Pre-Retirement Reading: Three Great Books About Investing
In honor of National Save for Retirement Week, I wanted to take a minute to point out some excellent books about investing. Truth be told, I thoroughly enjoy reading about money and finance, but I’m a bit of a freak when it comes to these things.
With that in mind, here are three great books that would make an excellent “short course” in investing for the future:
The Bogleheads’ Guide to Investing
Written by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf, this is an excellent introduction to investing which is broken in two main parts. Chapters 1-16 comprise Part I (Essentials of Successful Investing), which covers topics such as:
» Leading a sound financial lifestyle
» The importance of starting early and investing regularly
» The ins and outs of stock, bonds, ETFs, mutual funds, etc.
» Protecting yourself against inflation
» Asset allocation (in simple terms)
» How to invest for college
» How to manage a windfall
» Whether or not you need a financial planner
Chapters 17-23 comprise Part II (Follow-Through Strategies to Keep You on Target), which covers topics such as:
» Tracking your progress and rebalancing
» Mastering your emotions and ignoring the “noise”
» Making you money last longer than you do
» Protecting your assets with insurance
» Estate planning
All in all, this is a very well-rounded book on investing.
The Four Pillars of Investing
Written by William Bernstein, this book turns things up a notch when it comes to educating you about investing. The content is broken into five sections, including:
» Pillar One: The Theory of Investing (Chapters 1-4)
» Pillar Two: The History of Investing (Chapters 5-6)
» Pillar Three: The Psychology of Investing (Chapters 7-8)
» Pillar Four: The Business of Investing (Chapters 9-11)
» Investment Strategy: Assembling the Four Pillars (Chapters 12-15)
For those that aren’t familiar with him, Bernstein is an excellent writer who manages to make otherwise dry topics quite interesting.
The Intelligent Asset Allocator
This is another book by William Bernstein. What can I say? I’m a fan. In truth, “Bogleheads” and “Four Pillars” will provide you with rather thorough coverage of investment-related topics, and might be plenty for the average investor. If you’ve read both of them and are looking for more, then…
“The Intelligent Asset Allocator” isn’t a light read, but Bernstein once again keeps things interesting. This book drills down into portfolio theory, tackling such issues as risk vs. return, asset class correlations, how to properly construct an investment portfolio, how to implement and maintain your plan, etc.
Other options
There are, of course, many other excellent books about finance and investing out there. For example, if you’re more interested in the psychological side of the equation, and getting your head straight when it comes to longer term goals, you might be interested in “Your Money or Your Life.”
Another books that looks promising is “The Bogleheads’ Guide to Retirement Planning.” I haven’t read it (yet), but the reviews are excellent, and it appears to delve into a number of retirement-specific topics.
Finally, I’d be remiss if I didn’t point out Bernstein’s latest book, “The Investor’s Manifesto.” While this books isn’t due out until November 2009, you can pre-order it through Amazon. You can also check out the first couple of chapters for free via Bernstein’s website.
What are your favorite books about finance/investing?
Filed under: Retirement, Saving & Investing
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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October 20th, 2009 at 1:15 pm
In addition to those you mentioned, my favorites are: Malkiel’s Random Walk Down Wall Street, Taleb’s Fooled by Randomness (while it isn’t about investing as such, it sure does apply to investing), Bogle’s The Little Book of Common Sense Investing, and Allan Roth’s How a Second Grader Beats Wall Street.
What can I say? I’m a believer in index funds.
October 20th, 2009 at 1:22 pm
My favorites are Reminiscences of a Stock Operator by Edwin Lefevre, One up on Wall Street by Peter Lynch, and the Ivy Portfolio by Mebane Faber.
That Guide to Investing you mentioned does seem like the best all-scenario book to buy if you are new to investing and had to buy just one.
October 20th, 2009 at 4:00 pm
My personal favorite investing book is The Intelligent Investor by Benjamin Graham. Graham was the mentor of Warren Buffet. This book is the Bible for Value Investors.
October 20th, 2009 at 4:38 pm
You have to keep reading everything you can if you want to make out financially.
Thanks for the three reviews!
October 20th, 2009 at 5:20 pm
Read all three of these, but I have to say that “The Four Pillars” was the best information if you are looking at a “bang for the buck” or value ratio.
October 21st, 2009 at 1:20 am
I love the Boglehead. A good gift I got.
October 21st, 2009 at 8:54 am
Two thumbs up for Your Money or Your Life. Just finished reading and reviewing it and I loved it.
October 21st, 2009 at 9:00 am
have any “pundits” commented on lending clubs as part of an investment strategy?
October 21st, 2009 at 11:58 am
All of the above are great money books. But if you only read one money book in your entire life, it better be “The Four Pillars.” William Bernstein lays out investment knowledge in a way us liberal arts majors can grasp and his wit is just an extra treat! (“Brokers service their clients like Bonnie and Clyde serviced banks.” LOL! Priceless!) I’m looking forward to his new book too!