Top 5 books: financial intelligence all in one (Must read)

“A good book is a good friend” is a well-known proverb. This is an absolute truth when it comes to the financial realm. Although we have many books that deal with personal finance, investing strategies, and wealth, some books have the potential to create a larger and stronger impact on our minds.

Below are some such books, that can expand your thought process and make you think in a much broader perspective.

Here we go, starting with the book written by the famous investor of the 20^th century, Benjamin Graham. He is also called the “father of value investing” and also well known as “the guru” of Warren Buffet.

The Intelligent Investor – Benjamin Graham

In this book, Benjamin Graham tries to explain the fundamentals along with the core principles of investing such as,

• What is a Stock?
• Market swing between pessimists and optimists
• Investment vs Speculation
• Financial Intelligence and discipline while investing
• What is the Margin of Safety? And Unavoidable risks?
• Passive and Aggressive Investor
• What is Rule of 72?

So in summary, it tries to explain why discipline is important while investing, how the knowledge on stock fundamentals can help before picking a stock, how to protect the principal with a margin of safety, and being cautionary about the unavoidable risks, etc. Overall the book is a must-read for those who wanted to make wiser financial decisions.

Beating the Street – Peter Lynch

Peter Lynch is one of the most successful American investor and a well-known mutual fund manager. He tries to explain the advantage that a DIY investor has, compared to a mutual fund manager who is constrained by the business factors.

He also explains in the book, about risks of investing without knowing enough about the investment avenues and suggests knowing more about the company fundamentals. Also, he warns about betting in stocks which are losers i.e., trying to recover the loss from a falling stock.

He shares the principles like Rule of Five and gives an idea about Utility stocks, growth stocks, index stock funds, diversification at stock level – value stocks, high yielding, cyclical stocks, etc.  Overall it’s a good book to know about various types of stocks along with good investing intelligence.

The Millionaire Next Door – Thomas Stanley

Thomas J Stanley wrote this New York Times bestseller. He is the author and co-author of several award-winning books. He explains various principles of investing via attributes like,

• Frugality
• Charity
• Under Achievers of Wealth vs Prodigious Accumulators of Wealth
• Meticulous Budgeting
• Networth

He suggests not to be a “Big Hat no Cattle” person i.e., spending just to appear wealthy which would not yield anything but destroys wealth and peace of mind. He prefers to be a Low-income high net-worth person rather than being a high-income low net-worth person.

Rich Dad Poor Dad – Robert Kiyosaki

Robert Kiyosaki is an American Businessman and author of some of the bestselling books. He says lack of money is the root of all evil. Also, he explains that money as a discipline must be taught at home and schools as well.

Understanding about assets and liability, gaining financial intelligence, cashflow patterns of wealthy people is important according to him.

Further minding our own business, keeping it simple and stupid, taxation, Financial IQ are a few worthy ideas he explores. Emotional intelligence is to be worked upon while dealing with negative aspects like fear, cynicism, laziness arrogance, etc.

Also making habits like paying yourself first would help us in achieving financial independence early, he advocates.

Think and Grow Rich – Napolean Hill

Napolean Hill was an American self-help author. He explores the idea of the desire to earn money and invest. Proposes having a plan with date time and clear cut goals would help in improving wealth.

He explores the idea of backing desire with faith. According to him, the irrational part of our thinking like desire, faith, prayer, etc has got much to do with our ability to invest better and improving wealth.

Below are a few lines that I found in this book that are worth considering.

I bargained with Life for a penny,
And Life would pay no more,
However I begged at evening,
When I counted my scanty store

For Life is a just Employer,
he gives you what you ask,
But once you have set the wages,
Why, you must bear the task

I worked for a menial’s hire,
Only to learn, dismayed,
That any wage I had asked of life,
Life would have willingly paid

To summarize, It is what you ask for, that life will pay you willingly. And the first step should come from you.

Conclusion

So Think, Learn, Invest, and Grow. In this process, the above-mentioned books can aid you, starting from improving your thought process to expanding your horizon, and finally towards making better financial decisions. Happy Reading…!!!