My colleague Ben Carlson talks about how much more information there is available to young people interested in finance and investing. The same holds for probably any other topic as well. When I first started blogging one of the most common questions was: What books on investing do you recommend? Which I found difficult to answer because the book depends on where you are in the journey. A book that hits hard at the beginning of your investing career may fall flat later on.
Today investors can garner a great deal of information from blogs, podcasts, and videos. That being said, there is something to be said for getting away from the screens and reading a book. (Just ordered Andrew Ross Sorkin’s 1929, for example.) Another colleague of mine, Tony Isola recently highlighted the fact that students today have a hard time reading even extended passages from books. Isola writes:
Deep reading compounds, scrolling distracts and sensationalizes. Literate investors read history- not just headlines. Literate investors not only own assets, but they also understand them.
All of this is a windup for a pitch for a new piece that is online, yes, but distills the wisdom found in some of the best books on personal finance and investing. This will help you ‘understand your own assets.’ Jerry Bell, Victor Haghani and James White, the latter two also co-authored the book The Missing Billionaires: A Guide to Better Financial Decisions, recently published on Elm Wealth the Essential Wisdom from Twenty Personal Investing Classics.
The title is largely self-explanatory. The authors comb through 20 investing books, from the basic to more complex, to highlight important personal finance lessons. You aren’t going to find stuff on alpha generation. It’s more about the basic blocking and tackling of a drama-free financial life. Going section by section they examine:*
- The importance of costs in investing.
- Asset allocation and portfolio construction.
- Behavioral finance and investor psychology.
- Taxes and compounding.
- Automating good behavior.
- Advanced topics.
- Common mistakes and how to avoid them.
- Special topics including estate planning and insurance.
- The philosophy of wealth.
The authors pull it all together with practical recommendations on how to implement this consensus wisdom. They conclude with the admonition that personal finance is simple but not easy. We all live in an our environment that works against good financial decision making and patience. They write:
If you follow the consensus ideas from these books, you will achieve the best financial future you could reasonably have hoped for. Over 30+ years, you’ll likely do better than 99% of people who don’t follow these prescriptions. You’ll do that not through higher headline investment returns, but rather through superior risk-adjusted, net of fee, after-tax returns, and through smart and sensible decisions on all the other related personal financial decisions you’ll face.
Economists love to say there is no such thing as a free lunch. This resource if free and available to novice investors, grizzled veterans and everyone in between. You may also discover some new books you may have missed along the way.
*The estimated reading time is 16 minutes.
