Best Introductory Book on Investing

[ScaredtoQuit]

This weekend, my God Son got into a conversation with me about investing. I was shocked by his lack of knowledge. He's 36, newly married, and has a family income that's probably around $130K. I was appalled to learn that he wanted advice on how to invest $5,000. I began talking about index funds but quickly learned that he didn't know what an index was. So I started describing the three major indexes but didn't really get very far because his wife and the friends who were accompanying them were ready to leave.

It occurred to me that the best solution would be to recommend an introductory book on investing. But I've never read a book that elementary. Do any of you out there know a good book on investing that starts at ground zero??

 

[Travelwanted]

This weekend, my God Son got into a conversation with me about investing. I was shocked by his lack of knowledge. He's 36, newly married, and has a family income that's probably around $130K. I was appalled to learn that he wanted advice on how to invest $5,000. I began talking about index funds but quickly learned that he didn't know what an index was. So I started describing the three major indexes but didn't really get very far because his wife and the friends who were accompanying them were ready to leave.

It occurred to me that the best solution would be to recommend an introductory book on investing. But I've never read a book that elementary. Do any of you out there know a good book on investing that starts at ground zero??

79% of millennials are not in the stock market...unbelievable.

Bogleheads Guide to Investing
https://www.amazon.com/Bogleheads-G...sr=8-1&keywords=bogleheads+guide+to+investing

 

[walkinwood]

I think it depends on what his interest is and how much he likes to delve into details. For me, an engineer by training and profession, Bernstein's The Four Pillars of Investment is the best.

Jack Bogle is good at simplifying the topic. His black book on investing (or is it mutual funds) may be a good one to get started on.

Or, you "schedule" a session with him and walk him through the basics. For some people, that latter approach is best. I would prepare just as I would if it were a presentation to a customer/peer at work.

 

[bclover]

79% of millennials are not in the stock market...unbelievable.

Bogleheads Guide to Investing
https://www.amazon.com/Bogleheads-G...sr=8-1&keywords=bogleheads+guide+to+investing

Not unbelievable at all. LOL, I live with 3 millennials (Is there a "god give me strength smilie). 25, 23 and 20. Now my 25 has Asperger's so he's in a bit harder.
All 3 are working there way through school, 23 yo in his final year of college, 20 yo 2 more years left.

Believe me when I tell you investing is the last thing on their minds. No matter how much I talk, yell, plead with them about it. Let me say they are not "party" animals, in fact the youngest 2 are bona fide "geeks". The most they spend money on is ball games.
They all work part time jobs and they participate in their companies 401K (4%) primarily because I make it a requirement.

right now their main concerns are
1) saving money for their books and limited social life
2) paying their cell phone bill and contrary to popular belief no one has an I-phone
3) saving for their car insurance. Unfortunately as young males in the urban city, their bill is about 2K a year.
4) gas, toll and daily expenses.

Now my 20 year old works for wawa pumping gas, he may bring in 150 a week. not much left to invest.

Now of course, hopefully when they graduate better salaries will kick in but none of my kids are engineers, so they probably will not be making the kinds of salaries everyone here has.

So it's not hard for me to believe at all. after they graduate I'm assuming that they will want their own apartments and since the cars they drive are at least 8 years old they are going to at some point have a car note.

Personally I hate books. first, I find almost every book I've tried to choke down, dry as dust and within 5 minutes puts me to sleep.

Currently on my kindle I have 7 beginner investment books (boglehead guide to investment, the art of asset allocation, and a few others), I have not been able to finish one. just not my style of learning. although I do like magazines.

 

[RobbieB]

Yes, when you are young and have no dough it's hard to invest. The Co. 401K is the best way to get a good start. Hardly even costs anything with the tax advantage.

Then you need the "slush fund" so you don't pay CC interest.

And millennials are somewhat scared of the market because of the crash.

But all that can get in with a "Company Plan" should and you don't need to know anything about investing.

 

[DrRoy]

It's not exactly a primer, but I always recommend Your Money and Your Brain by Jason Zweig.

 

[REWahoo]

This online book is excellent - and free. It covers the basics of investing very well and is something I recommend to anyone who wants to learn how to invest.

Road Map for Investing Success: Investing Essentials – A Primer

 

[2HOTinPHX]

With busy lives and short attention spans these days I would highly recommend they watch this video first...

If they have really short attention spans fast forward to 18:14 for great hilarius summary.

Hopefully this will get them thinking about the subject and be more open to reading some of the suggested books....

 

[travelover]

..............It occurred to me that the best solution would be to recommend an introductory book on investing. But I've never read a book that elementary. Do any of you out there know a good book on investing that starts at ground zero??

I hope you have better luck than I've had. I've talked, I've sent books, I've emailed detailed advice. All anyone seems to want is a get rich quick scheme because the idea of gradually investing in index funds is soooooo boring. I even offered to open a funded IRA for my step daughter. She just wanted the money NOW.

 

[Ready]

I'd recommend the book "Investing For Dummies". It's a very easy, light read with a good bit of humor in it. The Bernstein and Bogle books are great for people in this forum, but for someone who really doesn't want to learn about this stuff, the Dummies book is not nearly as imposing to get through.


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[mickeyd]

Do any of you out there know a good book on investing that starts at ground zero??

Bogleheads Guide to Investing is the book that I have often recommended. It gets new investors headed in the proper direction toward index funds.


Note of caution~ they must actually read the book and take note of its' contents.

 

[akck]

This is the book I always recommend:

https://www.amazon.com/Investment-A...1215914&sr=8-1&keywords=the+investment+answer

It's a short book, so it isn't a hard read, but it covers much of what I learned in school about investments.

 

[retirementguy1]

John Bogle wrote a book on index investing. It might take two hours to read. Even easier than investing for dummies.

https://www.amazon.com/Little-Book-...TF8&qid=1471219365&sr=1-1&keywords=john+bogle

I read the bogleheads guide but after I read Bogle and Bernstein. It was mostly retread by then. Bogle's book is not much bigger than the palm of your hand.

 

[Markola]

"The Simple Path to Wealth" by JL Collins. It emphasizes simple.


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[retire2020]

Millionaire Teacher....Good introductory book. I had my daughter read it(at age 17) and write a book report on it. I paid her 50 bucks to do that.
Result - Today, Three years later, she has 15K in her Roth IRA.


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[Greg V]

This is the book I always recommend:

https://www.amazon.com/Investment-A...1215914&sr=8-1&keywords=the+investment+answer

It's a short book, so it isn't a hard read, but it covers much of what I learned in school about investments.

Add my endorsement to this choice.

 

[swakyaby]

I'd recommend the book "Investing For Dummies". It's a very easy, light read with a good bit of humor in it. The Bernstein and Bogle books are great for people in this forum, but for someone who really doesn't want to learn about this stuff, the Dummies book is not nearly as imposing to get through.

I second this one. Saw it in the library, published 2016 so it's current. It's helpful for people new to investing and gives common sense advice. Easy to read.

 

[Sunset]

A Random Walk Down Wallstreet was a good read and has been updated many times over the years.

 

[Totoro]

"The Simple Path to Wealth" by JL Collins. It emphasizes simple.

I like him alot, too.

Start with referring to his blog post:
How I failed my daughter and a simple path to wealth

I have the impression you are explaining step #alot while he's probably still at step #1.

Dilbert's plan is nice as well:
Dilbert's One Page Book on Personal Finance - Money Nomad

a few more words, roughly the same:
The one-page guide to financial independence

The most important thing however is making sure he understands why this stuff is important. A jlcollins post explains this quite well methinks:
Why you need F-you money

 

[steady saver]

Not unbelievable at all. LOL, I live with 3 millennials (Is there a "god give me strength smilie). 25, 23 and 20. Now my 25 has Asperger's so he's in a bit harder.
All 3 are working there way through school, 23 yo in his final year of college, 20 yo 2 more years left.

I understand. I have two sons, 23 and 21. My eldest has invested since he was 16. (He and I met once a week so I could teach him the stock market while his younger son was helping teach group piano lessons...) When he went to college he switched his individual stock investments to index funds because he didn't have time to follow things. Smart move.

My 21 year old has zero interest. Not a problem. Yet. He doesn't spend a lot of money. I convinced him to keep out what he "needs" and take the extra and I set up a Fidelity account for him and put his excess in an index fund. I occasionally show him how much his seed money has grown. That interests him. I'm hoping that when he graduates and sees how his money has grown with passive index investing, that he will at least continue to invest in this way. They both know that investing in their (future) employer's 401K would be a no-brainer and I will be on them to do that too.

Sometimes it just takes much longer for a person to "get it" than others. That doesn't mean that mom or dad (or uncle or aunt or grandparent or coach...) can't step in and offer guidance. I wouldn't be investing today had my own dad not taken an interest in teaching me the basics when I was in 4th grade. Now, I didn't start investing until I was in my 20's and my husband had access to a 401K. That started things. But I had the idea firmly planted in my psyche from my dad. He subscribed to "Changing Times" forever it seems.

Parenting is one part modeling, one part pushing and a whole lot of patience and nail biting

 

[Koogie]

Millionaire Teacher....Good introductory book. I had my daughter read it(at age 17) and write a book report on it. I paid her 50 bucks to do that.
Result - Today, Three years later, she has 15K in her Roth IRA.
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+1 This is the one I always recommend. It is actually readable, unlike so many of them.

There is also this book that is getting a lot of play right now... I have not read it.. for obvious reasons...

Millenial Money
https://books.google.ca/books/about/Millennial_Money.html?id=-P-gBAAAQBAJ&redir_esc=y&hl=en

 

[Walt34]

Personally I hate books. first, I find almost every book I've tried to choke down, dry as dust and within 5 minutes puts me to sleep.

Clearly, you are not a candidate for Thinking, Fast and Slow by Daniel Kahneman, a 499 page tome on why people make the spending decisions they do. I found it fascinating.

Kahnman is the only psychologist to win a Nobel Prize in economics.

More practically for the OP I also liked the book The Millionaire Teacher. Predictably Irrational was a recreational read for me.

 

[Ed_The_Gypsy]

I recommend The Coffeehouse Investor. A very small book, as indexing is simple. His 'Out-fox the box' example is simple and golden.

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[OneDay]

My teenage sons favorite book was " Rich Dad, Poor Dad, he also reads a lot of Mr Money Mustaches blogs.

 

[RunningBum]

How about that index card of financial advice? Google it to find more. Seems like a good starting place, especially for someone who may not want to sit down and read a whole book.


For my son, I wrote up my own document, a few pages covering things like LBYM, staying out of debt, account types, index vs managed vs individual stocks, insurance, fees, taxes, etc. I tried to tailor it to our life and relate things I've done. I concluded with the suggestion of a basic diversification plan of stocks/bonds/international in VG index funds, suggesting 110-age in stock, 2/3 US and 1/3 international. Pointed out it's not the only way, but watch out for fees and why not to chase returns.