Personal Finance
Written by Kathleen Elkins; edited by Libby Kane
2015-11-10T17:10:00Z
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If you want to get rich, the single most effective way to do it is to invest.
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"On average, millionaires invest 20% of their household income each year. Their wealth isn't measured by the amount they make each year, but by how they've saved and invested over time," writes Ramit Sethi in his New York Times bestseller, "I Will Teach You To Be Rich."
To help you get started, we compiled some of the greatest books out there on investing by sorting through legendary investor Warren Buffett's favorites, and adding a few of our own top picks.
No guarantees, of course — but if you want to get rich, it can't hurt to get reading.
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'The Intelligent Investor,' by Benjamin Graham
WarrenBuffett first picked up a copy of legendary Wall Streeter Benjamin Graham's "The Intelligent Investor" when he was 19. It was one of the luckiest moments of his life, he said, because it gave him the intellectual framework for investing.
Buffett is not the only fan: Billionaire investor Bill Ackman, among countless other Wall Street power players, cite this in-depth introduction to value investing as life-changing.
Even if the industry you work in is far removed from finance, Graham's advice will help you make the most of your money in the long term.
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'The Little Book of Common Sense Investing,' by Jack Bogle
Endorsed by Buffett in his 2014 Berkshire Hathaway shareholder letter, "The Little Book of Common Sense Investing" tells you how to use index funds to build wealth.
Bogle, founder of the Vanguard Group and creator of the world's first index fund, explains why these relatively straightforward vehicles can be so effective — and warns against investment fads and fashions.
Fans say it's far from boring, and the stats and charts are balanced with anecdotes and advice.
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'The Investment Answer,' by Daniel C. Goldie and Gordon S. Murray
In "The Investment Answer," Goldie and Murray provide a general guide to investing by focusing on five decisions every investor has to make. These include whether to invest alone or with a professional; how to allocate among stocks, bonds, and cash; and when to sell or buy assets.
Murray, a Wall Street veteran, and Goldie, a financial adviser, keep their guide brief and jargon-free for any investor — experienced, beginner, and everyone in between.
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'Security Analysis,' by Benjamin Graham and David L. Dodd
Another book from Buffett's mentor Benjamin Graham, "Security Analysis" has given Buffett "a road map for investing that I have now been following for 57 years," he said.
The bookrevolves around the idea that if your analysis is thorough enough, you can figure out the value of a company — and if the market knows the same.
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'A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing,' by Burton Malkiel
Burton Malkiel's classic guide to investing has been established as the go-to book to buy when starting a portfolio.
In "A Random Walk Down Wall Street," the Princeton professor takes on a number of investing strategies, axioms, truisms, and superstitions, explaining why low-cost index funds will serve the individual investor better than any other strategy for choosing stocks.
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'The Essays of Warren Buffett,' by Warren Buffett
What better way to learn to invest than getting inside the head of the greatest investor of all time?
This collection of over 700 pages of Buffett's letters and notes gives a clearer picture of the billionaire's philosophies on business, investing, and life — and while it's full of gems, it centers around one core concept: the difference between price and value.
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'Reminiscences of a Stock Operator,' by Edwin Lefèvre
Highly regarded by bond guru Jeff Gundlach, who named "Reminiscences of a Stock Operator" his favorite investment book of all time, this 1923 classic is the fictionalized biography of the legendary trader Jessie Livermore, who won and lost tens of millions of dollars playing the stock market game during the 1900s.
Filled with anecdotes that recount Livermore’s mastery of the markets from the age of 14, Lefèvre's book offers timeless lessons that any investor can learn from.
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'Common Stocks and Uncommon Profits,' by Philip Fisher
Another Buffett-endorsed book — which he regards as life-changing — Fisher's "Common Stocks and Uncommon Profits" emphasizes that fixating on financial statements isn't enough — you also need to evaluate a company's management. He outlines 15 things to look for in
Although first published in 1958, Fisher's insights are still just as useful, and his philosophies just as relevant, today.
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'The Clash of the Cultures,' by John Bogle
In Bogle's "The Clash of the Cultures" the creator of the world's first index fund argues that long-term investing has been crowded out by short-term speculation.
His book is not all argument, however. He wraps it upwith practical investment tips, such as taking advantage of compound interest, resisting impulse buy and sell decisions, not following the herd, and reverting to thefundamentals when it comes to investing.
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'Elements of Investing: Easy Lessons for Every Investor,' by Burton Malkiel and Charles Ellis
"Elements of Investing" is a must-read, straight-talking book for anyone saving for retirement in a 401K, IRA, or brokerage account.
Malkiel and Ellis keep it short and easy to read, while still covering all the basics you need to get started as an investor. The two great financial thinkers show that investing is one of the only things in life where hard work leads to worse results.
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'Poor Charlie's Almanack,' edited by Peter Kaufman
This collection of advice from Charlie Munger, Buffett's partner and vice chairman of Berkshire Hathaway, includes biographical information, as well as summaries of his philosophy on investing and talks from Berkshire Hathaway meetings.
"Scholars have for too long debated whether Charlie is the reincarnation of Ben Franklin," Buffett wrote in his 2014 shareholder letter. "This book should settle the question."
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'The Most Important Thing Illuminated,' by Howard Marks
In "The Most Important Thing," Marks — chairman and cofounder of Oak Tree Capital — aims to help investors achieve success by putting more thought into their decisions, drawing heavily on his own mistakes and what he learned from them.
In addition to highlighting the keys to successful investing, he also spells out the pitfalls that can destroy capital and careers.
The result? "A rarity, a useful book," legendary investor Buffett says of it.
Investing Correspondent
Kathleen is a correspondent at Insider, covering investing and the path to financial freedom. She started her career as an editorial intern at Business Insider in 2015, covered personal finance at CNBC Make It for four years, and returned to Insider in 2021. She graduated from Williams College in 2014 and currently resides in Los Angeles. Follow her on Twitter at @kathleen_elk.
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