Favorite Financial Books

[sethco]

So I admit over the past couple of years, I have become a little of a personal finance nerd. I guess I have to thank WCI and some of the older SDN posters because before then I was a clueless resident with no idea about investing, debt, assets, etc. They were all instrumental in my education, because I certainly wasn't taught anything about finances during medical school or residency (aside from a cursory 1 hour lecture at the end of residency). I was thinking of some of my favorite books that I have read over the past decade. Hopefully they can also help someone out there that is as clueless as I was back then. If anyone else has any recommendations that may help, please chime in as I am always now looking for a good book to read. Here are my 8 favorite (in no particular order)

1) Millionaire Next Door (Thomas Stanley): Probably the first personal finance behavior book I ever read and it is the book I recommend to start at. Not enough good things to say about it and has certainly stood the test of time.
2) The White Coat Investor (James Dahle): A Doctor's Guide to Personal Finance and Investing. Very quick read with lots of high yield info. Best read by premeds and medical students and the sooner the better
3) Random Walk Down Wall Street (Burton Malkiel): Loved the history portion of the book
4) The Automatic Millionaire (David Bach): Another behavior finance book that was very well written
5) Simple Path to Wealth (JL Collins): This might be another great book for one to begin their financial journey
6) The Overtaxed Investor (Phil Demuth): More advanced, but lots of helpful info in the book. Very funny and able to keep my attention despite the dry content
7) Retire Secure (James Lange): Another more advanced book, buts lots of helpful info regarding estate planning
8) Common Sense Investing (John Bogle): Written by John Bogle, founder of Vanguard and low cost Index funds. Not enough good things can be said about him and everything he has done for the individual investor. Very intuitive book that really nails home his point

Would love to hear if anyone has any to add

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[leaverus]

not really a book since it's available as a free pdf download (or can be purchased on amazon I think): If You Can, by William Bernstein

 

[deleted126335]

Anything written by William Bernstein, Rick Ferri and Larry Swedroe is worth reading

 

[abolt18]

not really a book since it's available as a free pdf download (or can be purchased on amazon I think): If You Can, by William Bernstein

Second this big-time.

 

[Dabears38]

That is a solid list of books! I would add two other resources that could be tackled in a weekend:

1) The Physician Philosopher's Guide to Personal Finance by James Turner - Perfect for the young trainee/attending looking for a simple guide to set themselves up nicely come mid-career. Plus any book with a forward by the WCI is probably a solid bet!

2) How to Think About Money by Jonathan Clements - Great read on behavioral finance. Although it is not specific to the medical field, it has a lot a great information that will have you rethink (in a good way) the "why" behind one's spending habits.

 

[okayplayer]

Great list so far. I'd add The Four Pillars of Investing by Bernstein (currently $2.99 on Kindle apparently. The best 2 bucks you will ever spend).

 

[deleted126335]

Great list so far. I'd add The Four Pillars of Investing by Bernstein (currently $2.99 on Kindle apparently. The best 2 bucks you will ever spend).

That one is my best recommendation for a beginner to read about financial markets. Not quite the same thing as personal finance.

 

[DM27]

Adding some I enjoy:

1) Devil Take the Hindmost: more of a book of cautionary tales of speculation, I enjoy history so I found it a good read due to this.

2) Anyone can be rich: a poorly titled, but short and interest book by a psychiatrist that goes into a lot of the mindset of how you can screw yourself when financial planning.

 

[deleted171991]

Great list so far. I'd add The Four Pillars of Investing by Bernstein (currently $2.99 on Kindle apparently. The best 2 bucks you will ever spend).

3, not 2.

 

[dchz]

Tl;DR:

-Keep your expenses low
-Keep your index funds cheap
-Keep the same strategy over a long term and don't look at the trends in the market
-Be disciplined enough to do all the above over 30 years.

 

[leaverus]

Tl;DR:

-Keep your expenses low
-Keep your index funds cheap
-Keep the same strategy over a long term and don't look at the trends in the market
-Be disciplined enough to do all the above over 30 years.

5) don't get married; or if you do, don't get divorced

 

[KK357]

The Intelligent Investor by Ben Graham

But WCI blog or book is probably the best place to start and has everything you need.

 

[pgg]

5) don't get married; or if you do, don't get divorced

0) spend less than you earn

 

[dhb]

0) spend less than you earn

So 0 negates 5

 

[d2305]

Blood in the Streets: Investment Profit in a World Gone Mad, Davidson/Mogg. I wish I would have bought more in 2008.

 

[Hamhock]

Amazon product

I know Jack Bogle was mentioned above, but I think this presentation of his ideas related to developing wealth through investing and lifestyle is best for the newbie.

HH

 

[BLADEMDA]

Tl;DR:

-Keep your expenses low
-Keep your index funds cheap
-Keep the same strategy over a long term and don't look at the trends in the market
-Be disciplined enough to do all the above over 30 years.

1. Expenses- keep them low. If you need financial advice hire a fee based adviser.
2. Index Funds- The evidence clearly suggests ETFs/Index Funds outperform 90% of all actively managed funds over a long period of time. I use a combo of Mutual Funds in my retirement accounts along with low cost ETFs in my taxable accounts. Overall, you should strive to keep the portfolio expenses below 0.5%.
3. Diversification- Never put all your eggs in one basket. This means diversified across all sectors, size of companies, domestic vs foreign, etc.
4. Allocation/Rebalance- This is extremely important for the performance of the portfolio.
5. Stay the Course/Stick to the plan
6. Read/Stay Informed

The Four Pillars of Investing: Lessons for Building a Winning Portfolio

All About Asset Allocation, Second Edition Paperback – July 12, 2010
by Richard Ferri (Author)

The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk Paperback


The White Coat Investor: A Doctor's Guide To Personal Finance And Investing

Rational Expectations: Asset Allocation for Investing Adults (Investing for Adults) (Volume 4)


The Only Guide to a Winning Investment Strategy You'll Ever Need: The Way Smart Money Invests Today

 

[Dabears38]

1. Expenses- keep them low. If you need financial advice hire a fee based adviser.
2. Index Funds- The evidence clearly suggests ETFs/Index Funds outperform 90% of all actively managed funds over a long period of time. I use a combo of Mutual Funds in my retirement accounts along with low cost ETFs in my taxable accounts. Overall, you should strive to keep the portfolio expenses below 0.5%.
3. Diversification- Never put all your eggs in one basket. This means diversified across all sectors, size of companies, domestic vs foreign, etc.
4. Allocation/Rebalance- This is extremely important for the performance of the portfolio.
5. Stay the Course/Stick to the plan
6. Read/Stay Informed

The Four Pillars of Investing: Lessons for Building a Winning Portfolio

All About Asset Allocation, Second Edition Paperback – July 12, 2010
by Richard Ferri (Author)

The Intelligent Asset Allocator: How to Build Your Portfolio to Maximize Returns and Minimize Risk Paperback


The White Coat Investor: A Doctor's Guide To Personal Finance And Investing

Rational Expectations: Asset Allocation for Investing Adults (Investing for Adults) (Volume 4)


The Only Guide to a Winning Investment Strategy You'll Ever Need: The Way Smart Money Invests Today

Great summary from Blade. I’ll have to check out that last book! The only thing I would tweak is “Fee-Only” advisors are generally a better bet than “Fee-Based”. Much greater transparency on what you are paying for without the inherent conflict of interest built into arrangements like Assests Under Management (AUM) models.

 

[<(^_^)>]

I would also say most people don’t really need an advisor. The pareto principle is in full effect with regard to investing. Buy a bunch of low cost whole-market index funds (like VTI)...and honestly you are fine.

Physicians get into trouble when they make investments into business ventures and start paying huge fees for “wealth management”.

If you limit your expenses and save 10k a month at 7% return and 2% inflation you will have 7-8M (in 2019 dollars) after 33 years. You don’t need to be buffett to get 7%.

 

[nimbus]

I would also say most people don’t really need an advisor. The pareto principle is in full effect with regard to investing. Buy a bunch of low cost whole-market index funds (like VTI)...and honestly you are fine.

Physicians get into trouble when they make investments into business ventures and start paying huge fees for “wealth management”.

If you limit your expenses and save 10k a month at 7% return and 2% inflation you will have 7-8M (in 2019 dollars) after 33 years. You don’t need to be buffett to get 7%.

Exactly. We earn enough that we can have a guaranteed retirement without resorting to crazy schemes. Saving is the most important part of the equation.

 

[Folken]

Necro-bump - I have a question about financial books that specifically teach/explain financial analysis.

I have already read through the WCI and Boglehead books. I plan to pick up some of the above books. But aside from following my 3-fund portfolio and the guidelines above, if I wanted to actively trade a small portion of my portfolio, how do I know that company X is a good buy? Is there a book that will walk you through what, for example, a P/E ratio is and how to apply it?

 

[deleted126335]

Efficient Frontier

 

[coffeebythelake]

@BLADEMDA Why mutual Funds for retirement accounts? What not just do sp500 or some other etf?

 

[sloh]

"If You Can" by William Bernstein

"Learning the basics of financial and market history. If learning about the theory and practice of finance is akin to studying aeronautics, then studying investing history is akin to reading aircraft accident reports-something every conscientious pilot does. The new investor is usually disoriented and confused by market turbulence and the economic crises that often cause it; this is because he or she does not realize that there's nothing really new under the investment sun. A quote often misattributed to Mark Twain has it that "History doesn't repeat itself, but it does rhyme." This fits finance to a tee. If you don't recognize the landscape, you will get lost. Contrariwise, there's nothing more reassuring than being able to say to yourself, "I've seen this movie before (or at least I've read the script), and I know how it ends."

 

[midazzoler]

What I Learned Losing A Million Dollars by Jim Paul