Just ask any investor. The best investing books have the power to change your entire outlook – transforming how we see money, updating our investing mindset, and demystifying the stock market (from a casino into the long-term wealth machine that it is.)
We can all benefit from the lessons of great authors, and at Sarwa we are no different.
That is why we’ve collected some of the best investing books out there to launch our Sarwa Book Club.
Through this Sarwa-approved book list, you can learn timeless investing principles that can help shape your investing mindset – perhaps the most important thing for all investors to learn.
Developing such a mindset will prevent you from getting distracted.
Today, we live in a world with information overload. Blogs, podcasts, and YouTube videos offer a stream of content that can turn into noise. In this world, many people can get easily enthralled by “investing ideas” that turn out to be gambling, or – worse yet – plain old scams.
The best way to avoid this has always been to educate yourself.
By reading up on the time-tested principles of personal financial management, budgeting and investing, you’ll be giving yourself the tools needed to succeed and – perhaps more importantly – not get distracted or discouraged by the whims of so-called investment “gurus.”
The best investing books have been written and/or endorsed by many of the most successful investors of our time, and all offer one thing in common – a great foundation to start understanding how to apply smart long-term investing strategies.
In this article, we launch the Sarwa Book Club by highlighting 20 of such books. Many of the books in our list have been recommended by Sarwa employees who have found them to be a treasure when it comes to their own investment journeys.
We hope that you will also find them helpful in your own unique path of wealth-building discovery.
[Do you want to start your investment journey now by applying lessons found in this list of best investing books? Learn more about how Sarwa can help you, or schedule a call with a Sarwa wealth advisor that will answer all your questions.]
Written by Benjamin Graham, the mentor of Warren Buffett, The Intelligent Investor is one of the best books to read for stock market investing.
The book mentions three key features of an intelligent investor: their focus on long-term prospects of the company before investing; the protection of losses through diversification; and the focus on safe and steady returns rather than crazy profits.
These three principles ring true up until today.
The long-term ability of a company to grow its earnings remains a main determinant of whether its stock price will grow or not. Moreover, this focus on long-term prospects is evident when one considers Warren Buffet’s stock holdings.
Similarly, portfolio diversification remains a golden standard in the investing world when it comes to risk minimisation.
Also, concentrating on safe and steady returns over fast profit is still great wealth building advice even today. What’s also true today: The obsessive search for crazy profits is the primary reason why many investors lose money to scams (including pump and dump schemes) or poor investment decisions.
Another key principle that Benjamin Graham established has come to be known as value investing. According to this principle, investors should purchase the stocks of good companies (those with long-term prospects) when their market price is lower than their intrinsic value.
The Little Book of Common Sense Investing was written by John Bogle, the father of passive investing, and it is considered one of the best books for investing in stocks by many today.
Passive investing is the strategy of purchasing a basket of securities (index funds or ETFs) that tracks the performance of a given index rather than trying to outperform such an index. There are two main reasons passive investing has become more favoured in many circles:
First, passive investing is more cost-effective, more transparent, less risky, and provides more opportunities for diversification. Secondly, statistics show that most active funds, while charging higher fees and taking on greater risk, have failed to outperform their indices.
In his book, John Bogle laid out the foundation for the now-popular passive approach to investing. According to him, the best way for retail investors to get a fair share of market returns is to purchase low-cost passive index funds. Bogle also advocated long-term investing, maximising the power of compounding, and prioritising what works in the actual market.
“If one of your New Year’s resolutions is to improve your personal finances, here’s a suggestion: Instead of picking up one of the scores of new works flooding into bookstores, reread an old one: A Random Walk Down Wall Street.” That was the New York Times’s glowing review of A Random Walk Down Wall Street by Burton Malkiel, a professor of Economics at Princeton University.
The major premise of this book is that ordinary people without degrees in finance or an office on Wall Street can still win at investing by following established principles. While Burton goes through the principle of value investing and what fundamental analysis of stocks involves, his recommendation, like John Bogle’s, is that ordinary people can best build wealth through low-cost index funds.
Furthermore, Burton establishes the fact that a measure of risk is needed to build wealth and that instead of avoiding it, investors should seek to minimise their risk through diversification.
Burton also emphasises that some psychological and emotional discipline is required to succeed at investing. To avoid the fear-and-greed cycle that Warren Buffett talked about, investors must refuse to follow the crowd; instead, they should focus on what Graham above calls “safe and steady returns.”
Written by Andrew Hallam, a personal finance journalist, Millionaire Expat considers how expats can build wealth away from home.
Like John Bogle and Burton Malkiel, Andrew Hallam establishes that ordinary investors (expats in this case) can also build profitable investment portfolios without following the “financial sharks” who are out there to get their money. He also advises ordinary investors to stick to low-cost index funds and ETFs.
Andrew does not just tell investors what to buy, he shows them how and where to buy them. He also explains in detail why buying one asset is better than buying another, as well as insights on how to achieve tax efficiency while investing and what investors need to do based on their nationality.
Furthermore, Andrew shows that robo-advisors – or digital financial advisors – can be a good way to build profitable and tax-efficient portfolios, and he provides a list of some of the most reputable ones.
George Clason’s The Richest Man in Babylon is considered one of the best investing books ever published, a true classic that contains “timeless rules that work for everyone” and “shows you the importance of working on your skills,” according to Amel Asseyr, a member of the Sarwa staff. Here, Clason focuses on how to make money, keep it, and make it grow, using tales and parables set in ancient Babylonia.
Regarding earning money, George believes that anyone can become lucky by learning to work hard. This is in line with the common saying that “luck favours the prepared.” Skills development and the maximum use of opportunities are the kinds of preparation that luck favours, according to George.
Secondly, those who want to build wealth must live below their means. In the book, George advises that readers save 10% of their income towards wealth building.
More impressive is his “pay yourself first” dictum. According to him, you should first save 10% of your income and keep it away before spending what remains (the 90%). That is, spend what remains instead of saving what remains. This principle has become a key part of budgeting in today’s personal finance management.
Finally, learn how to wisely invest your savings to generate wealth. While saving money is good, investing the money saved is the only way to truly build great wealth over time.
The Psychology of Money was written by Morgan Housel, a partner at The Collaborative Fund, a network of fund managers.
In this book, Morgan shows through 19 short stories how emotion (especially greed and envy) plays a great role in many of our money decisions and how we can change the tide by making more rational decisions. He also shows that many of the money decisions we make later in life result from our early experiences.
This book is especially relevant for people who feel they have made huge money mistakes and don’t know what to do to correct them. It does not just help you identify the root causes of such mistakes, but it also shows how you can go beyond those mistakes to make more rational decisions that will improve your finances.
Though it is “all-too-shared,” Rich Dad, Poor Dad still remains one of the best investing books, according to Nadine Mezher, CMO and Co-founder at Sarwa.
In this book, Robert Kiyosaki chronicles his journey to wealth by differentiating between what he learnt from his biological Dad (poor Dad) and his friend’s Dad (rich Dad). While the former drummed up the popular “go to school and get a good job” rhetoric – working for money – the latter told him that wealth is built when you learn how to get money to work for you.
Robert followed the latter path by learning how to invest in stocks and real estate, as well as by leveraging other people’s money to build his wealth, which is one of the key points of the book.
Some of the other key takeaways of this book include learning how to invest in your financial education, spending money on assets rather than liabilities, taking on calculated risk, and paying yourself first.
Oprah Winfey has called Your Money or Your Life by Vicki Robin and Joe Dominguez “a wonderful book” that “can really change your life.”
This book attempts to help readers calibrate their financial life, moving them from debt to wealth building in nine steps. It focuses by helping readers get out of debt, save a portion of their income, and invest that savings to build wealth.
Unlike other financial management books, Your Money or Your Life approaches savings not from the strict budgeting perspective but a focus on mindfulness and the development of healthy habits. That is, the authors believe you can reduce your cost of living even without diminishing your standard of living.
Also, the authors focus on sustainability, which has become an important topic globally. It shows that the development of healthy habits can help readers save money, as well as save the planet.
Like The Psychology of Money, this is a good book for those who have experienced financial mess and are looking for a way to start fresh.
Written by Malcolm Gladwell, Outliers helps us analyse why “people have a specific idea of what success means in their minds, and how overarching structures play a massive role in shaping our journeys,” according to Alex Ghanem, Content Manager at Sarwa.
While we all recognise that there are high-achievers among us who have accomplished feats that many can only dream of, Malcolm suggests that we are often mistaken about the contributing factors to their success.
In this book, he shows how family background, upbringing, culture, generation, and others shape the life realities of these outliers and contribute to their outstanding success.
This is especially important in the world of investing since many people will quickly recognise that the success of many popular investors is almost impossible to replicate. For Malcolm, this is because there are many factors that contribute to the success of outliers.
Written by Carl Richards, founder of Prasada Capital Management, Behaviour Gap is “one of the easiest and most informative reads” for new investors, according to Alex.
This book is similar in approach to The Psychology of Money – it shows the psychological biases and tendencies that lead us to make poor financial decisions and what we need to know and do to make better ones.
Carl also makes many important points regarding investing: You can’t successfully time the market; higher returns generally come with higher risk but this doesn’t generally lead to higher returns; successful investing requires humility; past performance is not a proof of future ones; don’t follow the herd; if an investment opportunity looks too good to be true, it probably is; and financial planning should be personalised.
With these principles, new investors can start on the right path and those who have made a mess can ditch the old path and follow a better one.
Ordinary investors can spot good investment opportunities even before the experts. This is the primary thesis of One Up On Wall Street by Peter Lynch, the former manager of the Magellan Fund at Fidelity Investments.
The average investor can do this by paying attention to the best goods and services they encounter in their daily life. Many of these goods and services will be produced or offered by companies that are not yet in the sight of professional managers. By buying such stocks earlier, ordinary investors can earn huge returns.
Also, Peter considers the features of stocks he calls “tenbaggers,” those that can see a tenfold rise in their price and how ordinary investors can check if any of the companies will be one or not. Similarly, he identifies five features of bad investments that investors must be wary of.
Though buying index funds or ETFs is now the main recommendation for ordinary investors, Peter thinks that by paying attention to some key principles, they can also pick profitable tenbaggers.
Written by Philip Fisher, the founder of Fisher and Co, a fund management company, Common Stocks and Uncommon Profits is one of the personal favourites of Warren Buffett and one of the best books to read for stock market investing. As Warren said, “I sought out Phil Fisher after reading his Common Stocks and Uncommon Profits…When I met him, I was impressed by the man as by his ideas.”
The central idea that Philip presents is that investors should focus on the long-term prospects of a company when selecting a stock. When it comes to value, Philip believes that the growth potential of a company is the most important. Therefore, identifying long-term growth stocks is at the heart of stock investing.
Like Warren and Benjamin, Philip espoused long-term investing rather than short-term trading as well as a focus on a company’s fundamentals rather than his current price movements.
Furthermore, he believed that the best time to buy a good stock is when the price has fallen. This provides investors with an opportunity to minimise cost and maximise returns.
A detailed overview of the secrets of Warren Buffett’s investing success, The Warren Buffett Way by Robert Hagstrom, a senior portfolio manager at EquityCompass, a fund management company, is one of the best investing books for beginners and seasoned investors alike.
Robert highlights some of the important principles that have characterised the iconic run of the Warren Buffett investing approach: fundamental analysis, focus on the long term, and emotional discipline, among others.
In addition to outlining these principles, Robert analyses Warren’s holdings to show how he has applied these principles in each of his stock selections.
In The Only Investment Guide You Will Ever Need, Andrew Tobias, a former treasurer of the Democratic National Committee, provides tips, information, and advice on various personal management topics. It is similar to Your Money or Your Life in terms of its comprehensiveness.
In addition to general tips on budgeting, saving, investing, retirement planning, among others, the new edition also talks about cryptocurrencies, NFTs, sustainable investing, and COVID-19.
How to Buy Stocks, written by Louis Engel, a former advertiser at Merril Lynch and Henry Hecht, is a classic and widely considered one of the best investment books for beginners.
This is an introductory book that aims to help investors understand all the basics of the stock and bond market. Do you want to know what a publicly traded company is, what a stock is, how it differs from bonds, and what the stock exchange actually does? Then this is the book to read.
While all the other stock investing books above focus more on the principles of stock investing, this one helps to demystify the stock (and bond) markets so you can better understand what you are investing in.
Warren Buffett said you should not invest in what you don’t understand; this is the book that will help you heed that advice.
Written by Jeremy Siegel, a professor of finance at Wharton School of Finance, University of Pennsylvania, Stocks for the Long Run shows why long-term investing is so commonly preferred over short-term trading.
According to Jeremy, price movements in the short run are driven by interest rates, risk, uncertainty, changes in earnings, and other emotional and psychological factors while in the long-run, they reflect the actual value of the underlying company/asset. Therefore, one is better keeping their money invested in the long run instead of reacting to short-term fluctuations that are heavily influenced by emotion.
Though stocks are volatile, Jeremy believes that their high returns makes them the best for building wealth; therefore, instead of shunning them, investors should seek to minimise their risk and stay invested.
In general, investors should focus on selecting the right investments (based on fundamentals), creating balanced portfolios, and spending time in the market through a long-term approach.
Everyday Millionaires, written by Chris Hogan, a former radio show host at The Ramsey Solutions, a personal finance management company, has one simple thesis: “ordinary people have become millionaires and you can as well.”
The book begins by showing, based on research, that most American millionaires worked for their money; that is, they didn’t inherit wealth. It then goes on to show that anyone can follow the principles that characterised these “self-made” millionaires and build wealth for themselves.
In addition to identifying the basic financial management principles that these millionaires have applied (paying off debt, creating a budget, living below their means, investing early), he also emphasised the importance of taking responsibility for one’s finances instead of playing the victim. That sense of personal responsibility is crucial for financial success.
Written by Thomas Stanley, a former professor of Marketing at Georgia State University, The Millionaire Next Door is an inquiry into how millionaires in America built their wealth. Its thesis is similar to Everyday Millionaires: “if they can do it, you can too.”
Thomas identified seven principles that characterised millionaires: living below their means, developing a financial strategy, prioritising financial independence, frugality, raising financially responsible children, leveraging market opportunities, and choosing their occupation wisely.
With these principles, you can also set yourself up to build wealth just like self-made millionaires.
In 7 Simple Steps to Financial Freedom, Tony Robbins, a popular author and life strategist, lays out the main steps that anyone can take to achieve financial freedom and independence.
The steps highlighted by Tony Robbins include saving towards retirement, investing in financial education, figuring the amount you need to retire early, investment diversification, creating a lifetime income plan, and using the investment principles of Warren, Bogle, and others.
Robert Kiyosaki mentioned that financial freedom is the best way to get out of the “rat race;” in this book, Tony Robbins shows you how to do that in simple steps.
Cracking the Millionaire Code by Mark Hansen, a motivational speaker and author and Robert Allen, an investment advisor, has a simple thesis: you can build wealth without sacrificing your values, health, spirituality, freedom, friends and family.
The authors support this thesis by recounting the stories of different people who have built wealth by keeping their finances under control and investing in profitable opportunities.
There are four codes that you must unlock to become a millionaire: the destiny code (discovering your unique place in the world), the prism code (refracting multiple income streams), the angel code (networking with the right people), and the star code (treating customers well).
Unlike books 15 and 16 in the list, this one focuses on unleashing the entrepreneurial spirit within to create and/or invest in profitable businesses.
We know that the Sarwa Book Club is a long list of best investing books and it might be a bit difficult knowing where to start. To make things easier, focus on where you currently are in your financial life and choose the book that is best suited for you at this time.
For example, are your finances in a mess due to poor decisions? The Psychology of Money and Behaviour Gap could be a good place to start.
Are you seeking to get a general overview of the stock market? How to Buy Stocks is then a good pick.
What’s most important is to invest in your financial education, and that can start right here, right now.
[Look to this list in the coming months. We’ll be updating it periodically with new entries for the best investing books.]
[Are you ready to start achieving your financial goals with the time-tested investing principles found in these best investing books? Schedule a call with a Sarwa wealth advisor and we will guide you on the path towards financial fulfilment.]
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