“Everybody is ignorant, only on different subjects.”
Will Rogers
The biggest obstacle to reaching financial independence is fear due to a lack of knowledge.
Grandparents teach their children who, in turn, teach their children. Thus, the habits of the past are passed to the future in an unbroken chain.
A huge gap in the knowledge concerns money – how to use it, how to save it, how to let it grow.
Many people do not understand the basic principles of financial discipline – spending less than they earn – nor the benefits of consistent savings over long periods.
Does your money control you? Or do you control your money? Being a successful investor does not require a genius IQ, but knowledge and confidence in yourself:
- Peter Lynch, a renowned fund manager, claimed, “”Twenty years in this business convinces me that any normal person using the customary three percent of the brain can pick stocks just as well, if not better, than the average Wall Street expert.”
- Warren Buffett, one of history’s most successful investors, attributed his financial success to knowledge (“Risk comes from not knowing what you’re doing.”) and discipline (“We don’t have to be smarter than the rest. We have to be more disciplined than the rest.”).
- John Bogle, the father of index investing, recommended, “Learn every day, but especially from the experiences of others. It’s cheaper.”
The following references are recommended for those who wish to learn more about savings and investing:
Table of Contents
Books
Print and audible books about investing are great educational sources about investment philosophies and techniques. (no affiliate links)
- The Millionaire Next Door. Directed to those just beginning their careers, this book explains the fundamentals of personal financing in simple, understandable terms.
- The Intelligent Investor. Written in 1949 by Benjamin Graham, Warren Buffett considers this “the best book about investing every written. Graham also authored Security Analysis, an excellent how-to introduction to company financial analysis.
- Common Stocks and Uncommon Profits. Peter Fisher champions analyzing companies to determine their growth potential.
- Psych Yourself Rich. Investment guru Farnoosh Torabi details how emotions affect personal finances and steps to take to make managing your money as stress-free and profitable as possible.
- Stocks for the Long Run. Graduate School Professor Jeremy Siegel explains why common stocks are safer and beat all other financial assets over the long term.
- Beating the Street. Peter Lynch, the Magellan Fund’s investment manager, explains his commonsense approach to selecting companies for investment.
- A Random Walk Down Wall Street. Economist Burton Malkiel proposed the controversial idea that experts cannot consistently outperform a random selection of company stocks.
- The Essays of Warren Buffett: Lessons for Corporate America. The Sage of Omaha explains his investment philosophy in a series of letters to Berkshire-Hathaway shareholders.
- How to Make Money in Stocks. Investor’s Business Daily founder William O’Neil introduces the CAN SLIM system of analysis identifying his key factors for picking companies for investment.
- Common Sense on Mutual Funds. John Bogle’s introduction of index fund investing changed the universe of investor thought about beating the market. Bogle also wrote The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
- Irrational Exuberance. Robert Shiller’s account details the influence of emotion and irrationality in the stock market.
- Extraordinary Popular Delusions. Published initially in 1841, Charles Mackey’s book about past manias such as Tulipmania in the 1600s is relevant today.
- The Alchemy of Finance. Hedge fund manager George Soros explains the innovative investment practices that made him a billionaire.
- Reducing the Risks of Black Swans. Authors Larry Swedroe and Kevin Grogan explain how to build a more efficient portfolio without significant increases in risk.
- Probable Outcomes. Founder of the investment research firm Crestmont Research, Ed Easterling explains how the use of charts and graphs can help identify irrational behavior in the stock market.
- Thinking Fast and Slow. Psychologist Daniel Kanneman explains his “two-brain” hypothesis and how they affect judgment and decision-making.
- The Total Money Makeover. TV’s favorite finance expert, Dave Ramsay, provides advice for the early years of investing, especially the reasons and methods to pay off personal debt.
- Warren Buffett invests Like a Girl. The popular online financial firm The Motley Fool discusses how investor temperament affects investment decisions.
- Your Money or Your Life. This New York Times Best Seller explains how to pay off debt, cultivate savings, and rearrange priorities.
Newspapers and Periodicals
Newspapers and periodicals provide the latest information that affect economies, industries, and companies.
Financial Websites
The following websites contain financial news, explanatory articles, and investment reports:
| CNN Markets | Pesobility | The Street |
| MarketWatch | Seeking Alpha | Bloomberg Markets |
| Forbes Money | Investopedia.com | Yahoo Finance |
| Morningstar |
Useful Government and Industry Websites
| American Association of Individual Investors |
| Association of Mutual Funds in India |
| Investor.gov |
| SEC.gov |