You Need To Read These Six Books Before Investing
Are you a beginner investor? Are you looking into investing? See the best list of the six MUST-READ books you need to read before investing.
In this article, we will go through six books that every beginner investor needs to read before investing. Believe me, these books will save you money, time, and tears!
Overwhelmed and lost in your investing journey? You’re not alone!
A few years ago, I started looking into this thing called investing. As a confident millennial in my early twenties, I decided to step into investing after graduating with a Finance bachelor. You see none gives you a list of the six books that you need to read before investing. Instead, an endless list of academic papers.
Are these titles ring a bell? “Invest in those 5 stocks, you will never regret it” or “These stocks will make you a millionaire by tomorrow”.
Long story short. I bought my first shares out of pure guessing. Genius, right? This was by far the DUMBEST thing, I ever did!
If you don’t want to lose money, then pure guessing is not the way to go.
There is no worst feeling than seeing your money shrinking and shrinking. The money that you work hard to gain. From there, things got serious…
I put a bet with myself and I said, I WILL NEVER LOSE MONEY ever again (at least through this way).
I have started reading books, researching companies thoroughly and monitoring news, as simple as it sounds. Reading and researching are part of investing, this process will never end unless you reached your goal.
Reading and researching can get very time-consuming. To save you time, I made a list of the 6 books that any beginner investor should read before start investing. Let’s go through!
1. The Millionaire Next Door by Thomas Stanley
A very well-written book that shows to the rest of the world that millionaires are not the ones who look like millionaires. This book does not cover any investing approach but gives a lifestyle direction and a good eye to seize a millionaire and learn from them.
2. Your money & Your brain by Jason Zweig
Well, I was between two books here. The one by Jason Zweig and the Thinking, Fast and Slow by Daniel Kahneman. I chose Zweig’s as it’s more specific to the money and investing aspect. Two of the best books I have ever read! Your Money & Your Brain book will not only help you control your emotions when investing but also shape your way of thinking in general. As you will read and experience later, the hardest part of investing is not to choose where to invest, it’s about controlling your emotions and reactions. Definitely good reads!
3. How a second grader beats Wall Street by Allan Roth
You will find many books talking about asset allocation and the 4 main types of investing: stocks, ETFs, bonds and real estate. I will say that Allan Roth is focusing more on the ETFs in this book but you will still get a good understanding of portfolio management in the simplest form of explaining ever.
If you’re quite familiar with Finance, you can go directly to All About Asset Allocation by Richard Ferri or the value.
Interested in learning more about ETF? Read this article for the pros and cons of ETF.
4. The little book that builds wealth by Pat Dorsey
This little book is quite interesting as it gives a solid approach to investing and how to identify if the company is worth your investment. Pat Dorsey, the Director of Research of Morningstar, provides food for thought and the idea of how to research for the best individual stocks. There are not enough good books on how to invest in individual stocks, so make sure you put this book in your reading list.
5. Little Book of Common Sense Investing by John Bogle
The founder of index funds, John Bogle, explains why investing in an index fund is one of the best ways and what you should be aware of when doing so. To be more specific, investing in an index fund or ETF you’re actually buying a bit of every company in the stock exchange.
6. Rich Dad, Poor Dad by Robert Kiyosaki
Classic read! Rich Dad, Poor Dad is a masterpiece and will give you the push you need to start your investment and real estate journey. Another good read on the subject is the Millionaire Real Estate Investor by Gary Keller with a deep understanding of real estate operations and industry.
You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ – Warren Buffet
To sum up, value investing is not an easy skill to learn. Besides learning and deciding how and where to invest, you need to understand yourself well enough, learn self-control and develop your strategy.
This short list of the best six books for beginner investors will give broad scope to investing and will help you set a strong understanding of the subject. Remember as long as you don’t lose money, you’ll become a great investor!
Research and invest responsibly.