I saved $10,000 by investing my own money without an advisor. Here are the books that taught me how.
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- Investing my own money always seemed intimidating, even with advisors, because I couldn't understand the jargon.
- Below are 8 books I read to help me understand things like index funds, dividends, and how the stock market works, helping me save around $10,000 through investing without an advisor.
- Read more: 10 online courses, books, and podcasts that can help you get better at managing your money
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Since I was a teen, the stock market always seemed complex and full of uncertainty. Investing was never on my radar. That is, until my Chilean father encouragingly obligated me into opening an account with some of my savings when I was 23 years old. I abided, though my small form of resistance was to quickly bury my head in the sand. I didn't look at my account for several years because I was afraid of what I didn't understand.
When my dad passed away, I decided it was time to take control of my finances. Friends recommended me to their financial advisors, but after several meetings discussing my investing goals (and risk aversion), I left feeling uncomfortable and confused because I didn't understand the jargon.
I knew I needed to learn how the stock market worked before I could make any big decisions, advisor or not. I wanted to understand the different types of investments, such as individual shares, mutual funds, index funds, ETFs, and bonds, as well as the monetary difference between active and passive investing.
So I began to educate myself by reading as many books as possible over the last seven years. Over time, I noticed a consistency in the advice I kept coming across, which gave me more confidence in what I was doing. That's when I realized I was the best person to manage my own money and have been doing so on my own for the last several years. In total, I estimate that I saved around $10,000 from investing on my own instead of paying a financial advisor.
Here are the 8 books I read to learn how to invest without an advisor:
To get the lay of the investing land:
"Stock Market 101: From Bull and Bear Markets to Dividends, Shares, and Margins — Your Essential Guide to the Stock Market" by Michele Cagan
Investing can be intimidating and scary, but Michele Cagan simplifies everything with easy-to-comprehend examples. She breaks down how to invest in the stock market with hands-on lessons, making it great for novices. This guide helped me jump in and take charge of my portfolio without over-analyzing my investment decisions and goals. The author also dedicated time explaining how Wall Street works, making me less intimidated by the stock market in general.
To learn the essentials of accruing wealth:
"Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School" by Andrew Hallam
Part-memoir and part-how-to guide, this book dives into how Hallam created and managed a million-dollar investment portfolio on a teacher's salary. Following the rules he lays out, Hallam asserts that with knowledge, diligence, patience, and strategy, anyone can create an impressive investment account, regardless of their earnings. Having worked as an international teacher myself, his advice and perspective hit home, especially regarding the money-saving benefits of being a passive investor. He also breaks down the information in a clear way, with plenty of examples from his own life.
To understand recessions and low points better:
"A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing" by Burton G. Malkiel
Economist and financial advisor Burton Malkiel first published this book in 1973, which is now considered a classic among investors. Revised and updated numerous times to reflect current times and new investment opportunities, it's also full of history lessons explaining recessions, depressions, booms, and busts. The historical examples provide a broader context and have helped me be less reactive when the market fluctuates or goes down. Although it's geared towards anyone interested in investing, it can sometimes be theoretical and technical, but it's a comprehensive guide to what you need to know to get started — from different types of investment vehicles to the ins and outs of reading a stock chart.
To know everything you need to about index funds:
"The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns" by John C. Bogle
John Bogle, the founder of the Vanguard Group, is considered to be the first person to create an index fund. Now in its tenth edition and considered a must-read, this book highlights the importance of a diversified portfolio by investing in low-cost index funds and staying in the market for the long term. One of the main takeaways is that investors reduce their risk by not investing in individual stocks — instead, they invest in multiple companies in an index, which will get a better stock market return.
To break it down really simply:
"How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn" by Allan Roth
Financial planner Allan Roth teaches his eight-year-old son, Kevin, about how to invest in the stock market. The premise is that even a young child can grasp how the market works; investing doesn't have to be complicated. Written in a simple style with an array of examples, it showed me how to create a diverse portfolio and why it's important; how to minimize costs by opting for index funds instead of mutual funds; and how to build wealth over the long term.
To dive into dividends:
"Investing In Dividends For Dummies" by Lawrence Carrel
Investing in companies that offer dividends can be a great asset for creating a well-rounded portfolio since you'll gain returns while the stocks are in your account. Dividends provide earnings as long as you own the stocks, which means you don't have to wait to sell shares to reap the rewards. This book breaks down everything you need to know about dividends from what they are to how to research which companies offer them, as well as how they can complement your portfolio, depending on your short and long-term goals.
To glance at the future of investing:
"Street Smarts: Adventures on the Road and in the Markets" by Jim Rogers
Jim Rogers is considered a Wall Street legend and well-regarded investor. In his memoir, he shares his personal story of how he began his career, made his way to Wall Street, and helped run a hedge fund. Intertwining adventures in his personal and professional life, he provides a deeper perspective by incorporating plenty of American and global stock market history. This book made me more aware of why my view of the world often collides with how the market works; one takeaway is companies need to continually grow and expand to cater to their investors. He also offers several observations on the current state of affairs and where he believes things are headed, making for an interesting (and perhaps surprising) read.
To get a true insider’s account:
"Invested: Changing Forever the Way Americans Invest" by Charles Schwab
In this memoir by Charles Schwab, who founded the bank of the same name, he explains how he set out to create a space for all Americans to have access to investing in Wall Street, with a focus on offering the best customer service. With history and personal anecdotes weaved into the narrative, such as the dot-com bubble bursting to the housing market crash, Schwab explains how his team carefully navigated plenty of unexpected twists and turns. I enjoyed this book because it highlights how far personal investing in the stock market has come and how easy it now is for individuals to create and manage their own online account.
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