Investing is the best way to build wealth over time. But how much you invest depends on your budget and time frame.
Decide what your investing goals are – like buying a house, funding retirement or saving for tuition. Setting these clear goals can help you determine how aggressively to invest and when.
1. One Up on Wall Street: The Secrets to Investing Like a Pro by Peter Lynch
This book, written by the manager of Fidelity’s world-beating Magellan Fund, is considered a classic and is full of practical advice. Lynch takes the approach that anyone can be successful in picking stocks if they have the right methods and temperament. Investment success does not come from an expensive education or an IQ, but rather from dedication and persistence. Lynch emphasizes a hands-on approach to the stock market and recommends that investors take a long-term view when investing.
Lynch discusses the advantages that average investors have over professional investors and shows how to use these advantages to achieve real returns. He suggests avoiding overpaying for stocks and finding companies that are growing their earnings, not just paying dividends. He also encourages investors to be aware of their immediate business environment and the businesses around them, which may present investment opportunities. By doing so, they can find companies before professionals do, a process that is often the source of “tenbagger” stocks (stocks that rise in value ten-fold or more).
Another aspect of this book that is important to Lynch is that it encourages investors to invest in companies that are easy to understand and avoid complicated enterprises and uncharted industries. This is especially important for new investors who can be easily discouraged by complex financial terms and unfamiliar concepts. He also encourages investors to focus on a strong management team, as this can help to make a company more profitable.
One Up on Wall Street is a must-read for all investors, whether new or experienced. Its timeless advice has made it a number-one bestseller and a valuable resource for both beginner and advanced investors.
2. Investing in Your Future: A Step-by-Step Guide to Financial Planning by Christine Benz
Investing can be the key to building wealth and meeting your financial goals. But it’s important to make a plan before investing. This book from Morningstar’s personal finance expert Christine Benz helps you get your financial house in order. She outlines tools and strategies to help you set financial goals, organize your documents, and develop a budget and budgeting system. She also explains how to match investments with your goals, using time-tested strategies and Morningstar insights.
Creating an investment plan is crucial, whether you are just starting out, mid-career or nearing retirement. Benz helps you determine your goals and how much risk you’re comfortable taking, as well as the types of accounts you should open. She recommends that you create a list of investment opportunities and their target prices so that, when the opportunity arises, you have a ready-to-go strategy for evaluating it.
Saving money is an essential part of your financial planning, but once you’ve wrangled the budget to pay your rent and utilities, paid down debt, and stashed away a few months worth of living expenses in your emergency savings account, you’ll want to think about investing. But figuring out how to do that can feel overwhelming. This book walks you through the process step by step, explaining how to evaluate and compare options and use your resources wisely.
Getting started with investing doesn’t have to be hard. Having the right advisor is a big part of making it easier to build and manage your portfolio. SmartAsset’s free tool matches you with local investment professionals who can create a personalized investment plan that fits your goals.
3. Investing in Your Future: A Step-by-Step Guide to Financial Planning for Women by Lynnette Khalfani-Cox
Investing can feel overwhelming to people who are new to the field. However, a key to starting on the right foot is being clear about your goals. Ask yourself why you want to invest your hard-earned money. Whether it’s to build wealth, prepare for retirement or pay for college, being clear about your reasons can help you navigate the many investment options available.
Once you’ve nailed down your investing goals, it’s time to consider how much risk you’re comfortable taking. There are a number of ways to reduce your risk, including diversifying your investments, holding low-cost index funds and sticking with the buy-and-hold strategy popularized by Hollywood. You can also consider seeking expert guidance by working with a financial advisor. SmartAsset’s free tool can connect you with local advisors who could help you build a plan that fits your financial goals.
Stocks are a common way for people to invest their money and earn a profit. Shares of a publicly-traded company represent partial ownership, or equity, in the business, and investors hope that the shares will increase in value over the course of their ownership. Investors can purchase individual stocks online through an investment account or through mutual fund companies, which hold many different stocks within one investment.
While stocks are a great way to build your wealth over time, they can also be volatile and can lose value in some market conditions. To mitigate volatility, seasoned investors create a portfolio of assets that balances out the risk. This often includes a mix of stocks, bonds and mutual funds, and can include alternative investments such as real estate and private equity. Investing in Your Future offers an easy-to-follow guide to creating and managing a sound investment strategy.
4. The Little Book of Big Investing: How to Make Your Money Work for You
This investment book offers a simple strategy for making your money work for you, even in a tough market. John Bogle, who is often called the conscience of the mutual fund industry and creator of the first index fund, explains that investing is not about speculation, but rather about creating wealth. Bogle recommends a diversified portfolio of low-cost index funds and rebalancing the fund once per year to keep your asset allocation on track.
While a few investment managers may have great track records, many are better at collecting high fees than generating high returns. Bogle argues that this means investors should be careful when selecting advisors and be wary of any advisor who tries to sell you something other than an investment portfolio.
Bogle also warns against following the latest fads in the investing industry, such as exchange traded funds (ETFs) and other stock-picking strategies. He emphasizes the importance of keeping costs as low as possible, which can significantly improve your portfolio’s return on investment.
How to Make Your Money Work for You also explains the basics of investing and outlines how to create a portfolio of stocks, bonds, and cash. It also provides tips on how to find the best stocks and how to choose between different types of stocks, such as large-cap, mid-cap, and small-cap stocks.
In addition, this investment guide discusses the importance of determining how much risk you are comfortable taking on your investments. This is determined by a number of factors, such as how long you have before retirement and your age. For example, someone in their thirties can usually handle more risk than a person in their fifties.
For anyone who wants to get ahead in the stock market, this is a must-read book. Its timeless lessons will help you invest like a pro and build wealth for your future. It is available in hardcover and paperback on Amazon, as well as in a variety of other online stores. For more information, check out the book’s website here. *Forbes may receive a portion of sales from books purchased through links on this page.