Donna H. wants to know what financial books and articles she should read to be a better investor.
She isn't alone. Many readers have sent similar queries, trying to get a head start on their resolution, effective January 1, to become savvy investors.
In fact, becoming a better investor may be one of the few resolutions we have a shot at keeping.
I'm serious. Just look at a typical list of serious resolutions:
- Absolutely, without fail, lose weight this year.
- Run a five minute mile by the end of 2007.
- Find the perfect person with whom to pursue reproductive opportunities.
A plausible goal, such as "I will become an informed investor," is a cinch compared to those three.
This list of books will make it even easier. I've picked most because they are easy to read, long on brevity, and don't require that you ever took annoying courses like calculus or statistics.
We start with Andrew Tobias. He's funny. He's smart without being imposing. And he gets it right. "The Only Investment Guide You'll Ever Need" was first published in an earlier geologic era, but he has updated and improved it over the many editions. Published by Harcourt, you can buy it as a $14 paperback. His chapter titles give you a hint of his humor: "A Penny Saved Is Two Pennies Earned," "The Case for Cowardice," and "What to Do If You Inherit a Million Dollars; What to Do Otherwise."
Then read "Getting Rich in America" by Dwight R. Lee and Richard B. McKenzie (Harper Business, $25). Rather than tell you how to multiply your money in plutonium or explaining twelve exciting things you can do with puts and calls, the authors give eight simple rules we all need to take seriously. Most of the rules have nothing to do with investing--- like getting married and staying married.
Then read "The Four Pillars of Investing" by William Bernstein (McGraw-Hill, $30). This entertaining and lucid book gives you a working blueprint of the investment markets, what (and who) we should avoid, and how to make good returns with reasonable risk. It's also funny, provided you aren't a stockbroker.
Follow it with "The Boglehead's Guide to Investing" by Taylor Larimore, Mel Lindauer, Micheal LeBoeuf, and John C. Bogle (Wiley, $25). I'm told the book evolved from long-term participation in the "Vanguard Diehards" discussion group on the Morningstar website,
www.morningstar.com (also worth visiting).
If you'd like to discover the excitement of ideas in economics and the interplay of history, follow on with another Bernstein book, "The Birth of Plenty: How the Prosperity of the Modern World Was Created" (McGraw-Hill, $30). Available as an audio book--- I listened to it on the long drive from Dallas to Santa Fe--- this book gives a real sense of the dynamism, the rush to create, that has driven the last 300 years.
Finally, read a book that will get your mind out of the hands of the Wall Street investment /retirement complex--- all those institutions that want us to save and invest unending amounts of money so that they can manage it, extracting zillions in fees. While all that money may go to worthy causes--- such as making their Mercedes payments, providing their children with beautiful teeth that glow in the dark, and liberating their expensive wine from its glass prison so it can find its way back into the water supply--- our best defense is to remember that life isn't just about money.
The latest book in this realm (following the classic "Your Money or Your Life" by Joe Dominguez and Vicki Robin, and Ralph Warner's "Get a Life: You Don't Need a Million to Retire Well") is "How to Retire Happy, Wild and Free: Retirement Wisdom That You Won't Get From Your Financial Adviser," by Ernie J. Zelinski (Ten Speed Press, $17). This book follows on his earlier "The Joy of Not Working," whose title gives you an idea of his central theme.
Trust me--- there are books about investing and personal finance that are far more complicated. But few are more accessible, useful and meaningful.
