A quick search on google or Pinterest will give you countless must-read books for beginning investors. After we paid off over $80,000 of debt, I knew I was going to become one of those beginning investors. So it was time to hit the library and start reading some of these books myself.
When I first started thinking about investing for retirement, I had no idea where to start! Thankfully, we have a little bit more time to think about our options before we pull the trigger.
For the past several months we have been diligently saving up for our fully funded Emergency Fund. (You can read about our last Finance Goal Update here.) But now that we are at 75% of our target goal, I have been reading anything and everything I can get my hands on to educate myself on investing for beginners.
As I have done my due diligence, I have narrowed it down to five must-read books for every new investor. Some of them I have already read. Others I haven’t started yet, but are definitely on my short list to read since they are recommended by pretty much every finance writer out there.
If you are ready to start getting serious about investing, I hope these books help you as well! Sidenote: if you are anything like me, I knew NOTHING about investing when I first started my research. I learned early on that there are a ton of words that will come up again and again as you read.
My post on Investing Terms for Beginners would be a great resource for you to check out first. And I’ve created an easy, one-page cheatsheet of most of the financial lingo out there. My Investing Terms printable is free for anyone who subscribes to Simple Finance Mom. If you would like to download this freebie, you can leave your email at the bottom of the post and I will send you a link to it. (It is a free perk for my readers.)
The Bogleheads’ Guide to Investing is a goldmine! I would venture to say if you can only read one book, make it this one right here. It is written by three men who fully believe in and teach the investing advice of Jack Bogle, inventor of index funds and founder of Vanguard. It is a little dated in some things, but the majority of it is applicable to all investors.
The authors do a great job explaining big concepts in a simple way. And you know I’m all about simple finances! 😉 Stocks, bonds, mutual funds, diversification, asset allocation, taxes, and how to find the right financial planner are just a few of the things you will learn about. There is a lot of terminology (with a glossary in the back of the book) so it is great for newbies who need things really broken down. SO. GOOD! And pretty easy to read.
The Random Walk Guide To Investing was written by Burton Malkiel, a trusted and well-known American economist and former professor at Princeton University. This was the first book I happened to pick up. Lucky me! The no-nonsense advice given in this little gem really got me thinking. It broke some major misconceptions I had about the stock market and investing, and it empowered me in realizing I CAN do this!
The Richest Man in Babylon, written by George Samuel Clamson, is different than all the rest. It is a very short read, about 140 pages. It is a collection of financial knowledge shared through parables set in ancient Babylon. Very interesting and thought-provoking read, I must say. (And did I mention it’s only 140 pages?)
The Automatic Millionaire is a book that I just read while we were traveling across the country for a family wedding in California this month. David Bach wrote this book, basically outlining the importance of starting investing early, making automatic monthly deposits into your investment accounts, and letting compound interest do the rest of the work.
I am all about paying yourself first, so I was excited to see how I can apply these principles from the get-go. It definitely gave me the motivation to commit to regular automatic payments to our investment accounts. His rule to pay yourself first was also really thought-provoking. This is definitely a great read for the average investor who is a little skeptical about how they can really make a difference without a ton of money at their disposal.
The final book on my must-read list is The Intelligent Investor: The Definitive Book on Value Investing by Benjamin Graham. I’ll be honest and say that I’m saving this one for last because it seems the most intimidating to me! It is on literally every “recommended list” out there, and I will obviously learn a lot. It just seems like a heavier read than some of the others.
But, when everyone and their mother is recommending the same book to me, a girl can take a hint.
Hopefully, you were able to see some of the wisdom in these books and have been inspired to read them for yourselves.
We should be finished saving our fully funded Emergency Fund in the next few months. When that happens, the next step for us in financial freedom will be investing about 15% of our income. I can’t wait to finally put some of these principles to work.
What are some books that you would recommend to new investors? Do you have any go-to books that you still reference?
**P.S.** If you are looking for free finance printables to help you stay even more motivated, enter your email in the little box at the bottom of this post to get instant access to the free printables in the Simple Finance Toolkit that is exclusive to my subscribers. Budgeting forms, bill trackers, goal setting handouts. They are yours for the taking and will help you stay organized and motivated.
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