Purpose
Purpose
It's imperative for young adults and professionals to start investing early. One of the main reasons for doing so is to obtain the power of compound interest. By holding long-term investments, one can allow his or her assets to generate more returns. Investing just a few years earlier could translate into tens of thousands, if not hundreds of thousands of additional funds for your retirement nest egg.
But while it is important to invest early, it is also important to invest wisely. These five classic investing books can provide indispensable business and finance insights for young investors.
The Little Book of Common Sense Investing
The Little Book of Common Sense Investing
John C. Bogle is credited with creating the first-ever index fund, so he surely knew a good bit about investing. He was also the founder of Vanguard Group, and it was rumored that he and Buffett were the best of friends. Buffet even gave his endorsem*nt to Bogle’s book, saying that “investors large and small” should read it.
"The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns" takes the surprising approach that for many investors, the stock market is a lose-lose proposition. Bogle then explains what he learned to turn the odds in his favor. This isn't his only book, but it’s the one that covers his own personal innovative techniques and truths in a relatively short and easy read.
The Book on Rental Property Investing
The Book on Rental Property Investing
If you're looking to profit off of rental properties, opt for this great starter book, "The Book on Rental Property Investing: How to Create Wealth and Passive Income Through Smart Buy & Hold Real Estate Investing." In almost 400 pages, author Brandon Turner breaks down the tips and tricks you'll need to become a successful rental property investor. Reviewers praise the practical, "how-to" style of this investment book, making it suitable for both beginners and experts. You'll learn about the author's four easy strategies, how to find incredible deals, ways to pay for your rentals, why so many real estate investors fail, and more. You can trust Turner's advice, too, as he's an active real estate investor and co-host of The BiggerPockets Podcasts, one of the top business podcasts today.
A Random Walk Down Wall Street
A Random Walk Down Wall Street
Investing doesn’t necessarily mean you devote hours on managing a broad-based, extensive portfolio, and Burton Malkiel knows that. "A Random Walk Down Wall Street" is invaluable reading for those who are trying to get a handle on their first 401(k)s. First, you have to learn to talk the talk, or at least understand what’s being said when someone else speaks it.
Malkiel’s book includes some handy definitions of investment terms, and it applies them to various investment strategies geared toward different stages in life. He emphasizes long-term investments rather than get-rich-quick schemes, and how to predict prices and avoid common mistakes. This is a revised edition of a book that’s been around for a while. "A Random Walk" has sold more than 1.5 million copies to date.
The Essays of Warren Buffett
The Essays of Warren Buffett
The fourth edition of "The Essays of Warren Buffett: Lessons for Corporate America" was released in 2015, and it’s a worthy read for learning from the very best. You’d be hard-pressed to name a more successful investor than Buffett, and he’s taken the time to share what he knows and has learned on the subject over the years.
The title addresses “corporate America,” but you can take that to include shareholders. The book offers an excellent explanation of the relationship between corporations and their shareholders, which makes it ideal for those new to investing. Plus, this collection of essays spans more than 50 years.
Thinking, Fast and Slow
Thinking, Fast and Slow
Daniel Kahneman knows a thing or two about thinking—he’s a psychology professor at Princeton University and understands a lot about finances, having won the 2002 Nobel Prize in Economic Sciences.
His New York Times bestseller, "Thinking, Fast and Slow," delves into how your thought processes can affect your success in investing. Everyone harbors their own little biases, sometimes subconsciously. Kahneman explains how to identify your own and lock them away so you can make investment decisions without their input, thinking clearly, rationally, and analytically. Note that this book isn’t just about investing, although that’s its focus. Kahneman also explains how biases can affect our everyday lives and other financial decisions.
Rich Dad Poor Dad
Rich Dad Poor Dad
A classic memoir, "Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!" has remained one of the most influential personal finance and investing books since it was first published over 20 years ago. In it, author Robert Kiyosaki shares his story of growing up with "two dads"—his real father and his best friend's father, or his "rich dad"—and how both men influenced Kiyosaki's views on investing. Candid and inspirational, this book challenges the myth that you need to earn a high income to become rich, explains the differences between working for money and making your money work for you, and more.
Conclusion
Conclusion
Of all investment types, books are probably ones that pay off with the highest returns.
Market returns may vary, new sectors may emerge and old ones may decline, valuable commodities today may become worthless tomorrow, but knowledge gained from books is something that provides you with consistent returns for the rest of your life.
Which other books do you think we should add to our list of the best investing books for beginners? Tell us in the comments below.
