Must-Reads for Beginning Investors
Readers and friends often say to me, “I don’t know anything about investing. How do I get started?”
It’s a great question to ask because the important thing is to, in fact, get started.
We know that markets go up over the long term, and we know that the longer you invest, the more money you will have. So waiting even a few years until you have more knowledge could have a profoundly negative impact on your net worth down the road.
Below are my suggestions, in the order that you should read them, for some resources that will help you understand the world of investing.
And if you are already somewhat knowledgeable about the world of money, Christmas is less than three months away. I’m sure you have a relative or friend who would benefit…
The Best Finance Books and Resources for Beginning Investors
The Richest Man in Babylon by George S. Clason – Written 93 years ago, this short and very easy-to-read book tells the story of a fictional character in ancient Babylon and the financial wisdom he accumulates over time.
There are no investing “tips” in this book, but rather life lessons for how to accumulate wealth. For someone who has yet to start thinking about their financial life, this is a must-read.
At a recent Oxford Club conference, I was asked for the No. 1 book about investing that I would recommend. My answer was The Richest Man in Babylon.
Understanding Wall Street by Jeffrey Little – This is the book that got me started when I was 22 years old. It very simply explains basic concepts, such as what stocks and bonds actually are and how the stock market works.
Later, it goes into more advanced concepts like options, gold and silver, and manias and panics.
I cannot recommend it highly enough for anyone who is beginning their journey as an investor.
The Gone Fishin’ Portfolio by Alexander Green – Written by my friend Alex, Chief Investment Strategist at The Oxford Club, this book is perfect for anyone who wants the closest thing to a “set it and forget it” investing strategy.
Alex shows you how you can build wealth by paying attention to your portfolio for only about 15 minutes a year.
Get Rich with Dividends by Marc Lichtenfeld – I wrote this, and I’m as proud of it as I am of anything else I’ve done in my career.
Get Rich with Dividends was named the Book of the Year by the Institute for Financial Literacy in 2016, and it is published in three languages (soon to be four).
Written for investors with anywhere from no experience to moderate experience, this book shows why a portfolio of dividend-growth stocks will outperform the market, provide more income each year and help you compound your wealth.
Financial newspapers – Once you have some basic knowledge, pick up a copy of Barron’s, Investor’s Business Daily, The New York Times business section or The Wall Street Journal.
(Stick to the financial stuff – you can skip the world news and politics.) Read them cover to cover even if it takes you a few weeks to fully understand them.
This will expose you to a wide range of ideas and terms. Even if you don’t think you need to know about a particular area, understanding what’s going on in that part of the financial world will help you be a more astute investor.
But I always read the real estate section so that I had an idea about what was happening in that area. It helped me analyze the bigger picture and understand interest rates. It’s an interconnected world, so have a basic understanding of how it all fits together.
The Oxford Income Letter – If you are ready to take the plunge and invest but want advice on which stocks to buy, take a look at The Oxford Income Letter.
Every month in The Oxford Income Letter, I will steer you to the best dividend-growth stocks and high-yielding stocks in the market.
There’s no fancy jargon and no difficult financial concepts. Just easy-to-understand ideas and actionable advice that will help you grow your income and wealth.
What are your favorite sources for beginners? Please let us know in the comments section below.
About Marc Lichtenfeld
A master of the steady, reliable science of income investing, Marc’s commentary has appeared in The Wall Street Journal, Barron’s and U.S. News & World Report. He has also appeared on CNBC, Fox Business and Yahoo Finance. His book Get Rich With Dividends: A Proven System for Double-Digit Returns achieved best-seller status shortly after its release in 2012. He captures the hearts and minds of readers approaching their golden years in his daily e-letter, Wealthy Retirement.