Before investing your money in an asset, you must invest your time in learning. Knowledge will be your first and best investment.
Either in electronic or paperback formats, these books will also introduce novice investors to the best investment strategies, and give advice on how to seize opportunities and build wealth.
1. The Intelligent Investor by Benjamin Graham
Benjamin Graham is known as “the dean of Wall Street” and is considered the father of value investing. Graham is credited with starting to make the distinction between investment and speculation, and his book The Intelligent Investor is a valuable lesson on how to achieve financial expertise.
This is a great piece of work on investing strategies. Some of the book’s key takeaways include: Any purchase of a title must be justifiable, both qualitatively and quantitatively; having financial intelligence is more of a character trait than a brain, and people who cannot control their emotions are not apt to make a profit through investing.
2. Beginner’s Guide to the Stock Market by Matthew R. Kratter
Young investors who jump into the stock market straightaway are likely to lose their hard-earned money. So, learning about the basics on how to manage an investment portfolio and how the stock market works from solid sources, is absolutely essential.
Kratter’s approach to the essentials is enlightening, by first introducing the idea and then telling you about market rates and how they work, and how to find the best ones. He offers a thorough analysis on long-term and short-term financial performance, while also focusing on how to swerve from blunders.
3. Beating the Street by Peter Lynch
According to Goodreads, “Lynch for the first time explains how to devise a mutual fund strategy, shows his step-by-step strategies for picking stock, and describes how the individual investor can improve his or her investment performance to rival that of the experts.”
Lynch is a specialist in stock picking, and he managed his fund, the Magellan, based on stock selection rather than following an index almost passively as most fund managers do. The book is intended for those who want to directly manage their portfolio.
4. Broke Millennial by Erin Lowry and Gildan Media
Instead of encouraging misinformation about this generation, author Erin Lowry decided to tackle generational finance with Broke Millennial: Stop Scraping By and Get Your Financial Life Together.
Coming out of college with student loan debt and into the workforce leads to all kinds of financial questions and situations young investors are probably not prepared for.
The chapter “I’m in debt, why should I worry about saving?” breaks down millennials‘ financial adventures in a fun and relatable way. In this selection of the best investing books for beginners, Lowry’s work is absolutely a must.
5. The Essays of Warren Buffett by Warren Buffett
According to Trading Education, the fourth edition of The Essays of Warren Buffett hit the shelves in 2015 with the original being published in 1999.
In the form of essays, Lawrence A. Cunningham presents a collection of letters from Warren Buffett to the shareholders of Berkshire Hathaway in which the fundamentals of good management are exposed, specifying that the role of a good manager is to be at the service of capital of the shareholders.
For Buffett, the role of shareholders should not be limited to contributing capital but to understanding the business and acting as an owner. These lucid essays address a wide range of topics such as executive recruitment, investment strategies, business evaluation, or financial information, among others.
6. Principles by Ray Dalio
In 1975, Ray Dalio founded Bridgewater Associates from his small New York apartment. Forty years later, Bridgewater is the fifth largest privately held company in the U.S. according to Fortune, and is one of the most successful funds in history.
Throughout his career, Dalio has discovered a unique set of principles that he considers the foundation of his success, which he shares with young investors throughout this book.
After ending up bankrupt in 1982, the experience allowed him to be one of the only managers capable of successfully weathering the financial crisis of 2008.
7. Rich Dad Poor Dad by Robert Kiyosaki
The book tells the teachings of the author’s two fictional dads –a biological one who, a teacher who defends the academic system based on extreme hard work and reward; the other, the father of a friend who teaches the art of putting money to work for you.
The book basically revolves around this dichotomy, as the friend’s father is a man without any academic background but with very clear ideas about money. The biological father follows the typical western scheme of studies, work, and mortgage.
Rich Dad Poor Dad is not a step-by-step guide on how to get rich –although it covers topics such as real estate investing– as it is more like a self-help book with incredible lessons and takeaways from a philosophical perspective on money and success.
8. The Little Book of Common Sense Investing by John C. Bogle
The Little Book of Common Sense Investing: The Best Way to Guarantee Your Fair Share of Stock Market Returns was written by Vanguard Group’s founder and former CEO, John C. Bogle.
It focuses on index funds, which give the investor an average market return. It also shows how to keep investing costs low, so that people –especially young investors– do better in this aspect. According to Bogle, trying to beat the market “is a losing game,” and “the more managers and brokers get, the less investors win.”
Bogle’s sixth book asserts that “the simplest and most efficient investment strategy is to buy and hold all the public companies in the country at a very low cost.” In terms of investment portfolio, he believes that the classic index is the only investment that guarantees a fair share of returns on the market.
9. Think and Grow Rich by Napoleon Hill
In Think and Grow Rich, Napoleon Hill condenses all the acumen he accrued by interviewing some of the richest investors and business people in the world. The book has sold more than 100 million since its publication in 1937, and it is still absolutely relevant despite having been written more than 80 years ago.
As the story goes, Napoleon Hill was a young journalist and writer who was presented with the chance to interview Andrew Carnegie, one of the richest people in the world at the time.
Carnegie, told Hill: “I will open the doors to the 500 richest people in the U.S. so that you can interview them, get all the information you want and write a book that helps other young people achieve success much more quickly. But you have to know that I am NOT going to pay you a single penny for it. What will you do?” Fortunately, he accepted!
10. A Random Walk Down Wall Street by Burton G. Malkiel
The first edition of “A Random Walk Down Wall Street” dates from 1973. However, unlike other works, the author has been updating it right up its latest –11th– edition in 2016.
The entire book has been revised to include lessons after the latest crises, as well as the latest investment theories and techniques. These elements have slightly modified the author’s view of how to operate in the market today, which makes this book even more useful for small investors.
“A Random Walk Down Wall Street” is intended as a guide as it gives investors very useful advice to conceive their financial investments.
11. Thinking, Fast and Slow by Daniel Kahneman
Daniel Khaneman is a 2002 Nobel Prize winner and researcher at Princeton University, who worked for bridging psychology and economics together.
In his book Thinking Fast Thinking Slowly he teaches new investors everything he has learned about the human mind and how we make decisions. He explains how our brain works using two systems that are constantly fighting for the control of our behavior and actions.
The struggle between these two systems often leads us to make mistakes in judgment or make wrong decisions. Critical takeaways include: our behavior is controlled by conscious and unconscious systems, and when we make decisions about money, we must put our emotions aside.
12. The Only Investment Guide You’ll Ever Need by Andrew Tobias
As put by Better World Books, “For more than 25 years, The Only Investment Guide You’ll Ever Need has been America’s favorite finance guide, winning the allegiance of more than a million readers across the country.”
The book underwent a thorough revision, including updates that include new tax laws in an attractive design. “Concise, witty, and truly understandable, Andrew Tobias shows you how to use your money to your best advantage-no matter how much or how little you have.”
In this book, you will learn how to spend smarter-and save $1,000 or more, when to invest in stocks and how, as well as everything about investing on the Internet.
13. The Modern Guide to Stock Market Investing for Teens by Alan John and Jon Law
This book is unique in the sense that it was written by a teen for teens. It introduces people of the younger generations to basic concepts like making money, budgeting, and savings.
It points to the idea that, the younger you learn about money and finance, the more chances you will have to grow your personal economy.
The book has a solid 4.5-star rating on Goodreads, and analyzes real-life situations with insights from the world’s most successful investors.
Alan John says about his own piece of work: “As the author, I wrote this book so investing can change other’s lives as it changed and continues to change mine. No matter who you are, no matter your age and no matter the amount of money you have, you can invest, and this book will help you do just that.”
14. The Behavioral Investor by Daniel Crosby
Psychologist and behavioral finance expert Crosby is the expert you’d want to guide you through the minds of investors. Trained as a clinical psychologist, Crosby has applied his knowledge of behavior to his work as an asset manager and bestselling author.
According to Joy Lere, a psychologist and consultant specializing in behavioral finance, “Crosby offers what is arguably the most comprehensive guide to the psychology of asset management to date” in this fantastic book.
His insight helps you become an intelligent investor by teaching how people’s social environment, psychology, and neurobiology combine forces to influence behavior and decision-making.
15. The Coffeehouse Investor by Bill Schultheis
Not only is Bill Schultheis the author of this book but also the creator of the portfolio of the same name. He is also the financial advisor and co-founder of Soundmark Wealth Management.
In his book, Bill Schultheis emphasizes the difficulty of beating the market –something that few investors achieve in the long term. In The Coffeehouse Investor, he puts forward a portfolio based on uncomplicated indexed products that guarantee a “more rewarding” experience.
His portfolio is based on three principles: develop a long-term financial plan, diversify through different types of assets, and take full advantage of the profitability of each asset thanks to indexed products –index funds and ETFs.
What should I do as a beginner investor?
Whether it is real estate investing or any type of asset, the first you must accept is that there is a steep learning curve: it takes time, it can be tough, but it’s profitable and it ‘s worth it.
Getting hold of some of the best investment books available, you will have an amazing opportunity to find out who the best are: Warren Buffett, Peter Lynch, David Einhorn, Phillip Fisher, and many more –they have all obtained great returns on their investments.
Remember: knowledge will be your first and best investment.
How much should a beginner investor start with?
The rule is “only invest what you’re comfortable losing”. Anyone can start investing in the market. So, in order to have an acceptable diversification and that the commissions are at normal levels, you could start with about $10,000 to $20,000.
But do not despair if you don’t have those figures. You can start trading with some $1,000, and in more specific cases, even less than that.
What should I study to become a good investor?
If you are willing to study and get deep into investing, you should go for fields like finance, economics, business administration, computer science, statistics, and applied mathematics. These are the disciplines that will give you the best set of skills.
How do I start investing?
Once we have decided to take the step towards investing and we have the amount of money to invest, it will be time to ask other questions.
The most important is the risk that you are willing to take: “will I be comfortable if there are abrupt falls in the market? Do I prefer something that lets me sleep peacefully at night even if it means less profitability?” Assessing your investor profile –conservative, moderate, or risky– is the best way to start.
There are some basic concepts that you need to know, which you can learn in free courses, videos, or even trust your investments to experts.
However, if you really want to learn and this is something that could become a passion, there is a great deal of fantastic knowledge you can accrue by reading the best books about investment, mutual funds, real estate investment, and more, to begin your exciting journey.
This article originally appeared at ValueWalk.