3 Great Investing Books for Beginners
Learning about financial concepts can feel intimidating. Even finding a starting spot can prove challenging. If you search for an investment term on the Internet, you often end up with an alphabet soup of complex financial terms.
A better entry point can be picking up a book by an expert who thoughtfully and sequentially presents and explains financial concepts and investing topics. Resources like these can help you realize that investing doesn’t have to be intimidating or complicated. Here are the best investing books for beginners that are great places to get started. (Prefer podcasts? This list has you covered.)
1. A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing, by Burton Malkiel If Graham teaches you how to evaluate a business, Burton Malkiel explains why that might not help you. The Princeton economist argues that markets demonstrate efficiency because people are analyzing a company’s value. (Efficiency means a company’s share price reflects its current worth, and its price will change when new information alters a business’ worth.) Malkiel recommends earning the market’s return instead of beating it, which he compellingly argues is good enough.
The book was first published in 1973, but updated editions have added contemporary topics. These include exchange-traded funds and investment techniques like smart beta (which Morningstar prefers to call “strategic beta,” but I digress).
2. The Essays of Warren Buffett: Lessons for Corporate America, by Warren Buffett Many consider Warren Buffett to be the best modern investor. He has risen to fame as Berkshire Hathaway’s CEO, a position he’s held for over 50 years. Berkshire Hathaway invests in high-quality businesses with strong growth potential. But Buffett only buys such companies when they’re selling at an attractive margin of safety (hat tip to his mentor, Benjamin Graham). This makes Buffett an extreme stock-picker. Under his reign, Berkshire Hathaway’s growth has far surpassed that of the S&P 500, a testament to the success of his approach.
Each year, Buffett writes an annual letter to Berkshire Hathaway shareholders, and all of them are published on the company’s website, so anyone can read them. Buffett writes in a straightforward style that is accessible to investors of all skill levels, and he’s often very funny to boot. “The Essays of Warren Buffett” weaves together Buffett’s essays into a sequential, cohesive book.
3. I Will Teach You to Be Rich, by Ramit Sethi Advisor and The New York Times best-selling author Ramit Sethi outlines a six-week program for 20- to 35-year-olds to learn the four pillars of personal finance–banking, saving, budgeting, and investing. Sethi shares his strategies for eliminating student loans and debt; finding a balance with saving and spending every month; and preparing to purchase a house or car. In the newest edition, he includes stories from readers and insights on the psychology of investing. Sethi strives to demonstrate to investors how to make investments that grow with them and their goals, and how they can spend their money on the things they want without feeling guilty.
