Anyone can build tremendous wealth by investing as early as possible and the best investing books are a secret available to everyone who is willing to put in the time and effort. Research does show that the key to building wealth isn’t so much about picking the right stocks as it is simply saving and investing more money over time.
Winning in the market is tricky and difficult for rookie investors like us, and you’re better off not even trying. In general, you’ll get the best results by steadily increasing the amount of money you transfer into your investment portfolio — from 1% this year to 2% next year, and so on.
But that does not necessarily mean you won’t benefit from having a solid understanding of vital personal finance concepts and strategies to put you in good stead.
That’s because as your income grows and your life becomes more complex, you’ll be faced with an increasing number of increasingly complicated financial decisions — from how much house you can actually afford to how to allocate your money between different types of investment accounts etc.
The more knowledge you have about personal finance and investing, the better positioned you’ll be to make decisions that help you get what you want out of life and build that wealth fund we all strive for.
Here are some of the best investing books that I feel can put you in a solid state of mind and readiness when it comes to your goal.
The Millionaire Next Door by Thomas J. Stanley and William D. Danko
What’s always true about building wealth is that you can only achieve it if you don’t spend it.
A book written in 1996, it takes an extensive dive into the financial behavior of actual millionaires.
And there are many timeless lessons to be learned from this wealth of research — lessons that are particularly applicable when you’re at the beginning of your financial journey.
The most important? Most millionaires live well below their means.
The takeaway in reading The Millionaire Next Door is similar to Bogle’s classic view on index fund investing: it’s not as much of a how-to guide as a book that will shift your mindset in a very positive way and is a sure winner as one of the best investing books out there.
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The Little Book of Common Sense Investing by John C. Bogle
Bogle describes how to implement a low-cost, tax-efficient investing approach anyone can use to achieve above-average returns.
What I’ve found true about index fund investing (which is a type of investing that mirrors the returns of the market as a whole) is that you have to have an “I now get why this works so well” moment in order to truly appreciate the concept.
In turn, this allows you to stick with the strategy through thick and thin, understanding that it’ll almost certainly lead to better outcomes than a more active investing approach.
There is one concern with this book: it may seem too simple. But study after study has shown this strategy will continue to outperform other investors and will remain a solid plan as one of the best investing books.
I Will Teach You To Be Rich by Ramit Sethi
The book helps you identify the highest and best use of your money, noting that for many people that’s not investing in stocks. The delves deep into the power of automated strategy and shows that with proper foundations, anyone can setup their own automation.
For many people, the most important aspect of the book will be Ramit’s advice on putting your finances on autopilot, in other words, creating systems and processes that automate good financial behavior.
While there’s a time and a place for theoretical knowledge, with all the best investing books, Ramit’s advice is very practical. The book is filled with step-by-step blueprints and processes on money management.
Your Money or Your Life by Vicki Robin and Joe Dominguez
The big idea of the book is that what makes us happiest in life isn’t more stuff or more wealth, but rather freedom of time.
It’s one of the best investing books that instigated me to start looking at ways to not just become debt-free but financially independent so I can pursue the things I really love doing.
The norm is – graduate, get a job, work, save money, work, save money, pay off debt, work some more, save some more money, pay some more debt – you catch my drift.
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This is a routine a great deal of the planet settles into without really thinking about the connection between money and the entire range of life. This book forces you to reconsider your life choices.
Once this big idea is presented, the book lays out how to gain more time by achieving financial independence i.e., the point at which passive income from your investments can cover your expenses.
The Total Money Makeover by Dave Ramsey
From this book, you’ll get a combination of very practical advice and the motivation necessary to jump-start your debt payoff journey which makes it a solid choice for one of the best investing books out there. He has fine-tuned and perfected a message that works — one which has inspired those struggling the most with their finances to take action.
You can spend less than you earn or you can earn more than you spend. These are not finite or even competing goals.
For the Millennial, and every generation thereafter, such a lifestyle might be mandatory rather than optional. Instead, we’re told a small sacrifice of 2, 3, 7, or 15-years is needed. Does this timeline seem inspired by the idea that we are all driving towards retiring one day in the distant future, like at age 67? More in the book “haha”
The books above can help provide a strong foundation for making not only good financial decisions, but also for good life decisions. There are many books out there about investing and growing your wealth, all of them very good as there can never be one opinion on any subject, so it is important to stay on the learning path about your wealth and always add to your best investing books list.