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Financial literacy is uncommon even in one of the richest countries in the world, considering that only 35% of American families have investments other than 401(k)—according to a 2019 survey by Pew Research Center. Most aspiring investors, who weren’t taught about money management within the household, are left with self-education through books authored by successful investors. With a lot of resources available, you can narrow down your options by starting with these 5 must-read books for investors of all ages.
Just the Nuggets
- Rich Dad’s The CASHFLOW Quadrant by Robert Kiyosaki teaches the four types of income earnersーEmployee, Self-Employed, Businessman, and Investor. The secret to attaining financial freedom lies in becoming a businessman or an investor, but the shift from one quadrant to another also requires a shift in beliefs.
- Money Master the Game: 7 Simple Steps to Financial Freedom by Tony Robbins teaches 7 steps that will fulfill your underlying need for money and give you freedom from the life of living paycheck-to-paycheck. With a look at famous investors’ insights through interviews, you will learn how each of them found their way to freedom.
- The Little Book of Common Sense Investing by John Bogle teaches you the simplest way to invest in the stock marketーthrough low-cost index funds.
- Invested by Danielle Town and Phil Town provides a perspective of a reluctant, headstrong learner with the help of her mentor dad. Follow the investing practice of the author as she learns the proper way of investing month after month in a span of one year.
- The Intelligent Investor by Benjamin Graham is referred to as the unofficial bible of investing. First published in 1949, the founding principles of value investing are still applied by successful investors like Warren Buffett.
The best investing books featured in this article are authored by successful investors who teach from experience. Not only are these authors credible, but these books are also well-loved by readers who gave approximately 4- to 5-star ratings on Goodreads.com. The key takeaways of each book will be discussed briefly to give you a glimpse of what you’ll be learning ahead. Each book can be read by any aspiring investor of any age with little to no knowledge and experience.
1. Rich Dad’s The CASHFLOW Quadrant: Guide to Financial Freedom by Robert Kiyosaki
Goodreads Rating: 4.13 out of 5
If you search for the best investing books, one of the top picks is the #1 Personal Finance Book of All Time, Rich Dad, Poor Dad. Although this book is a great eye-opener to building wealth, it doesn’t focus on investing per se because you’ll go deeper into that in Rich Dad, Poor Dad’s sequel—Rich Dad’s The CASHFLOW Quadrant. This is symbolized by the E, S, B, and I letters arranged in a quadrant as shown on the book cover.
The book focuses on different kinds of people based on how they earn income and how they could find their way to financial freedom. According to Kiyosaki, there are four types of income earners:
- (E) Employee – people who have a job and work for money
- (S) Self-Employed – people who own their job and are their own boss
- (B) Businessman – people who own a system and have other people work for them
- (I) Investor – people who put money in a system so money could work for them
These types of income earners are arranged distinctly in a quadrant. The left-side quadrant—E & S—is where financial security lies. Meanwhile, the right-side quadrant—B & I—is where financial freedom lies. To be financially free, you must cross from the left side to the right side of the quadrant. Doing this does not happen by command. As quoted in the book, “The CASHFLOW Quadrant is about BEING, not DOING.”
After understanding how every quadrant behaves and how cash flows, the last part of the book focuses on how to become a successful businessman or investor through step-by-step actionable items to jumpstart your transition.
Perhaps, you’re working on a 9-5 job right now and you’re searching for the best books on investing to shift from an Employee to an Investor. So this book is definitely worth the read! Here are two stellar reviews on Rich Dad’s The CASHFLOW Quadrant.
You can buy the paperback at Barnes & Noble for a base price of $17.95. You can also buy the paperback on Amazon for $12.14 and a Kindle edition for $12.82. If you prefer a much cheaper alternative, you can also buy the audiobook at Amazon for a base price of $9.99.
About the author:
Robert Kiyosaki is best known for authoring the #1 Personal Finance Book of All Time, Rich Dad, Poor Dad, which created a radical way of thinking about personal finance. According to Kiyosaki, most of the people are poor because traditional schools have been cultivating a culture of working hard rather than the business’ way of working smart. Today, he and his wife own Cashflow Technologies Inc., a financial education company. Aside from being a successful real estate investor and owning a gold mining company in China, his early success and profits came from being a motivational speaker. Some of the shows he appeared in were The Oprah Winfrey Show, The Alex Jones Show, and Larry King Live.
Kiyosaki, R. T., & Lechter, S. L. (1999). The Cashflow Quadrant: Rich Dad’s Guide to Financial Freedom. Warner Books ed. New York, NY: Warner Books.
2. Money Master The Game: 7 Simple Steps to Financial Freedom by Tony Robbins
Goodreads Rating: 3.99 out of 5
“What matters is that you master money and it doesn’t master you. Then you are free to live life on your own terms.”
Different kinds of people have different opinions about money. Nevertheless, whatever that emotion associated with money is, there must be an underlying need for it. In the first part of Money Master The Game: 7 Simple Steps to Financial Freedom, you’ll get to introspect on what need money fulfills for you. Is it security, comfort, significance, power, love, growth, or the sense of contribution?
But the main takeaway of this 688-page book is the 7 steps to financial freedom with insights from credible investors like John C. Bogle of The Vanguard, Warren Buffett of Berkshire Hathaway, Mary Callahan Erdoes of JPMorgan Chase, and many more!
To give you the main gist, these are the 7 steps to financial freedom:
- Take control of your money
- Know the rules before you invest
- Set your goals
- Asset allocation and risk management
- Create your lifetime income plan
- Learn from the experts
- Just do it, enjoy it, and share it!
The book talks lengthily about each step to help beginners prepare for what is out there in the world of investing. Most of all, you should not miss the interviews Tony Robbins has done with some famous investors. To be successful in investing, you should learn from people who have made it through to success.
See what others have to say about Money Master The Game as one of the best investing books for all ages. Here are two stellar reviews from Goodreads.
You can buy the paperback at Barnes & Noble for a base price of $21. There are also cheaper options on Amazon where you can buy the hardcover for $10.03 or the Kindle edition for $9.79. You can also listen to Audiobooks.com with a 30-day free trial or for free if you already have an account. The audio file runs for about 7.5 hours.
About the author:
Anthony “Tony” Robbins is an entrepreneur, businessman, philanthropist, personal development coach, and a New-York Times best-selling author of six books including Unlimited Power and Awaken The Giant Within. Among his many achievements, he has been honored by American Express as one of the Top 6 Business Leaders in the World. Aside from being the Chairman of five private companies and Vice Chairman of one company that overall brings him a revenue of half a billion dollars per year, his main facet is holding seminars as a life coach. In 2016, a Netflix documentary film entitled Tony Robbins: I Am Not Your Guru features behind the scenes of his live seminars. He has been recognized as a world authority on leadership psychology.
Robbins, A. (2014). MONEY Master the Game: 7 Simple Steps to Financial Freedom. Simon and Schuster. New York, NY.
3. The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John Bogle
Goodreads rating: 4.19 out of 5
The term common sense investing is quite an eye-catching title, but what this book tells you is how to simplify investing in stocks especially for beginners. For John “Jack” Bogle, that simplified way is through the index funds: “The winning formula for success in investing is owning the entire stock market through an index fund, and then doing nothing. Just stay the course.”
If you’re a beginner out there who’s mulling which stock investment is the best for you, then you might want to consider reading this book. It’ll be helpful if you already have some background knowledge about the difference between index funds and mutual funds. If at this point you’re still deciding which way to invest is better and leaning more into mutual funds, wait just yet. It’s best to be enlightened with the details that some professional experts do not specifically tell you. However, the objective is not to discourage you from investing in mutual funds but to show you the whole picture.
Bogle pioneered the world’s first index fund in 1976 called The Vanguard 500. Investors who put money here are investing in the S&P 500—a list that includes the 500 leading companies making up approximately 80% of the USA’s available market cap. According to Bloomberg, this index is the best single gauge of large-cap companies in the US which also serves as the foundation for a wide range of investment products. This is Bogle’s solution to investing without personally handpicking your stocks while, at the same time, managing the risks of losing money by owning diversified stocks through the index. Also, he has created a no-commission index fund to counter the disadvantages of high costs in mutual funds. So one might understand why this book is highlighting the best aspects of investing in index funds.
If you’re still skeptical about trying out this book, here are Goodreads reviews that may convince you that this is one of the best books on investing.
Ready to get yourself a copy now? Grab a hardcover at Barnes & Noble for $22.49. They also have an audio CD for $24.95. If you prefer cheaper but brand new hardcovers, you can shop at Amazon for as low as $16.45 and a Kindle copy for $13.
About the author:
John C. Bogle is best known as the founder of The Vanguard 500, which handles approximately $5 trillion assets. Even though Vanguard was a mutual fund company beforehand, Bogle was also one of the industry’s harshest critics. That’s why he was fueled to bring index funds to the individual investor. He is an icon in the world of investing as 1999 Fortune magazine included him in the Giants of the 20th Century, 2004 Time magazine cited him in the list of 100 Most Influential People, and Institutional Investor honored him with a lifetime achievement award. He recently died in 2019 at the age of 89 due to esophageal cancer. Nevertheless, his 12 books including The Little Book of Common Sense Investing will continue to impart knowledge to every learning investor.
Bogle, J. C. (2017). The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns. 10th Ed. John Wiley & Sons Inc. New York, NY.
4. Invested by Danielle Town & Phil Town
Goodreads rating: 4.13 out of 5
“I will show you right off the bat that having someone else manage your money will not get you to financial freedom. I will prove it to you. And once I do that, I will teach you how to invest over the rest of this year.”
This is what Phil Town, a New York Times best-selling author of Rule # 1 and Payback Time, told his daughter, Danielle Town. Danielle loved being a lawyer but she got sick of working for a living. She realized that what she wanted was financial freedom to get to do what she loves without worrying about her finances. So even though she strongly disliked the stock market and the math that comes with investing, she finally asked help from her dad who was living a financially-free life as a successful investor.
For 12 months, Danielle unlearned what she initially thought of stock investing (which wasn’t much) and was mentored by her dad for a year-long journey. Each month is a learning experience that slowly conditions your system into seamlessly adapting the discipline of investing in your everyday life.
Here’s a glimpse into Danielle Town’s investing practice:
- January – Becoming brave
- February – Knowing your number
- March – Voting for a mission with my money
- April – First principle of value investing
- May – Charlie’s Moat and Management
- June – Circling competence
- July – Pricing
- August – Value
- September – Inverting the story
- October – Compiling an anti-fragile portfolio
- November – When to sell
- December – Living thankfulness
Too many investing books out there are written by credible investors who tell you the dos and don’ts in stock market investing. What makes this book different is, the perspective is written by a reluctant, headstrong, full-fledged beginner in investing. In a way, this book serves as a mentor who’ll guide a beginner by borrowing other’s experiences. That’s why it’s one of the best investing books for all ages (especially women) as can be proven by Goodreads reviews like these:
Start your 12-month journey to financial freedom by grabbing a hardcover at Barnes & Noble for $24.99. You can also get a brand new hardcover on Amazon for as low as $14.15 and a Kindle copy for $6.99. If you have an Audible account, you can listen to the audiobook which runs for 10 hours and 19 minutes.
About the author:
Danielle Town is best known for being a mentee of her father, Phil Town. She started a podcast in 2015 entitled InvestED: The Rule # 1 Investing Podcast, which she co-hosts with her dad. In 2018, she has written compiled accounts of her learning experience in investing with the help of her dad using Warren Buffett and Charlie Munger’s stock investing techniques into a best-selling book. She is a former lawyer but has now ventured into investing. Apart from the podcast, she also has The Invested Practice which is a biweekly newsletter that lets you continually practice investing and making it a part of your lifestyle.
Town, D. & Town, P. (2018). Invested. HarperCollins Publishers Inc. New York, NY.
5. The Intelligent Investor by Benjamin Graham
Goodreads rating: 4.23 out of 5
If there’s only one book on investing that you should read, it could only be The Intelligent Investor written by the Father of Value Investing himself. Although Benjamin Graham first published this book in 1949, some data may be already outdated but all of the fundamental principles in value investing are archived in one place. In fact, Warren Buffett, who was also Graham’s student, employee, and friend, vetoes this platinum-old book as “by far the best book on investing ever written”.
As mentioned in the 2006 revised edition with chapter commentaries by Jason Zweig, this book will impart three powerful lessons:
- how you can minimize the odds of suffering irreversible losses
- how you can maximize the chances of achieving sustainable goals
- how you can control the self-defeating behavior that keeps most investors from reaching their full potential
Within the 587 pages of the book, you’ll learn investing techniques applied to this day by value investors. If you compress the main takeaways into three points, these would be:
1. Understanding Mr. Market
To better understand how the stock market works, Graham used a metaphorical Mr. Market as a parable. Mr. Market is one of your business partners who has a bipolar personality. Now and then, he comes to you to report every price movement and to offer advice on what to do. Sometimes, pieces of advice are backed by logical facts, but most of the time, Mr. Market is easily swayed by emotions. As an intelligent investor, you won’t ignore Mr. Market but you certainly don’t have to act on his every advice. Rather than be his servant, an intelligent investor must think for himself. “Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
2. Decide what kind of investor you are
There are two types of investors: the active investor (continuously researches and manages their investments) and the passive investor (has an autopilot portfolio of investments). Choosing which kind of investor you’ll be will depend on your personality. However, to be successful in either approach, an intelligent investor will invest in low-cost index funds (passive) or use value investing principles to research stock companies (active).
3. Research before investing and recognize the red flags
The bulk of the book focuses on fundamental analysis. You’ll learn how to go over the process of picking undervalued stocks and knowing all of the red flags to look out for. Reading the last few sections of the book could understandably overwhelm a neophyte. It would be wise to go over beginner stock-investing courses first to be fairly familiar with investment terminologies.
The Intelligent Investor remains to be on top of the recommended list despite being not so enjoyable to read and also not being the ideal book for aspiring investors with zero experience. Most readers even refer to it as the unofficial bible of investing.
You can get a paperback copy on Barnes & Noble for $24.99 or on Amazon for as low as $14.25. The Kindle edition costs $9.49, but if you have an Audible account, you can listen to the audiobook for free which runs for 17 hours and 48 minutes.
About the author:
Benjamin Graham is best known for his authored books, Security Analysis and The Intelligent Investor, which earned him the title of Father of Value Investing. Apart from being an author, Graham co-founded his firm called Graham-Newman after quitting from a Wall Street brokerage firm. At night, he taught finance classes at Columbia University where the famous Warren Buffett became his student. Graham’s best contribution to the world of investing was being a great educator who laid out the core foundation in successful investing.
Graham, B., & Zweig, J. (2005) The Intelligent Investor: A Book of Practical Counsel. 6th Ed. Collins Business Essentials. New York, NY.
Our References and Further Readings
Ruth Igielnik & Kim Parker. (2019). Most Americans Say the Current Economy is Helping the Rich, Hurting the Poor and Middle Class. Retrieved on 2020-11-05.
Ruth Igielnik. (2020). Few in US Owned Stocks Outside of 401(k)s in 2019, Fewer Said Market Had a Big Impact on Their View of Economy. Retrieved on 2020-11-05.
Editors, TheFamousPeople.com. (n.d). Robert Kiyosaki Biography. Retrieved on 2020-11-05.
Editors, FamousEconomists.net. (2020). Benjamin Graham. Retrieved on 2020-11-05.
Robbins Research International Inc. (2020). About Tony Robbins. Retrieved on 2020-11-03.
Bloomberg. (2020). S&P 500 Index. Retrieved on 2020-11-03.
The Vanguard Group Inc. (2020). Who We Are: John C. Bogle. Retrieved on 2020-11-03.
Edward Wyatt. (2019). John C. Bogle, Founder of Financial Giant Vanguard, Is Dead at 89. Retrieved on 2020-11-03.