I’m a college student with a few thousand in savings. I’m thinking of buying some stock with it among other things. It’s not all that much and I don’t want to put much thought and time into it, but I’d also like to learn about investment in general in the long run. Can anyone recommend a good general book to start with?
The first that comes up is Investing for Dummies. I assure you that I am in fact quite intelligent, so I’m not sure if that’s what I want. I am new to the subject but I don’t want something written for morons.
When I was just about to graduate, a middle aged attorney gave me three books that he wished someone had given to him before he graduated from school. Those books turned out to be great. They were:
The Millionaire Next Door – a book on the importance of saving and conserving money, pointing out that the vast majority of millionaires are ordinary people who have saved their money rather than spent it. Thus, most millionaires drive cars that are 5+ years old. (Moral – you don’t need all those shiny trinkets.)
The Motley Fool’s You Have More Than You Think – another book about the importance of saving money, this time focusing more on the wonders of compound interest. (Moral – pay off your credit card debt and then invest in the stock market.)
The Motley Fool Investment Guide – a simple guide to investing for everyday people, focusing on a few simple rules. The rules I remember are: 1) compound interest is really sweet; 2) the stock market has a pretty good rate of return; 3) mutual funds are ok, but why pay someone else to do it?; 4) invest in what you know; and 5) invest for the long term (5 years or more).
Obviously, the 3rd book is more what you’re looking for. And it might be helpful to know that the Motley Fool has a website where they offer investing advice and tutorials for beginners. I’d start there. And if you just don’t like the Motley Fool, they base their advice largely on the investing philosophy of Peter Lynch (one of the most successful mutual fund managers ever), who’s also written a number of books.
Hope that helps. And if you’ve got thousands of dollars in savings and you’re still in college, then congrats. You’ve not only got a wonderful start on retirement, you’re much smarter than most college students.
Well, I’m surprised it hasn’t come up already but Buffett would be a good choice for this. It is, as the title suggests, a biography of super investor Warren Buffett. Beyond being informative and entertaining, it gives a good explanation of his philosophy of value investing. Value investing is something that can be used to great effect at any time.
As a college student, pay off that credit card debt if you have it and then never again in your life rack up credit card interest. When you graduate from college, don’t run out and finance a new car. Drive the beater car and then pay cash for a new one.
Check out no load mutual funds.
If you must punt on no name crappy stocks, limit it to a % of your portfolio. Otherwise, buy good well run companies - sooner or later the market usually recognizes their value and the stock price goes up.
I’ve found “The Only Investment Guide You’ll Ever Need” by Andrew Tobias (http://www.andrewtobias.com/books.html) very, very useful. Easy to read & understand, and very well suited for the average person.