Illustration of a typewriter for an article about investing books

Experience is a great teacher for investors, but it can also be a very expensive way to learn. Rather than learning by trial and error, reading up on basic investment topics is a more cost-effective way to start, because it allows you to benefit from the experience of others. The following are six of the best investing books for beginners that can help you make an informed start:

1. One Year to an Organized Financial Life: From Your Bills to Your Bank Account, Your Home to Your Retirement, the Week-by-Week Guide to Achieving Financial Peace of Mind

Author: Regina Leeds
Publisher: Da Capo Lifelong Books

What it is: This is a step-by-step guide to organizing finances structured as a trip through one calendar year with specific tasks for each month. The process is designed to help the reader progress from short-term tasks like dealing with current bills to longer-term planning like retirement saving and establishing a sustainable financial discipline.

Why this is useful: You have to walk before you can run, and this book’s step-by-step approach could help you start to put one foot in front of the other at the beginning of a financial journey. Managing finances can seem like impossibly complex, so breaking it down into individual components set out over a calendar schedule helps a person get started on specific, manageable tasks rather than getting intimidated by the bigger picture.

2. The Intelligent Investor: The Definitive Book on Value Investing

Authors: Benjamin Graham and Jason Zweig
Publisher: Collins Business Essentials

What it is: This is an updating of a classic book by Graham, who is considered a father of value investing. As a nice bonus, this version also includes a preface and appendix by Warren Buffett.

Why this is useful: Value investing can help an investor cut through much of the hype associated with the financial markets and look at individual companies based on their merits as ongoing businesses. It allows for a fundamental assessment of the future earnings potential of a company and a comparison of that potential with the current market price.

3. Financial Literacy for Millennials: A Practical Guide to Managing Your Financial Life for Teens, College Students, and Young Adults

Author: Andrew O. Smith
Publisher: Praeger

What it is: This book is guide to a variety of real-world financial essentials, written with a focus on the generation that is just now coming of age and having to deal with money decisions for the first time. It covers basics such as the characteristics of different types of bank accounts as well as the nature of stock, bond, and commodity investments. It weaves those investment topics into a broader discussion of financial literacy including budgeting and managing credit.

Why this is useful: Millennials are entering the job market with an unprecedented amount of student loan debt. They cannot afford to compound that by making some of the financial mistakes that young adults often make when first starting out. This book is comprehensive enough to empower a new wage earner to start to feel in control of personal finances.

4. Winning the Loser’s Game: Timeless Strategies for Successful Investing

Author: Charles D. Ellis
Publisher: McGraw-Hill Education

What it is: This is widely regarded as a classic, by one of the most respected figures in the investment industry. Ellis gives newcomers an insider’s view of the financial markets in the hopes they can avoid some of the pitfalls that await the typical investor.

Why this is useful: Any new investor needs to understand that to a large extent, the financial industry is set up to make money at their expense. As much as anything else, making money in the markets is about avoiding costly mistakes such as paying excessive fees or falling victim to damaging investor psychology. This book arms investors with the knowledge they need to be prepared for those potential traps.

5. The Wall Street Journal Complete Money & Investing Guidebook

Author: Dave Kansas
Publisher: Three Rivers Press

What it is: This can serve as a detailed primer to the concepts and jargon around which the financial markets operate. This book seeks to serve as a user’s guide to investments by demystifying some of the complexity which often scares off would-be investors.

Why this is useful: It is instructive to have an introductory “how-to” guide to various asset classes and broader concepts such as economics and retirement saving. Even more so, this type of book can serve as a handy reference that investors can tap into when specific subjects come up in their lives.

6. Capitalism (Political and Economic Systems)

Author: Various
Publisher:
Rosen Education Service

What it is: This is a wide-ranging overview of the history and key theories of capitalism, with a focus on the underlying forces that impact economic growth and financial markets today.

Why this is useful: History never repeats itself in exactly the same way, so understanding the reasons behind economic developments can help you interpret how new and different developments might impact your job situation and retirement savings.

All of the titles listed above are available on Amazon.com, and in many cases from other major booksellers as well.

Investing is a life-long learning process. Reading some or all of the books described above could help you get that process off to a strong start.

Related >> Book Review: The Money Book for the Young Fabulous and Broke

About the author

Richard Barrington is a personal finance expert, a Certified Financial Advisor and a 20-year veteran of the financial industry. He has written extensively on investment topics, including investments, money market accounts, certificates of deposit, and personal finance as it relates to retirement and has been quoted by numerous top media publications.

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