My Favorite Investing Books

A while back, I got an e-mail asking me what my favorite books for investors and real estate folks were.



My response?

Unless you're going to practice professionally and undertake the study necessary to do a good job of it, personal financial advice books are largely a waste of money. The only reason I read them is to find out what the latest rationalizations are for avoiding professionals.



Every personal finance book I've ever read has an agenda of selling more (and future) books that conflicts with the ostensible purpose of making the reader as wealthy as possible. The one book in this category I've seen where this was outweighed by the good advice is Rich Dad, Poor Dad - which I suspect is already on your list. In fact, the best method of long term success is finding a good professional and making a long term individual plan, and the money you pay that professional is likely to be the best investment you'll ever make.



This is why the approach I take on my site is often weighted towards mathematical models, to debunk the nonsense and hype. My recommendations for reading would tend be in the way of college texts and similar things.



Any comprehensive logic text. Make valid arguments a habit. Spot bad links in an an argument.



A beginning psychology text is critical. Learn the importance of psychology in personal finance and get to the point where you always challenge your conclusions.



Double entry Accounting and tax texts. You cannot play the game well if you do not understand the system for keeping score.



One each freshman (college) calculus, physics, and chemistry books, that teach how to handle numbers and approaches that handle the entire system, with plusses, minuses, and second and third order effects. Learn that optimizing individual terms of an formula does not necessarily optimize the entire formula, and the more complex the system, the more likely this is to be true.



The NASD Series 6 and 7 license exam prep books. You have to be sponsored to take the tests, but anybody can read the books.



One of the California Principles of Life Insurance license exam prep books. I understand New York state may have an even better program.



Above all, believe it or not, various military works. Sun Tzu, Frederick the Great, and Von Clausewitz in particular. Sun Tzu is easy reading, but if you're not careful, you'll miss something critical. Frederick is fairly straightforward. Von Clausewitz can be heavy going

but teaches too much to be foregone.