10 Best books on Investing everyone should read
June 20, 2021
Investing is a topic most people run away from. But it's super important to learn how to manage your money, insurances, etc since this is what would help you in planning your future goals.
Sooner you begin investing better it is. As soon as you start earning you should start planning your financial goals.
Knowledge is Power. The more that you read, the more things you will know. The more that you learn, more powerful you become.
For the world
Here are 4 books that will get you started with investing. These are relevant to global markets (mostly focusing on US markets) but totally relevant for most of the people.
The Psychology of Money
The Psychology of Money by Morgan Housel is a fresh take on how people have relationship with money. He particularly focus on human component and how one needs to strike a balance between investing and happiness (peace). As the title suggests it's talks about the thought process behind investing and not exactly details on how to do trades, stock markets, etc.
Definetely a must read especially for beginners.
Controlling your time is the highest dividend money pays. Spending money to show people how much money you have is the fastest way to have less money
One Up On Wall Street
Peter Lynch shares lessons on how a common person can get great returns from his/her investments with a little research and steady discipline. He advices on simple and effective investing with key practical advices. If you are looking to get into stock markets - this is the book you should read first.
Know what you own, and know why you own it. The trick is not to learn to trust your gut feelings, but rather to discipline yourself to ignore them.
The Little Book of Common Sense Investing
Peter Lynch is one of the most successful investors of all time. Here is another masterpiece from him. Some key takeaways are -
- Consider free cash flow, Earning visibility, Long term debt, P/E ratio when analysing stocks.
- He explains the old "picks and shovels" strategy
- Diversify and invest in companies in different stages.
- Focus on products you use often, those are the companies you would want to invest in.
It focuses more on investing in stock markets. There is a lot more knowledge hidden in this masterpiece.
When there are multiple solutions to a problem, choose the simplest one.
The Intelligent Investor
Benjamin Graham also known as "Father of Value Investing" is also known for his book The Intelligent Investor. Graham explains how value investing wins in almost all the cases. He encourages investors to focus on company finances and completely ignore the market noises. Though the book is over 70 years old, yet lessons are valid in today's world.
The intelligent investor is a realist who sells to optimists and buys from pessimists.
For Indian community
Some love for Indian Community here. Here are 4 books by Indian authors who cater to the Indian mindset and markets. Enjoy!
Let's Talk Money
The book explains various investment options - the good and the bad about them. Also, how should one plan for short, medium, and long term goals. It's an easy source to know about all the available investment options in India. No typical financial terms - just simple actionable insights which you can follow.
If you are from India and want to choose 1 book from the list. This is the one - Highly Recommended!
Coffee Can investing
Saurabh explains wiht example how to build a coffee can portfolio of quality stocks and shows data why it works. He explains why simple and sensible investing in quality stocks outperforms index. The main idea of the book is having a concentrated portfolio of high quality high growth businesses and staying invested for long period of time.
Some people want it to happen, some wish it would happen, others make it happen.
Value Investing and behavioral finance
This is one of those books which should get you started and understand the fundamentals (mainly focusing on Indian stock markets). Value Investing and Behavioral Finance comes as an antidote to investor anxiety and a guide to sane and safe investment decisions. It's a bit repititive, feel free to skip sections as you go.
When others are greedy be fearful and when others are fearful be greedy
Unusual Billionaires book tells the story of these seven companies, handpicked out of 5000 listed on the stock exchange. Through these 7 case studies he explains various lessons of how these companies became giant and created a moat. Not a book if you are a trader. It focuses on long term investing.
Persistence is what makes the impossible possible, the possible likely, and the likely definite.
Bonus Books on Investing
I'll leave you with 2 books which are not directly related to Investing but would definetely help in making the right decisions.
Thinking, Fast and Slow
This is a challenging and a lengthy read. Kahneman explains the two systems that drive the way we think. With examples he describes why human beings behave the way they behave. This book will definetely leave you in awe. It's a masterpiece.
Nothing in life is as important as you think it is, while you are thinking about it.
Rich Dad Poor Dad
- Always look for new ideas
- Look for new ideas. Stop if something is not working out.
- Pay yourself first!!
- Start young.
- Never give up
- The rich buy assets. The poor only have expenses.
- Never stop learning
Winners are not afraid of losing. But losers are. Failure is part of the process of success. People who avoid failure also avoid success.
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