6 Best Investing Books for Beginners
A question I receive on a regular basis is: “what are the best investing books for beginners?” I’m always encouraged when I hear the question as it shows that the people asking want to learn how to invest and grow their wealth..
It can be difficult to narrow down what the best investing books are. Don’t believe me? Go to Amazon and type in “investing books.” The last time I checked there are just over 73,000 books. Talk about overwhelming to wade through. Investing in the stock market can be difficult and reading about it can be even harder. Those that I’d consider the top investing books are the ones that break down difficult concepts in ways that beginners can understand. Having an investing book that is enjoyable to read isn’t too bad either. 🙂
It’s Difficult to Narrow Down the Best Investing Books for Beginners
Seeing as there are so many to choose from, it can be difficult to determine which exactly are the best investing books for beginners. The investing books I tend to recommend are those that promote a certain investing philosophy and not a get rich quick scheme. Many of the books I point to are those that promote a long-term, slow and steady type of approach to investing – not something else.
When thinking over the best books on investing, I generally like to keep it to a short numbered list. As you look over my list you’ll notice some that didn’t make the list like “One Up On Wall Street”, “The Essays of Warren Buffett” or “The Little Book of Common Sense Investing”. That’s not to say those books are not good. In fact, I highly recommend each one. I just wanted to keep my list relatively short. I will also mention that I’ve read all or significant chunks of each of the books on this list and own a few of them to this day. Now on to the best investing books for beginners.
“A Random Walk Down Wall Street” was written by Burton Malkiel back in 1973. Yes, that was just over 40 years ago but his concepts still hold true today. In fact, I would list Random Walk as a must read book for both beginner and seasoned investors alike.
What makes Random Walk one of the best investing books is that it simplifies difficult material so anyone can understand it. That can be difficult to do, but Malkiel does it in style and offers methods to follow that’ll help you as you begin to invest in the stock market.
“The Bogleheads’ Guide to Investing” is a more recent book, written by Bogleheads founder Taylor Larimore in 2007. There is also a companion book he wrote which focuses specifically on saving for retirement which I’ve heard is just as good. If you’ve not heard of Bogleheads, they are basically an homage to the founder of the investment firm Vanguard and espouse his beliefs.
What makes Bogleheads a top investing book is similar to what is found in Random Walk. He offers a simple and straightforward way to start investing. Larimore focuses on a number of things but really hammers home at the need to develop a long-term view to investing that focuses not on day-to-day swings of the market but your overall long-term health.
“The Intelligent Investor” was written by Benjamin Graham in 1934. The kicker is that it’s not the oldest book on my list. Intelligent Investor is a must read for most investors as he, again, takes difficult ideas and boils them down to an understandable level.
What makes Intelligent Investor one of the best investing books for beginners is that he talks at length about how to focus on the long-term health of a company or holding as a way to limit your risk. Again, the idea is focusing on a long-term wealth building strategy and not chasing after gains. If that’s not enough, Graham was Warren Buffett’s mentor so you know he knew a little bit about what he was talking about. 🙂
“The Richest Man in Babylon” was written by George Clason back in 1926. Richest Man isn’t a true investing book, per se, but that shouldn’t hold you back from reading it if you’re a new investor. Clason writes the book in parable form set in, you guessed it, Babylon. The book itself is a collection of pamphlets that financial institutions handed out in the 1920’s and was bound together later as a book.
What I enjoy about Richest Man is Clason covers many basic ideals that anyone wanting to grow their wealth should seek to implement. Considered a classic, Richest Man is relatively quick to read through and should be something added to anyone’s list.
I don’t know that I’d necessarily consider “Common Sense on Mutual Funds” by John Bogle a true investing book for beginners as it’s a little more advanced. However, I don’t believe that should hold it back from a spot on this list.
I believe Common Sense is a top investing book because Bogle takes on an industry that we sink billions into – the mutual fund industry. Mutual funds can be great to invest in, but there are also many out there that charge exorbitant fees and make investing far too complex. Not only does this result in lost money for investors but it makes investing difficult when it doesn’t have to be. Instead, Bogle promotes a value based, broad portfolio approach as opposed to trying to beat the market.
“If You Can” was written by William Bernstein. This is the one book on my list I’ve not read, however I have read his classic “The Four Pillars of Investing” which I would highly recommend. That being said, I have perused the book and knowing his philosophy have no problem recommending it.
What puts this new book on my list of top investing books for beginners is that it’s geared specifically for beginners and younger investors. As I’ve glanced through the book, Bernstein promotes a simple approach to beginning to invest in the stock market. Essentially, focusing on being with the market as opposed to chasing gains. Bernstein boils it down to a discipline that should be followed in order to attain long-term wealth that will continue to build on itself.
If you noticed throughout my list of best investing books for beginners they all tend to focus on the same idea – a long-term view of investing. That includes cutting fees, keeping things simple and not chasing gains. Follow that approach and you’ll generally be happy you did. While investing in the stock market can be difficult, there is no need to make it more so.
Have you read any of these books? Are there any others you’d consider as the best investing books for beginners?
Additional resource: If you’re looking for somewhere to invest with little money, you can open a Motif Investing account for as little as $250. I personally use Motif as they offer a great way to get started as well as allowing for instant diversification, not to mention promotions when you open a new account with them.
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