5 Best Books for Every New Investors 2022

You may have just come into the market wondering how to make money, how one makes money or lured in through the Warren Buffet talks going through your surroundings all the time.

Here, in this article, we will give you the list of five top books that will guide the new investor to sail through markets understanding the basics and working of the stock market.

1) Little Book Common Sense Investing by John C Bogle

All investing requires is common sense and a sharp mind. Trying to be at the top of the stock market requires an intelligent investment strategy. Common sense tells us that the best way of investing is to hold all the government risk-free securities at a very low cost.

This strategy only confirms the guaranteed returns to the investors. John C Bogle the founder of the Vanguard Group and the world’s first index mutual fund has taken a strategy to invest in index funds. Successful investment is not that easy for it requires common sense from the investors.

This book focuses on index investing. Vanguard has rightly said,” Trying to beat the market “is a loser’s game,” and “the more the managers and brokers take, the fewer investors make.”

The readers would learn about investment fads and fashion, including the arrival of ETFs and the rise of index funds. This book primarily covers the following topics

  • What expert investors as Warren Buffet has to say about index investment
  • How the compounding of cash balance at bank is offset by its compounding costs
  • Why dividend yield and earnings growth is important than market expectations
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2) Security analysis by Benjamin Graham

This book is one of the most fundamental books in the history of financial investment analysis. This book directs to teach investors along with readers the analysis behind the investment in securities. It helps investors and readers to analyze the financial position of the company to determine the intrinsic value of the company and make informed decisions.

Despite being published almost 8 decades ago, this book still holds prominence in the field of security analysis and investment management. The book is focused on the careful analysis of the balance sheet as a road to investment success.

This edition gives guidance on analyzing securities that generations have followed and relied on till now. This book provides the principles and techniques of security valuation, asset valuation which can enlighten readers with an insight into the net worth of companies.

You can get tips to take judicious financial decisions irrespective of your knowledge and profession. This book is filled with various illustrations and is aimed at investors to play the investment game.

3) Psychology of Money by Morgan Housel

In the Psychology of Money, the uber-cool author and fin twitter recognized celebrity writer Morgan Housel shares 19 short stories depicting the odd ways people think about money and teaches us to make better use of our life’s most important issues.

Money is generally taught as a calculation-based area where all the incomes and expenditures are piled up and calculated. In the real world, people don’t make decisions in a business setting albeit they take decisions while taking food, chatting with friends and family.

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Housel has focused on devising relationships between people and money with an immediate focus on human behavior. The book primarily focuses on individual human behavior towards money. Some lessons stop us from conducting certain behaviors, other lessons encourage us to embrace positive behaviors.

Housel makes it clear that financial management is a behavioral skill. He has rightly pinned out “Financial success is not hard science. It’s a soft skill, where how you behave is more important than what you know.”

4) The Essays of Warren Buffett by Lawrence Cunningham

The newly updated version by Warren Buffet delves deep into topics such as the financial crisis, the concept of corporate governance, the housing bubble in the USA, Berkshire Hathaway’s acquisition of Burlington Northern Santa Fe, this book features investment advice from the top investors around the globe, Buffet’s views on the current financial recession, offers knowledge and idea of corporate governance scenario to investors.

This book provides unique knowledge about investing, finance, and leadership that can’t be found anywhere else. It not only provides, the soundest strategies and advice but also includes tips on how to run businesses keeping one’s moral values and objective of adding value to society.

The book is all about the value investing concept promoted by Warren Buffet. The author has compiled and elaborated what Warren Buffet has talked to Berkshire Hathaway shareholders over the years in annual general meetings. The book primarily discusses:

  1. Corporate Governance
  2. Mergers and acquisitions
  3. Accounting Principles
  4. Business Ownership

The book is what the title says about “the essays” and it gives an in-depth view of the investing philosophy of investing pioneer Warren Buffett. The author Cunningham has done a terrific job of organizing the topics in good order and readers can select chapters on his point of interest. This book also covers various financial shenanigans and makes it easier for the average investor to understand.

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5) Richest Man in Babylon by George Clason

The Babylons were the first to find the laws of prosperity. In this book, the author writes about the secrets of creating, growing, and preserving wealth. Clason uses merchants, traders in his books to tell about attracting good luck, choosing profitable investments, and protecting and creating a wealthy fortune.

This book is based on Babylonians. It has been hailed as the greatest book in the field of financial planning, wealth, and thriftiness. This book helps individuals to lead towards financial prosperity. It gives financial advice through a collection of ideologies set 4000 years ago in ancient Babylon.

This is regarded as the classic of personal financial advice. In this book, the readers shall find out about the seven remedies for a lean purse, the debate of good luck, and the five laws of gold.

The primary story of the book is how the one man rose to become the richest man in Babylon achieving a disciplined approach and preaching the same.  This man accumulated such mammoth wealth by spending, investing and working in the most disciplined fashion. Hence, this book is one of the most important books for personal finance.