3 Financial Books that made me a better Investor
While Warren Buffet spends 80% of his time reading, I haven’t come across a good investor who doesn’t read. Everyone invests time in reading to become a better investor and make an informed decision. And so, books have a huge impact on my journey as an investor. I may not be a pro or an established investor. But I am also not someone who blindly follows the advice given out by many experts on TV channels, YouTube etc. Over the course of last 7 years, I have read some good books that have helped me to learn about stock markets, what good businesses look like and to think like a wealth creator and investor.
Here’s my top 3 books on investments and wealth creation:
One up on Wall Street by Peter Lynch
This book helped me carve out my investment strategy for my personal portfolio. The book covers three key main points: 1) how to find good investing opportunities- they are present everywhere, 2) always buy what you know and understand, and 3) hold for the long term to see the magic of compounding. The author Peter Lynch shares his own personal experience, starting his career as an intern at Fidelity Investments to growing a small mutual fund called the Magellan Fund from $18 million to $14 billion over the period of 23 years. In this book, he reveals some of the best-kept secrets straight from experienced investors on Wall Street. He details how to research and find stocks that may be likely to perform and appreciate tenfold into a top performer.
I would recommend ‘One Up On Wall Street’ is a must for anyone thinking of getting started in buying stocks.
Psychology of Money by Morgan Housel
I found this book to be one of the easiest and most-relatable books on wealth management. The narrative is so simple, easy to understand and comprehend. Housel has covered 20 lessons on wealth management in this book. The key message is that doing well with money has less to do with the smartness of the person and lot to do with the behavior. He has cited examples from his own life and other relevant real-life experiences which makes it a compelling and insightful. Housel has also added a postscript titled “A Brief history of why U.S. Consumers think the way they do”. This section is interesting to understand the current state of consumers in US market.
I would recommend this book to anyone who doesn’t have the appetite to go through thick detailed books on psychology yet wants to learn about behavior and money decisions. It will help you to make your own mental approach for money.
The Essays of Warren Buffet by Lawrence Cunningham
It would be unfair if I don’t quote Warren Buffet — the Investment Guru! I didn’t even know the names of Warren Buffet and Charlie Munger till I met few crazy friends in MBA. The first thing they asked me to read were the annual shareholder letters by these two wise people in the world.
The book is a collection of excerpts from selected letters from Warren Buffet (and on occasion Charlie Munger) to their shareholders at Berkshire which is one of the most valuable US corporations. Even though the letters are available on internet, if you don’t have the appetite for those, Lawrence Cunningham has made task easy for you — complied a valuable and most meaningful selection in this book. The book is well structured and organized which gives you an impressive walk through on different elements of investment strategy and running a business. The book also covers what good business is all about covering corporate governance, value proposition and moral integrity which makes sense in the current times. I wouldn’t shy away in admitting that reading this book requires basic understanding of economics and investing in general to understand the jargon used. Hence, it may resonate well with an experienced investor than a newbie.
Other favorites
If you are wondering why the bible of investing — The Intelligent Investor is missing from the list. Because, I haven’t read it yet. Yes, I haven’t read. But I have read, listened and watched the summary of the book on different platforms by different content creators for more than 15 times. And I sincerely hope I’ll read it someday.
And if you are someone new to investing or to the concepts of compounding or just wondering why you should invest for wealth creation, I would recommend you to read Rich Dad Poor Dad. It’s a classic book that will introduce you to the power of compounding and is one of my all time favorites.
Conclusion
The books that I have listed above have helped me to understand three aspects in investing and wealth creation —
1) power of compounding,
2) how to identify good investment opportunities in market and make informed decision and ;
3) train my mind to avoid herd’s mentality and manage my wealth well.
As always, I would love to know which books had an impact on you as an investor and made you a better valued investor. Please share your thoughts in the comment section.
