[This article on favorite investing books may contain affiliate links for which I receive a commission at no cost to you. I only recommend products I use and trust.]
One of the best ways to learn about money is through investing books. Not everyone has time to take a class but a good book can provide you with a lifetime’s worth of lesson in a few hours. Investing books can run the gamut. They can be about stock investing or simply managing your money. In the end, the goal is to grow your wealth and there’s rarely a better starting point.
As a member of the blogging community, I’ve met a lot of smart friends who are on different parts of their journeys. I wanted to get their perspective on what makes a good investing book. Not every book hits the spot for everyone. However, these different perspectives should give you a few to try. A journey of a thousand miles begins with a single step. For many on their money journey, that beginning can be a good investing book. Here are a few that have made a big difference for some great people.
Melissa – Perfection Hangover
I never realized the importance of personal development until about 5 years ago. I never enjoyed reading because it takes time, and there are many things I’d rather be spending my time doing than sitting with a book.
When I was introduced to audio books, however, my feelings changed. I was able to listen to books while doing everyday tasks such as getting ready for the day, cooking breakfast, or while driving to town. My favorite personal finance book is about mastering your money mindset. “You Are a Badass at Making Money‘ by Jen Sincero has completely changed my money mentality.
With a few short changes, such as being grateful for things I have and things I have yet to receive, my income has grown and everything has shifted. Whether you think you have a great relationship with money or are living paycheck to paycheck, I urge you to try this book out!
Adebayo – Dr. Breathe Easy Finance
There are a lot of financial books out there and I have read a significant amount of them.
My favorite one is “The Richest Man in Babylon“. This book takes the cake in terms of how entertaining it is to read and how simple it is to understand and follow. One of my favorite sayings is that “financial tips has always been the same since the Neanderthal era”. We merely substitute stockpiling nuts and other food for the winter with emergency funds. I love the book so much I wrote an awesome summary. However, here’s a brief rundown.
So, about 3000 years ago, in the city of Babylon, a poor man named Bansir and his friend Kobbi were contemplating their life and why they were poor.
They both explained how they have worked all their life and at the end, they had nothing to show for it. On the other end of the spectrum was Arkad who was the richest man in Babylon at that time. Arkad rode a golden chariot and was always liberal in his spending and also gave a significant amount of his wealth to the poor. Bansir and Kobbi both decided on their next best step… which is to learn from the richest man if they want to be rich.
When they asked Arkad how he became rich, he then proceeded to explain to them how he saved his money at a very young age and invested his money and now loved off the interest. He referred to money as slaves working for him so he doesn’t have to work anymore.
Here are the 7 main points Arkad refered to as the cure for a lean purse.
1) Start thy purse to fattening: save money as early as possible- at least 10% of your income.
2) Control thy expenditures: don’t spend more than you need.
3) Make thy gold multiply: invest wisely and invest on things that you understand.
4) Guard thy treasures from loss: avoid investments that sound too good to be true.
5) Make of thy dwelling a profitable investment: own your home.
6) Ensure a future income: protect yourself with insurance.
7) Improve thy ability to earn: strive to become wiser and more knowledgeable in what you invest in.
Riley – Young and the Invested
The book “The Most Important Thing: Uncommon Thoughts for the Thoughtful Investor” by Howard Marks does a wonderful job of framing the benefits and philosophy of value investments.
In particular, he goes into a well thought out, approachable discussion about the relationship between risk and reward in the world of investing.
Marks lays out a strong case. He claims that reliably successful investing depends on deriving an accurate assessment of intrinsic value and investing when the asset’s price trades below this value.
He claims the most important things are; (1) understanding how to value an investment and (2) identifying how market price movements affect current value. He states, “To value investors, an asset isn’t an ephemeral concept you invest in because you think it’s attractive (or think others will find it attractive). It’s a tangible object that should have an intrinsic value capable of being ascertained, and if it can be bought below its intrinsic value, you might consider doing so. Thus, intelligence investing has to be built on estimates of intrinsic value. Those estimates must be derived rigorously, based on all of the available information.”
I highly recommend this book to anyone.
Todd – Invested Wallet
Oh man, I’ve read quite a few great books about personal finance and investing that really helped shape my mindset so it’s certainly hard to choose.
However, if I had to choose one book, I would choose “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy” by Thomas J. Stanley and William D. Danko.
The book explores about America’s millionaires and the seven common traits among them.
The authors discovered that many of the wealthiest people do not appear wealthy because they live well below their means. I’ve never really thought about before until reading this book, but it’s pretty incredible to how simply they put it. Additionally, the authors cover how most of these people have accumulated and kept their wealth.
I really like it because it outlines the main points of how to do this yourself which are quite simple but make a lot sense. It also helped set the foundation for my mindset when it came to money and finances. I think anyone who is interested in personal finance should read this book. I try to read it once a year.
My introduction to the world of personal finance was like most… Dave Ramsey. Although Dave got me started, he didn’t stick with me very long.
My world totally changed when I read the “Automatic Millionaire”. David Bach focuses on two main points in this book. Paying yourself first and the power of compounding interest.
David details how even a small amount of money saved today can amount to millions down the road. It’s an amazing concept to teach your kids. And it’s a book I wish I read when I was much younger.
One of the best points in this book is what David calls the “Latte Factor”. I’m sure you’ve heard that before. The point is that tiny expenditures can add up over time and that money can be better saved and invested.
Camilo – The Finance Twins
If you are like most people, you keep most of your money in a checking account. Maybe a savings account.
You’re simply intimidated by investing because you are afraid of losing money and you don’t know what to invest in.
You might even have a 401K retirement plan at work that you know you should be investing. However, instead the money is just collecting there.
If this sounds familiar or you simply want to learn how to invest in a simple but effective way, look no further.
You need to read “The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns” by John Bogle.
The author is the late founder of Vanguard, the investing jaugernaut. However, if you think this book will show you how to pick which stocks will go up, you might be disappointed. You see, the beauty of Bogle’s investment philosophy lies in it’s simplicity.
He makes an incredible argument for why you should invest by selecting low cost index funds that track the market averages. What that means is that instead of picking and buying individual stocks you should simply buy all of the stocks so that you own a diversified portfolio. This protects you from the risk of picking the wrong stocks, while guaranteeing that you will earn the average market return.
Not intrigued by the prospect of earning the average market return? What if we told you that the average PROFESSIONAL investor on Wall Street doesn’t even consistently beat the average market return over the long run. That’s right, you can beat professional investors over the long run by utilizing index funds.
So if you are sitting on your money too afraid to put it to work, you need to read this book. You’ll be glad you did.
Andrew – Wealthy Nickel
There are a lot of great personal finance and investing books out there. I would recommend reading almost any on this list.
To branch out a little, my wife and I got involved in real estate investing about 5 years ago and haven’t looked back. Once of the first books I read on the subject was Gary Keller’s “Millionaire Real Estate Investor“.
The book has tons of stories from regular people who used rental properties to build wealth on the side during their working careers. One of the things I liked most about the book is that it was realistic about what to expect when investing in real estate. It is not a get rich quick scheme. If done right it is a slow and boring path to wealth. But once you reach a certain point, it starts to snowball quickly as tenants pay down the mortgage and cash flow starts ramping up.
If you’ve ever considered real estate investing and thought that you just didn’t have time to learn or it was too hard, I highly recommend starting with “The Millionaire Real Estate Investor“.
You may find it’s not the right path for you. However, you may also find that it’s not as hard as you thought, and the benefits of putting in a little work now will pay dividends for many years into the future.
Robert – Real Money Robert
I’m going to go a little off the reservation here, if that’s OK. There are a ton of personal finance books out there and a lot of them paint very similar stories. Pay off debt, build an emergency fund, save for retirement, blah, blah, blah.
It’s more of the same boring stuff, prepackaged in a different way, told through the eyes of different people.
And although that is great and the advice given in all of these books is stellar, I like to take a much more personal approach to things.
I have a very entrepreneurial spirit. I spell that out quite a lot on Real Money Robert.
I’ve always been a serial side hustler, and recently turned one of those side hustles into a business.
Something that gets lost in the shuffle sometimes is how freaking hard is really is to be an entrepreneur.
It’s rough at times.
Long hours, hard work, and sometimes little payoff.
Anyway, that’s a long-winded way of telling you that I’m going to talk a little bit about Chip Gaines’ book, “Capital Gaines”.
As someone with an entrepreneurial spirit, this book really spoke to me.
Chip gets down to the nitty gritty in talking about his personal experiences with growing multiple businesses and the failures and shortcomings that came along the way.
Through hard work, perseverance, and treating people right, he was able to achieve a great deal of success, even through countless mistakes.
We all make mistakes, and we all stumble through life. What sets some of us apart is the ability to keep getting up and pushing forward.
Highly recommend “Capital Gaines” by Chip Gaines.
Time In The Market
It’s me! You’re on my blog so you don’t need a link. First of all, I’d like to thank everyone who participated for their contributions. There’s a few books here that I’ve added to my wish list and plan to read soon. Make sure to check out all their blogs by clicking the links above their recommendations. They’re all full of good stuff.
However, I’d still like to talk about my favorite book too!
I first spoke about it in my post about the three best beginner investing books. It’s a book worth mentioning again in case you missed that post. After all, it’s one of the books that got me started on this investing journey.
“The Bogleheads Guide to Investing” has been my guidepost for investing ever since I read it in college. Investing can get complicated. However, the authors of this book do a fantastic job of breaking it down into easy to understand chunks. As a result, this book can be given to anyone even those who are just starting as investors. Despite that accessibility, it still retains value even for more experienced investors.
This is the book for anyone who wants to learn about personal finance in general. However, it’s more than that. It’s not just the same old nonsense about stocks and asset allocations. That stuff is there but you’ll also get a lot of invaluable information about the philosophy of money and how to prioritize your saving to reach your goals.
If there’s one investing or money book in general to read, this is it. In my mind, investing books don’t get better than this.
Let us know what you think and whether or not we missed any great investing books!