Bookshelf

In this book, I explain some essential financial rules that should be taught in schools… but aren’t

Millionaire Teacher espouses the same investment philosophy as the books below, but there’s a significant difference:

it explains how investment theory was actually put into practice. Just three weeks after being released, it ranked number 2 on Amazon’s hottest new personal finance books.

By November 2011, it was the #1 ranked Personal Finance book on Amazon. I think you’ll like it.

In an easy-to-read conversational voice, financial planner Bill Schultheis proves why he’s considered one of the heroes of the financial service industry.

Promoting a low cost, index fund solution to investing, he guides his readers as if he’s your affable neighbour, explaining the process over coffee.

I’ve gifted many copies of this book at my index fund seminars. You’ll like this book.

Paul Farrell ably introduces this book as something his wife encouraged him to write.

As a women “whose eyes usually glaze over” when he starts to talk finance, you get the idea, right away, that Dr. Farrell’s book is aimed at a broad audience, peppered with a fun writing style that’s missing in the vast majority of personal finance books.

His message is the same as Bill Schultheis’ but his voice is a tad cheekier.

This could be the first and only investment book you’ll ever have to read.

Cheekier still, but every bit as good, is Daniel Solin’s book, The Smartest Investment Book You’ll Ever Read.

This immodestly titled book is comprised of only 192 pages, and this leading securities arbitration lawyer guides readers to see that again, index fund investing gives the highest statistical chances of success.

With a spacious format, it’s another book you can read in an afternoon while learning how the industry of actively managed mutual fund investing is rigged against the average investor.

Like The Lazy Person’s Guide to Investing and The Coffeehouse Investor, it’s going to make you smile from time to time, if you don’t chuckle out loud.

Perhaps the shortest book of them all, The Elements of Investing was written by investment legends Burton Malkiel and Charles Ellis.

As the bestselling authors of A Random Walk Down Wall Street (Malkiel) and Winning the Loser’s Game (Ellis) they’ve teamed together to produce an investment book that’s far simpler to understand than either of their former masterpieces.

From what I’ve learned, giving financial seminars, the average person has difficulty understanding terms and jargon that most financial writers take for granted.

As great as both of these gentlemen’s other books are, this one is far easier for the average reader to understand.

I bought this book as a gift, initially, but then I had to buy two. I simply couldn’t give the original book away and be left without a copy myself. It’s a fabulous read for new investors. The author, Allan S. Roth, does his readers a wonderful service.

Burton Malkiel's A Random Walk Down Wall Street is now in its 12th edition. To my knowledge, Dr. Malkiel's first edition was the world's first book on index fund investing. He wrote it even before Vanguard's John Bogle created the world's first index fund! And this book just keeps getting better. All investors should read it.  

I enjoyed Larry Swedroe’s book, The Only Guide to a Winning Investment Strategy You’ll Ever Need and as the title suggests, I think he’s right, although it’s slightly more academic than the previous four books I mentioned.

After reading one of the four books I listed above, if you’re still not convinced, and/or you want more meat, then this could be the book for you.

Written in 2005, it has the qualities of a great book—because it’s timeless. Read this book twenty years from now, and the theory behind it will remain the same: solid, academically rigorous, relevant and accessible to the average reader.

Swedroe’s new book, The Quest For Alpha: The Holy Grail of Investing is a fabulously convincing read.

If you’re still not convinced that index funds offer much higher statistical chances of success, compared to the expensive products peddled by most financial advisors, then this book will very likely change your mind.

Written by a man named by Fortune Magazine as one of the four investment giants of the 20th century, Bogle packs a powerful punch with this little 304 page book.

Showing how index funds are superior investment vehicles, he loads the book with evidence and experience drawn from more than 50 years in the investment field.

I’ve gifted more than 40 copies of this little book to my colleagues, but I’ve listed it under “intermediate” as a reader, because it has terms that many of my college educated colleagues couldn’t understand, and it had my dad (a fairly well-read fella) running for the dictionary a number of times.

Bogle is an academic. But he’s brilliant, a clear writer, and he’s definitely fighting for the little guy.

Written by the legendary finance writer, William Bernstein, this book gives an extremely solid investment foundation.

If we were to ask Mr. Bernstein himself, he’d probably suggest that we read The Four Pillars of Investing first, and The Investor’s Manifesto second.

In the first book, he thoroughly discusses how people madly become euphoric when fad-like investments rise in value without solid fundamentals to back them up.

In The Investor’s Manifesto, Bernstein shows how the same emotional madness can sabotage investor’s accounts when the markets drop in value. What’s more, he does it with an ever-improving flair for imagery and humor:

“Your primary training tool is the rebalancing process, which forces you to sell high in the good years and to buy low when there is blood in the streets. In the really bad years, such as 2008-2009, this will mean pouring large amounts into falling equities, when your friends and family are running around like decapitated poultry.”

Both of his books, of course, promote indexed investing as well.

Probably best for intermediate investors, this book assumes somes basic financial knowledge.

But it’s an impressive read by a couple of millionaire senior citizens who are leaving a useful legacy.

For the most extensively researched books on indexed investing, nothing really compares with John Bogle’s updated 10th anniversary edition of Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor.

What’s interesting is that David Swensen, Yale University’s endowment fund manager, didn’t intend to write his book, Unconventional Success, about indexed investing.

But the more he researched, the more he realized that the financial service industry exploited individual investors. His book offers a fabulous solution to that problem.

For advanced investment readers, The Essays of Warren Buffett is a compilation of essays written by the Oracle of Omaha and arranged by Lawrence Cunningham.

If you want to know how the great Berkshire Hathaway chairman thinks, Cunningham has arranged Buffett’s essays beautifully.

The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. Graham’s philosophy of “value investing” — which shields investors from substantial error and teaches them to develop long-term strategies — has made The Intelligent Investor the stock market bible ever since its original publication in 1949.