The 5 Books That Shaped Me (As An Investor) — Vol. 3
As a kid, I remember libraries and bookstores representing a sense of infinite possibility. I still get a rush when I walk into one today. Books have played an instrumental role in my development as a creative, entrepreneur, business owner and lifelong learner by forcing me to reimagine what I previously believed to be possible.
This series will catalog the books that have moved me more than others and I hope they provide you with the push you’re looking for. I’ve stayed away from the typical business/self-awareness books that many of us are used to hearing about. These are in no particular order. Enjoy.
I Will Teach You To Be Rich — Ramit Sethi
As much as I hate the title of this book, it’s a keeper. If you’re looking to develop a blueprint for your personal finance goals, start here.
Ramit delivers everything in simple, digestible terms and breaks down the “why” at every crucial the moment. Why it’s important to start early, why it’s important to negotiate everything and so on. He also covers multiple sides of personal finance, especially how to manage debt, “good” debt vs. “bad” debt and developing a healthy relationship with it.
I read this book in my mid-20s and it highlighted many simple things I was missing in my personal finance routine — a high yield savings account, Dollar Cost Averaging in the equity market and more. I literally opened an online savings account at Barclays the day after I finished reading this and have been contributing to it monthly for the 7 years since. This book is the one you shouldn’t judge by it’s cover.
Buffett: The Making of an American Capitalist — Roger Lowenstein
The reason why Warren Buffett biographies are so impactful is because they outline the simplicity and consistency behind the his investment strategy. It wasn’t based on algorithms or high frequency trading but rather on business fundamentals (profit margins, debt to equity, etc), customer resonance (the infamous Dairy Queen story) and finding undervalued companies.
This book does a great job highlighting all the small vignettes and foundational moments that culminated into things like Berkshire Hathaway. It reads like a story but contains a ton of investment advice along the way.
The Bogleheads’ Guide to Investing — Taylor Larimore
Ever heard the term “Boglehead”? Don’t stress if you haven’t. It’s term dedicated to a niche group of investors who follow the principles of John Bogle, the man behind the legendary financial institution The Vanguard Group. He’s also credited with creating the first index fund and thus famously being known as a contrarian investor — believing that an index fund will always beat active investing in the market over time.
This book breaks down exactly how the average investor like you and I has no business picking individual stocks in an effort to beat the market and is best suited by a owning diverse set of index funds. A really great place to start building your investment foundation.
Disclaimer: The majority of my portfolio is held in Vanguard mutual funds. This post is in no way an endorsement of any product.
What Every Real Estate Investor Needs to Know about Cash Flow… And 36 Other Key Financial Measures — Frank Gallinelli
Though I believe qualitative insights are important when real estate investing, ultimately you have to know your numbers. If you buy in to a great neighborhood at the wrong price, you will always be in trouble. This is a great place to start if you’re looking to learn all the metrics important to evaluating a real estate investment. From NOIs to cap rates, you should start here.
Treat this book like a dose of medicine — it’s not exciting but it’s essential.
Flash Boys: A Wall Street Revolt — Michael Lewis
Part of being a successful investor is knowing what you don’t know. Michael Lewis is known for his gripping tales of high finance, but this book provides key lessons for us non-institutional investors. Flash Boys is about the world of high frequency trading — a world where profits are predicated on complex trading algorithms, lightning fast fiber connectivity and millions of dollars in arbitrage happens every 0.001 seconds.
This book further emphasizes the inherent disadvantage that regular investors are at. Information and money travels way faster on Wall St. before it reaches us and due to this, there’s no way that you’ll ever have the upper hand. This book reinforced the idea that a diversified, mutual fund heavy, long term approach is the only way to win.
If you’re into finance non-fiction like I am, this is a phenomenal read.
Have thoughts on these or have a book I should read? You can find me at @anihustles.