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Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay
A Random Walk Down Wall Street — I did not read this until I was in my 40s. I just wish someone would have shoved a copy in my hands when I graduated from college. The single best book on how the financial markets work that I have read. All of my kids have received a copy when they graduate.
It was one of the first investment books I read. Burt Malkiel, like Jack Bogle, has been hugely responsible for the acceptance and growing popularity of indexing.
The Single Best Investment – Lowell Miller
For me, the choice of “best” or “most influential” book is related in large part to when I first read it. I started investing in 1988 by simply contributing to my 401-k along with investing in a taxable account. I did not know what I was doing. The first useful books I remember reading were “The Millionaire Next Door” by the late Stanley and Danko in 1996, and the late John Bogle’s “Common Sense on Mutual Funds” in 1999. Bogle, more than any other, probably had the greatest influence on my investing behavior. “The Intelligent Asset Allocator” by Bernstein was a classic work published in 2001, especially for me, a fellow neurologist, who sadly lacks his gift for financial and historical analysis. I have since read more or less everything Bogle and Bernstein have written, as well as most of the other authors cited by contributors to this blog. Warren Buffett’s annual letters are filled with wisdom. I retired three years ago and still learn something every day, and while I will never be a financial expert, I have the tools to make appropriate decisions to manage my portfolio. The one book which I find to be the best now is the Humble Dollar’s “Money Guide”, by Clements, because of its comprehensiveness, lucid writing, continuous updating, and the fact that it is enriched by an endless stream of comments by contributors and readers.
Unconventional Success by David Swensen.
His advice kept me out of bonds (except for TIPS) and for that I am grateful.
This is definitely in my top 5.
A Simple Path to Wealth
Mostly great comments so far, but I have to put one above the others: Stocks for the Long Run by Jeremy Siegel. Exhaustively researched. Great charts. I refer back to it sometimes to remind myself of certain data points. Makes the case for buying and holding stocks over other asset classes better than any other author.
Buffett The Making of an American Capitalist by Roger Lowenstein because it introduced me to Buffett as a young man. This led me to read more from others and began my self education. Cash Flow Quadrant was great for helping me see concepts I had never heard discussed in high school or among my circle of friends and family.
I also really enjoyed the Buffett book by Lowenstein. I just might re-read it now.
A Random Walk Down Wall Street by Burton Malkiel.
It was long ago, but a book that really opened my eyes and changed the way I thought about money and investing was The Millionaire Next Door (echoing Stan Wolf). And, while not a book, I’ll also echo Philip Stein regarding Jonathan’s columns in the WSJ. I appreciated the fact that they were were written in such straighforward and non-technical language that a rookie like me could understand and learn from them.
“Seven Habits of Highly Effective People” is still my favorite – not a financial book but helpful for most things in life including finances. I enjoy reading “Your Money or Your Life” (Joe Dominguez / Vicky Robin) every now and then. “How to think about money” is another favorite one. I gave copies to some of my daughter’s friends and also a few young coworkers. They all loved it.
”I Will Teach You To Be Rich” by Ramit Sethi. Book based on common sense (IMHO) but with a focus that only certain things matter such as your housing and transportation costs and that avocado toast or a latte will not stop you from being rich.
Agree with all of the above. Surprisingly Warren Buffett isn’t on my list: he has access to so many private investment deals that aren’t available to regular investors that I felt these were not helpful to read about. I enjoyed reading The Intelligent Investor by Benjamin Graham for principles of value investing; Jason Zweig’s The Little Book of Safe Money has great advice on balanced investing and planning.
I’ve been reading the WSJ daily for 40 years. I started reading it at the college library and it has been a great resource. How else would I have been able to learn from Jonathan? I remember he used to respond to my emails back in the day. Still appreciate that.
RICH DAD, POOR DAD by Robert Kiosaki. Learned to identify assets from liabilities. Changed my thinking on spending & what I was spending on. Also by him, CASHFLOW QUADRANT. Drove home more invaluable points. I was also impressed with THE MILLIONAIRE NEXT DOOR. Very interesting book. Taught me to not believe everything I assumed about others.
I enjoy John Bogle’s “The Little Book of Common Sense Investing”. Beautifully written and really help set the right mindset and framework for being a long term small investor.
I have several favorites but always encourage people to read a variety to get a broader perspective. After reading How To Get Rich and Stay Rich by Fred J. Young, I wrote Mr. Young and he invited me to have lunch. It turns out he married a girl from my hometown of Fort Scott, Kansas. It also turned out that Fred had spent time with Warren Buffett in 1958 and afterwards had lunch with him several times. He never mentioned that in his book. I was fascinated. If I wrote a book about getting rich and knew Warren Buffet, I’d find a way to include that in my book.
I think most readers would agree that becoming a better investor through self-education requires you to read widely. Therefore, it’s hard to identify one great financial book. There are many good ones available from authors like John Bogle, William Bernstein, Burton Malkiel, and, of course, Jonathan Clements.
Having said this, I experienced my greatest education and inspiration from the series of Getting Going columns Jonathan wrote for the Wall Street Journal. I’ve been a long-term subscriber to the Journal and was fortunate to discover Jonathan and his weekly columns when I began trying to educate myself those many years ago. I found his weekly columns to be particularly effective because they were extremely well-written (of course) and were delivered in small doses which made it easier for me to absorb the lessons that needed to be learned. I dutifully cut out the column each week and collected them in a manila folder which eventually grew to about two inches thick. I still peruse these articles from time to time.
One of my most important epiphanies came from one of Jonathan’s earlier columns where he stated that you didn’t have to beat the market to reach your financial goals. This one insight primed me to absorb other important lessons like the need for diversification, the importance of minimizing investment costs, and the advantages of index funds over actively managed funds.
I often thought that it would be wonderful if Jonathan could cherry-pick his best columns from his Wall Street Journal years and assemble them into a book for the benefit of newer generations of investors. My suggested title for such a book: Jonathan Clements Greatest Hits.
Many thanks for the (overly) kind words.
Winning the Loser’s Game, by Charlie Ellis. It’s not about winning, but about avoiding mistakes or “forced errors.” It makes a great argument about why trying to beat the markets usually ends up making us poorer.
My favorite investment book is Where are the Customer Yachts by Fred Schwed. It is both funny and profound.
The best financial book I ever read was The Money Masters by John Train. It’s an old book that I learned about Warren Buffett from before he was very famous.
Berkshire Hathaway was then traded “by appointment” on the Pink Sheets under the symbol BKHT at the outrageous price of $2000 per share.
I did the math and his 16 per cent compound return was unbelievable.
I’ll have to check this book out.
That was one of the first investment books I ever read — full of colorful characters. Wall Street seems a little more bland today.
So many good ones I’ve learned from but if I had to pick ONE book, it would be How to Think About Money by Jonathan Clements.
I completely agree. Hands down to the best book. It covers 99% of what one needs to know about finance, is practical, based on factual research and written clearly in just ~150 pages.
It’s the book I find myself recommending the most to those asking me about money and investing.
I’m glad I read through all the comments before replying. The first book that cam e to my mind was also How to Think About Money. The comments reminded me of several others that were also good to great, including The Millionaire Next Door which was influential on me years ago, but the question was about the “best.” That’s still How to Think About Money.
The Millionaire Next Door
I’m a huge fan of William Bernstein’s The Four Pillars of Investing.
I also like David Swenson’s The Ivy Portfolio, especially the breakdown he does on various asset classes and their suitability for individual investors.
There are many good books out there, a couple that come to mind are How to Make Your Money Last and The Bogleheads Guide to Investing. Much depends on where you are in your investing journey, the right book at the right time can be magic.