Reading is one of the best ways to become a better investor. While many people assume it’s important to be well-read on current news and economic trends, a better use of your time is to read books that deepen your understanding of markets and give you the proper context to understand and interpret things you read or hear.
But where should you start? Below is a list of 22 books that combine centuries’ worth of experience and knowledge on financial markets, economics, investing, and human behavior.
And if you want to find a way to read more in general, here is a list of ideas to help.
Investing for Beginners
When you are just getting started in your financial reading, it’s important not to jump in too deep. If you’ve never read an investing or personal finance book, these titles are a great place to start to ensure you build a solid foundation of knowledge in the topic.
The Elements of Investing by Burton Malkiel and Charles Ellis
These authors each penned one of “The Classics” below, but here they join forces to provide one of my favorite short reads on investing and saving. The Elements of Investing is perfect for readers of all ages and experience levels.
The Little Book of Common Sense Investing by John Bogle
Jack Bogle, the father of the index fund, helped revolutionize investing. Bogle has written many books, but this relatively short one contains a lifetime of wisdom and is easy to work through quickly.
Making Money Simple by Peter Lazaroff
Maybe it’s not cool to sneak my own book in here, but it was written to be someone’s first or second investing or personal finance book. By explaining the systems I use myself and with my clients, this book gives you everything you need to turn career success into financial success.
Investing Beyond the Basics
Psychology of Money by Morgan Housel
While most finance books focus on the technical or mathematics behind investing, Morgan Housel uses a series of short stories that highlight the soft skills that are arguably more important to achieving financial success. It’s a fun and practical read that investors of all skill levels can benefit from.
A Wealth of Common Sense by Ben Carlson
The first book from prolific blogger Ben Carlson focuses on a few big topics that matter most to investors. This simplifies these often complex concepts down to their essential wisdom. Written in plain English, Ben’s approach lays out the most essential investing concepts in an approachable way, while also taking you a little beyond the basics.
A Random Walk Down Wall Street by Burton Malkiel
A must-own for serious investors, Burton Malkiel’s classic on investing well explains the difficulty of predicting stock prices and why you shouldn’t do it. He also focuses on what you should do instead, including various aspects of investing at different stages of life.
Winning the Loser’s Game by Charles Ellis
This book is a classic and should be required reading for all investors who want to manage their own portfolios. With markets seemingly getting more unpredictable by the day, this book helps you avoid common traps while increasing your probability for success.
The Incredible Shrinking Alpha by Larry Swedroe and Andrew Berkin
This book clearly and succinctly describes why the pursuit of market-beating returns is unlikely to help you achieve your goals. This book is a bit more technical than others in this section, but anyone that naturally enjoys the nuts and bolts of investing will find this to be highly informative.
Advanced Investing Concepts
Thinking, Fast and Slow by Daniel Kahneman
Daniel Kahneman won the 2002 Nobel Prize in Economic Sciences for his work in behavioral finance. There are countless lessons throughout the book that are applicable to investing, but Kahneman’s work goes far beyond how what we think about markets can trip us up when investing. This book will also transform the way you think about choices we make in business and our personal lives.
This book is a slam dunk for a sports fan, but also extremely useful to all investors. In it, Mauboussin explains how we quickly attribute our successes to skill, but luck plays a far greater role than most people realize. The Success Equation provides a framework for identifying skill versus luck, and makes concrete suggestions for using this knowledge to your advantage.
Against the Gods: The Remarkable Story of Risk by Peter Bernstein
Peter Bernstein explores the history of money through the lens of financial risk, beginning in ancient times and into the modern world of portfolio theory. Bernstein does an excellent job explaining the underlying mathematics in simple terms, making this book very informative and relevant to practitioners.
Fooled By Randomness by Nassim Taleb
Serious investors will find Nassim Taleb’s stories to be highly insightful. Using a combination of his own experiences as well as stories of others’ successes and failures, Taleb helps us better understand the role of chance in the world around us.
The Most Important Thing Illuminated by Howard Marks
Howard Marks has been writing memos for nearly three decades on the nuances of investing, and this book combines the best of those essays into a cohesive overview of his thoughts on risk, return, and process.
While I generally enjoy books that simplify investing, Marks wants to make it perfectly clear how complex investing can be. This is a very thought-provoking book for a more seasoned investment reader, and the latest version also features insightful annotations from well-known investors sprinkled throughout. These notes further enhance the depth and dimensions of Marks’ ideas.
Investment Books That Will Make You Laugh
The Devil’s Financial Dictionary by Jason Zweig
Jason Zweig, known by most for his columns in The Wall Street Journal, is one of the best writers around. This book is both funny and easy read, while also being relevant for anyone that has been exposed to the investment industry as an employee or customer.
Where Are the Customers’ Yachts? by Fred Schwed
The title of this humorous read is based on the story of a man admiring the yachts of New York bankers and brokers, but then he wonders: where are the customers’ yachts? This book was written in the 1940s, but the truths it portrays about the business of Wall Street still resonate today.
Non-Investing Books That Can Make You A Better Investor
Thinking In Bets by Annie Duke
Written by a former World Series of Poker champion, this book focuses on improving your decision-making by recognizing the difference between the quality of our decisions and luck. Most people wrongly evaluate investment decisions based on their outcome. Thinking in Bets introduces a better framework for probabilistic thinking and making better decisions in a way that differs from a traditional finance book, but is highly applicable to investing.
How to Lie With Statistics by Darrell Huff
If you aren’t well-versed in statistics yet, this might be one of the most important books on this list to read. There is no better resource for understanding how statistics are misused (intentionally and unintentionally) by media, politicians, advertisers, and more. Through a variety of cases, Darrell Huff equips readers with the necessary knowledge to identify the statistical sleight of hand so many people in our daily lives use.
Most financial success comes down to make good decisions over and over for decades. The easiest way to do that is building good habits, and there is no better operating manual for habit building than Atomic Habits.
Unlike many habit books that focus solely on the science of habits, this book is highly actionable and offers an approach for improvement, whether your goal is financial success, good health, better relationships, or higher productivity.
Personal Finance Books
30-Minute Money Solutions by Christine Benz
This is the first personal finance book that I purchased out of college that made a lasting impact on me. It covers a litany of areas of your financial life that you can tidy up and improve in 30 minutes or less, making it easy to get in action. Each chapter is short and straightforward, with highly actionable suggestions and worksheets to help you get things done.
I Will Teach You To Be Rich by Rami Sethi
Aimed at people in their 20’s and 30’s, Ramit Sethi’s style makes it feel like you are talking to a good friend over drinks. The idea of creating a system that manages your money with a minimal amount of ongoing effort made intuitive sense to me, but I also appreciate Mr. Sethi’s focus on defining what being “rich” means to you.
Happy Money: The Science of Happier Spending by Elizabeth Dunn and Michael Norton
An understanding of what type of spending is likely to derive the greatest amount of happiness is hugely important when developing a personal financial plan. While most personal finance books tend to focus more on how to save and invest your money, this one helps teach you the best way to spend your money. If you are making a big effort to optimally save your money, then you ought to make a similar effort to get the biggest bang for your buck when spending it.
The Richest Man in Babylon by George S. Clason
If you learn best from stories, this book is for you. This classic draws on parables from ancient Babylon and exemplifies the idea that good money advice is timeless. Originally published as a series of pamphlets, each story has one or two concrete points explaining how to get ahead financially. These rules for conquering money are easy to understand and applicable to anyone.
The list here is far from comprehensive. The titles I’ve listed simply are those that I’ve purchased or recommended to others most often.
The thing about investing and personal finance books is that there is a certain point where the marginal benefit of reading another book on the subject begins to decrease. It’s likely that reading every book on this list would breach that point, but even still there are another half dozen books on these topics that I love that I haven’t included here today – most notably, a number of my favorite behavioral finance books.
Once you’ve reached a point of decreasing marginal returns on finance books, you can further improve your investment views by widening your perspective. That can mean reading on a wider range of topics such as history, biology, business, and so on.
Broadening your reach into various genres allows you to make interdisciplinary connections that further enhance your understanding of the forces that drive markets and how to best achieve investment success.
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