A common characteristic of high achievers is they are generally voracious readers. Elon Musk, CEO of Tesla Motors, is said to read up to two books daily, and former Microsoft CEO Bill Gates claims to read 50 books annually. Investing guru and chairperson of Berkshire Hathaway Warren Buffet reads between five and six hours per day. But it isn’t just the reading that is important; it is also what you take from it to apply to your life, particularly when it comes to such sensitive and personal topics as finance and investing.
Benjamin Franklin discussed books and learning with the following quip of wisdom, remarking that reading “may give advice but cannot give conduct.” Part of the process is taking what you learn from books and nurturing those principles in the real world.
Books, as important as they are, are not a substitute for regular consultations with your financial professional, but rather a means of expanding your knowledge base and encouraging specific actions. From books, you learn tips and tricks which you can then apply to your life.
If you aren’t familiar with literature regarding finance and investing, here are six influential books to get you started and moving in a different direction than you may currently be on. Because people are so different and finance and investing are highly personal, these books aren’t in any particular order, as other people will get their own ideas from each one.
1. The Intelligent Investor by Benjamin Graham
Benjamin Graham is considered the father of value investing. Though written a long time ago, the intelligent investor still offers investors critical principles associated with developing an investment strategy. These include:
- Understanding the value of the business you are investing in is essential.
- Be willing to do your research. Graham believed conducting adequate research is a beneficial way to determine the true value of a stock.
- Don’t get caught up with investing with the herd.
- Be objective in your investment strategy.
2. The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
Warren Buffett is considered the greatest investor of our time. His biography provides several insights into his investing strategy that readers may consider applying to their own lives. Some of these include:
- Invest early.
- Invest as regularly as possible.
- Be diversified.
- Have a strategy.
3. The Way to Wealth by Benjamin Franklin
Though this is more of an essay, its value in six or so pages equal the 300-400 pages of other financial industry and investment strategy works that have gone to press. The central theme is less financially technical as it is a proposition about personal wealth and financial management using maxims that are still recited today, including, God helps those who help themselves, early to bed, early to rise makes a person healthy, wealthy, and wise, and there are no gains without pains, and many more that revolve around a strong work ethic, properly managing your money, and staying out of debt.
4. The Psychology of Money by Morgan Housel
Morgan Housel offers readers an honest and pragmatic look at money and how people behave regarding money. He uses 19 enticing stories to dissect the strange ways people think about money and explores the perspectives and wisdom of the financial and investment industry’s leading thinkers.
5. Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever by Robin Wigglesworth
This book analyzes the beginning and rise in popularity of index funds from how a handful of academics created the concept for indexing and how an industry was carved out using those principles. Along with these new ideas, were seemingly random events leading to the phenomenon of index fund investing.
6. Napoleon Hill’s Your Millionaire Mindset: A Practical Guide to Increase Your Personal Wealth by Don Green
A fairly obscure book of a mere 156 pages, Your Million Mindset, focuses on the principles made famous by motivational and financial guru Napolean Hill and tackles concepts that everyone can relate too using stories and wisdom from great financial and investing minds. The idea is that wealth is not just about how much coin you have in the coffer, but wealth in the sense of being debt-free, having autonomy to live as you wish, and understanding the principles of growing and preserving money based on your own lifestyle and goals.
Start a New Financial Chapter with a Financial Professional
There is so much to learn from the great books written by or about those who were willing to share with the world the expertise they acquired in their field. The breadth of knowledge is invaluable, and you may consider discussing some of the tips you learn in your readings with your financial professional to see what impact they might have on your financial strategy and goals.
Important Disclosures:
Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
Sources:
The Snowball: Warren Buffett and the Business Life Book Summary (youexec.com)
How to Invest Like Benjamin Graham | The Motley Fool
Book Review: Trillions | CFA Institute Enterprising Investor
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