Happy 2021, everyone! Hope your new year is off to a sparkling start. I read 30-45 minutes/day and always get inundated with questions on what books/articles that I recommend.
Shortlisted the books I have read and like/love to a varying degree but they are definitely the right list for you to conquer in 2021. There are a lot of great books out there, these are the ones I personally enjoyed in 2020 and is fairly suitable for most people. I have a lot more so this list is definitely not exhaustive. For each book, I include a short description of what the book is about, positive and negative points and who the book is suitable for.
Will also be writing a finance & investment book review every month. So, stay tuned for that!
(Pssst: I’m the annoying person who keeps asking others to recommend good books to me. I’m also the uncool gifter who don’t buy you fancy gifts but always books. If you enjoyed this post, you can also send me .)
TOP PERSONAL FINANCE, MONEY & INVESTMENT BOOKS TO READ IN 2021
Get your money mindset right. Understand the financial markets and investment frameworks and theories. Then, find suitable investments (stocks) with the best-in-class investment criteria and framework.
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MINDSET
– Psychology of Money
– The Millionaire Next Door: The Surprising Secrets of America’s Wealthy
– The Simple Path to Wealth: Your road map to financial independence and a rich, free life -
INTRODUCTION TO FINANCE & INVESTING
– The Intelligent Investor
– A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing -
INVESTING YOUR MONEY
– 100 Baggers: Stocks That Return 100-to-1 and How To Find Them
– Vision Investing: How We Beat Wall Street & You Can, Too! -
ANNA’S TOP RECOMMENDATIONS: WHICH 4 BOOKS SHOULD YOU GET?
I believe most of you reading this will jump to this section at the end… but I implore you to read everything I have written and decide which books are suitable for you.
MINDSET
Why do I start with this? After investing for 15 years now, from the first time I ran to an ATM to get an IPO allocation during my internship break, I have made a lot of mistakes and debilitating losses. I have moped around, whining away and loathing myself. Seriously though, people always brandish their winnings but not their losses. People always talk about their winning stocks and how much they’ve made… but no one talks about the losses.
Also, can I highlight that it doesn’t matter if you have 20 winning stocks, sometimes one bad one is enough to derail you? I have no interest to share how much money I have made or my profits… because there are periods when you win, and periods when you lose. The point remains… you have to be equipped with the right mindset and mentality to be an investor.
Let me emphasise that: In managing and investing your money, your psychology and mindset are paramount in determining your success.
I can go on what are the correct ways to think or behave (such as, don’t be bored, stop buying or selling to get some ‘action’) but that’s not the point of this post. 🙂
Here are the 4 books I recommend you to start so you have the right way to think about wealth.
– Psychology of Money
“Doing well with money isn’t necessarily about what you know. It’s about how you behave. And behaviour is hard to teach, even to really smart people.
Money―investing, personal finance, and business decisions―is typically taught as a math-based field, where data and formulas tell us exactly what to do. But in the real world, people don’t make financial decisions on a spreadsheet. They make them at the dinner table, or in a meeting room, where personal history, your own unique view of the world, ego, pride, marketing, and odd incentives are scrambled together.
In The Psychology of Money, award-winning author Morgan Housel shares 19 short stories exploring the strange ways people think about money and teaches you how to make better sense of one of life’s most important topics.”
Positive: I bought 50 of this book and gave them out as Christmas presents. Personally, I like the way it encapsulates a lot of personal finance concepts and how one should think about money and wealth. It tells you how you shouldn’t be a fool with your gold. “Morgan has crafted an incredibly relevant, enjoyable, and helpful book about the interplay between money and emotion, and how we all are affected by both. He tells an important story about the stories we tell; offering Kipling-esque advice about imposters like luck and skill, winning and losing, and of course, triumph and disaster.”
“It’s one of the best and most original finance books in years.” — Jason Zweig, The Wall Street Journal
“The Psychology of Money is bursting with interesting ideas and practical takeaways. Quite simply, it is essential reading for anyone interested in being better with money. Everyone should own a copy.” — James Clear, Author, million-copy bestseller, Atomic Habits
Negative: What makes this book different? In some ways, absolutely nothing. It offers the same “advice” as most other books but it’s packaged in a nicer, well-written book. Contains cliched platitudes but … which book doesn’t?
Who is this for: A good starter book for those embarking on their wealth journey. No matter where you are in your journey, I think this book is a good way to think about money. (Unless you are a gazillionaire then clearly, the way you think of money is/can be different.)
– The Millionaire Next Door: The Surprising Secrets of America’s Wealthy
The bestselling The Millionaire Next Door identifies seven common traits that show up again and again among those who have accumulated wealth. Most of the truly wealthy in this country don’t live in Beverly Hills or on Park Avenue-they live next door. This new edition, the first since 1998, includes a new foreword for the twenty-first century by Dr. Thomas J. Stanley.
The book is divided into eight chapters:
1. Meet the Millionaire Next Door
2. Frugal Frugal Frugal
3. Time, Energy, and Money
4. You Aren’t What You Drive
5. Economic Outpatient Care
6. Affirmative Action, Family Style
7. Find Your Niche
8. Jobs: Millionaire vs. Heirs
The author essentially splits everyone into two categories: Underaccumulators of Wealth (UAWs) and Prodigious Accumulators of Wealth (PAWs). UAWs have a low net worth relative to income, and the opposite for PAWs and uses these terms throughout the book.
The book contains interesting conclusions about the countless Americans leading unglamorous lives while accumulating appreciable amounts of wealth
Positive: A long stream of curated data distilled into a finely tuned narrative that anyone will benefit from.
Negative: Hate the “clickbaity” title. Too simple for those who have already developed some discipline and are looking for detailed strategies and advice on personal finance and building wealth via investments and generating passive income.
Who is this for: An interesting overview of some good financial habits, or as an eye-opener for those with luxurious financial tendencies who struggle to save money despite their income level.
– The Simple Path to Wealth: Your road map to financial independence and a rich, free life
“In the dark, bewildering, trap-infested jungle of misinformation and opaque riddles that is the world of investment, JL Collins is the fatherly wizard on the side of the path, offering a simple map, warm words of encouragement and the tools to forge your way through with confidence. You’ll never find a wiser advisor with a bigger heart.”
“The Simple Path to Wealth’s basic message to beginners is well-known in the Do It Yourself (DIY) and ESPECIALLY for the Youthful Financial Independence (aka FI and FIRE Financial Independence Retire Early) community.
• think long-term
• live below your means
• plan ahead with a fully diversified portfolio (except international stocks, more on this below)
• invest in Vanguards low-cost index funds ”
One reviewer said, ” After reading this book, I understand the difference between stocks and bonds (and what proportion of each are appropriate at each financial stage of my life). know what an index fund is (and why they’re superior to picking my own stocks). I finally understand what “timing the market” means and why it’s a bad idea. I know why Vanguard’s VTSAX and its low expense ratio are the best choice. I understand the math behind 8% interest and 4% safe withdrawal rates. These were all terms that I’d vaguely heard of before but now I actually understand and have put into use. My husband and I switched around our allocations (and rolled over some old accounts into Vanguard) and we literally gained a few thousand dollars in interest overnight. ”
Positive: Collins stuck with Jack Bogle’s theories and I am a big fan of Jack Bogle. The book is written in a assuring voice, almost like a wise uncle wrote it. It also focuses on a simple investment strategy. He also provides clear, pithy advice on how to live, such as “Avoid debt”.
Negative: It lacks .. variety in advice. This is for people who don’t want to do their research and don’t trust themselves to stock pick. I am not saying one of the other is better. Both works. It’s slightly monotone in its message of “In the long run you can’t beat the market so don’t even try”. We can’t all be Warren Buffett but we can all try to choose and understand and analyse better – you just have to be willing to put in the efforts and hours.
Who is this for: Perfect for beginners, and some seasoned investors who are sick and tired of searching for that short-term investment miracle.
INTRODUCTION TO FINANCE & INVESTING
– The Intelligent Investor
A classic that I have read thrice since the first time I bought it when I was 20. In case you are unaware, Benjamin Graham is Warren Buffett’s mentor.
“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.
Over the years, market developments have proven the wisdom of Graham’s strategies. While preserving the integrity of Graham’s original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today’s market, draws parallels between Graham’s examples and today’s financial headlines, and gives readers a more thorough understanding of how to apply Graham’s principles.
Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals.”
Positive: It is written by one of the biggest investment geniuses of all time. The investment fundamentals outlined in this book are classic knowledge that textbooks print. It is also the “Bible” for value investors.
Negative: The concepts might be outdated, despite the updates. Most of the examples, charts, graphs and illustrations were limited to industrial, brick & mortar businesses of the ’60s and ’70s. It doesn’t factor in technology business which is valued in an entirely different way. It’s an entirely different world and an investment mindset today.
Who is this for: Value investing diehards. Finance buffs and lovers. I still personally feel that it’s a must-read. A bit dry though.
– A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing
A Best Book For Investors Pick by the Wall Street Journal’s “Weekend Investor”
Whether you’re considering your first 401k contribution, contemplating retirement, or anywhere in between, A Random Walk Down Wall Street is the best investment guide money can buy. In this new edition, Burton G. Malkiel shares authoritative insights spanning the full range of investment opportunities―including valuable new material on cryptocurrencies like bitcoin, and “tax-loss harvesting”―to help you chart a calm course through the turbulent waters of today’s financial markets.
“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.” ― New York Times
Also, can I highlight the author: Burton G. Malkiel is the Chemical Bank Chairman’s Professor of Economics Emeritus at Princeton University. He is a former member of the Council of Economic Advisers, dean of the Yale School of Management, and has served on the boards of several major corporations, including Vanguard and Prudential Financial. He is the chief investment officer of Wealthfront.
Positive: Burton Malkiel gives a very broad overview of how our securities markets are structured, how they operate, and how we interact with them. This includes a history lesson in bubbles, booms, busts, depressions, recessions, and rallies from the Tulip craze to today’s time. Malkiel covers everything from stocks to bonds to mutual funds and more.
For a Finance geek like me, I lapped it up the first time I read it.
Negative: There is a lot of information and can be dry for those of you who are non-finance lovers. Some of the information can be too technical.
Who is this for: Overall a good introduction to the world of Finance. It’s like Finance 101 – perfect for building fundamentals understanding about investment. 🙂
INVESTING YOUR MONEY
– 100 Baggers: Stocks That Return 100-to-1 and How To Find Them
“This book is about 100-baggers. These are stocks that return $100 for every $1 invested. That means a $10,000 investment turns into $1 million. Chris Mayer can help you find them. It sounds like an outrageous quest with a wildly improbable chance of success. But when Mayer studied 100-baggers of the past, definite patterns emerged. In 100-Baggers, you will learn the key characteristics of 100-baggers why anybody can do this. It is truly an everyman s approach. You don t need an MBA or a finance degree. Some basic financial concepts are all you need a number of crutches or techniques that can help you get more out of your stocks and investing. The emphasis is always on the practical, so there are many stories and anecdotes to help illustrate important points. You should read this book if you want to get more out of your stocks. Even if you never get a 100-bagger, this book will help you turn up big winners and keep you away from losers and sleepy stocks that go nowhere.”
Positive: The author demystifies the concept of 100 baggers and systematically explains the thought process needed to identify and pick them. The final summary chapter and the list of the all the 100 Baggers in the appendix are very eye-opening. It gives histories of stocks that increased 25, 50, 100 and more times in less than 40 years.
Negative: It’s not a very well-written book. More of a straight-talking textbook writing. Doesn’t give much information on HOW to achieve those returns.
Who is this for: One of those books that totally changes the way you look at investing. Helps to sharpen my thought on what to look for when looking for future growth equities. It completely changed the way I think about investing. I used to trade and think it’s the best way to make quick returns. I am completely different now.
– Vision Investing: How We Beat Wall Street & You Can, Too!
What are your beliefs for investing, or what would you like it to be? Are your beliefs empowering or disempowering? Have you made or lost money?
Investing in the stock market presents a myriad of opportunities to build and store lasting wealth. In fact, a 2019 study found that stocks have decisively outpaced bonds and cash, making them the most profitable investment over the last 120 years.
However, you don’t need to empty your entire savings account just so you can invest in high-fee unit trusts, or complex hedge funds, nor do you absolutely have to hire a Wall Street professional to do your investing for you.
Truth be told, you don’t need an advanced degree in finance to make it big in the stock market. All you need is to give yourself adequate time, cultivate the right mindset.
- Quickly learn why long-term investments provide better, more rewarding yields than short-term trades
- Make full use of your advantages as an individual investor and gain an edge over Wall Street and finance professionals using evidence-based strategies
- Pick winning, values-centred companies to invest in within your own industry without the need to hire a professional
Disclosure – A university friend of mine, Eugene Ng, is the author of this book. While we knew each other in University, we were never close. We reconnected as I wanted to read the book. We met for coffee and learnt more about Eugene’s motivation and inspiration for the book.
My review and personal thoughts for the books are all honest and factual. 🙂
Positive: There is A LOT of information and research in this book. The first 1/2 of the book is full of graphs to drive home the author’s points. If you are a visual person and get bored by financial concepts, the graphs are great visual representations to understand the point. The book is fairly well-written and the points well made. There is a summary in every chapter for you to commit to an action plan or a thought-process. This book aims to bring best-in-class knowledge to investors, even novice ones. It provides very actionable formulas and steps.
The concepts are illustrated with clear examples and it teaches the readers on how to identify, research and think about businesses and stocks.
WARNING: The book comes with a lot of formulas. Good and important ones but if this is not your kinda thing, …. you’ve been warned!
Negative: Information overload and it can be dry at times. I am a fast and avid reader and I am well-trained in reading Finance books but even I took a long time with the book. It was arduous. To be fair to Eugene, you need to be in a clear state of mind and zone. I was reading this through the festive season and celebrations.
Who is this for: Vision Investing is great for those who are willing to put in the hours and work to acquaint yourself with the best-in-class strategies and thought-process in building a portfolio. Honestly, a newbie in Finance might get overwhelmed but this is great if you have a basic knowledge and want to build on it.
The advice is not particularly different or novel. If you subscribe to Motley Fool, you will get a lot of the same advice. But hey, Eugene’s book is at a fraction of the costs so… I do think it’s worth buying. 🙂
ANNA’S TOP RECOMMENDATIONS: WHICH 3 BOOKS SHOULD YOU GET?
If you have to choose 4 books to kickstart your personal finance journey, here are my 3 recommendations:
– Psychology of Money
– A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing
– 100 Baggers: Stocks That Return 100-to-1 and How To Find Them
– Vision Investing: How We Beat Wall Street & You Can, Too!
Reason: Get your money mindset right. Understand the financial markets and investment frameworks and theories. Then, find suitable investments (stocks) with the best-in-class investment criteria and framework.