Hill researched more than 40 millionaires to find out what made them the men that they were.
8. The Behavior Gap: Simple Ways To Stop Doing Dumb Things With Money by Carl Richards
Richards focuses on the mistakes people seem to repeat in how they manage their money, like spending above their means, buying items with no long-term value and “keeping up with the Joneses” style spending.
Furthermore, Richards warns against allowing our natural instinct to maintain the appearance of wealth, rather than living modestly within one’s means.
9. Thinking, Fast and Slow by Daniel Kahneman
Continuing with behavior, one of the best books on human behavior and decision-making is this best-selling book by a Nobel Memorial Prize in Economic Sciences laureate. While this isn’t specifically an investing book, it does explain certain cognitive biases that lead to errors in decision-making, such as overconfidence and ‘anchoring’. These are all unconscious errors that can impact not just you, but any seasoned financial advisor, as well. These concepts are also often applied to behavioral finance.
10. The Richest Man in Babylon by George S. Clason
This book is written as a collection of parable-style lessons with characters living in ancient Babylon who learn financial wisdom as they navigate business and household financial matters.
Originally published as a series of pamphlets, the book was published in full in 1926. In the forward, Clason writes, “This book of cures for lean purses has been termed a guide to financial understanding. That, indeed, is its purpose: to offer those who are ambitious for financial success an insight which will aid them to acquire money, to keep money and to make their surpluses earn more money.”
Lynch, a New York Times bestseller and Wall Street legend, teaches investors to trust themselves and their own observations when looking into potential investments (e.g., industries they are already familiar with and what they see going on around them). Following this sentiment, Lynch dishes out advice based on the fact that an investor’s gut may be the money maker in the end, as long as the knowledge is there, too.
12. The Intelligent Investor by Benjamin Graham
The teacher of legendary investor Warren Buffet, Graham is known as the “father of value investing.” Though the book was published in 1949, “The Intelligent Investor” is still relevant today, as its lessons are very much timeless. Jason Zweig lists a few in the foreword:
This would be #1 on our list of best books about investing if it was ordered by priority or excellence. However, to get the most of it, we want you to read those listed above first.
13. The 4-Hour Workweek by Timothy Ferriss
When Ferriss wrote this, he may not have realized how his ideas could sprout into a life of their own; but this New York Times best-seller grew into a lifestyle brand that has drawn accolades from virtually every sector.
The book tosses out long-held ideas of retirement and financial planning to instead teach concepts like:
14. Blink: The Power of Thinking Without Thinking by Malcolm Gladwell
Blink is an exploration of how spur-of-the-moment decisions can have lifelong effects. The author profiles various professionals (a psychologist, a tennis coach and an antiquities expert) who have learned to make predictions based on assessing observations and trusting first impressions.
This “intellectual adventure” book is designed to be an aid for people hoping to learn more about how to hone their own decision making.
15. Clever Girl Finance: Learn How Investing Works, Grow Your Money by Bola Sokunbi
Women are inheriting a large amount of wealth. Between the wage gap and a lack of financial education geared towards women, this one finishes off our list of the best books for beginner investors.
If you’re a young woman navigating your finances, or you have a daughter who will soon navigate the world, then this book is a very accessible and enjoyable read about building long-term wealth with action plans at the end of each chapter.
This book is a continuation of the first book, “Clever Girl Finance: Ditch debt, save money and build real wealth,” which addresses personal finance on a more general level, including saving, budgeting and reducing debt.
©All Rights Reserved. May, 2021. DailyDACTM, LLC d/b/a/ Financial PoiseTM
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