If you were to ask most people if they wanted to become a millionaire, the majority of them would respond, “YES!”
For many years I struggled to jump into the stock market and start investing. I was extremely timid with investing my money in something that I didn’t understand.
You might be thinking, “Just pay a financial advisor to invest your money for you.”
Sure, you can pay a financial advisor to invest your money for you, but I’ve always felt uncomfortable with trusting someone else with my hard earned money. However, there are some fantastic financial advisors who can help you if you don’t feel like learning to invest on your own…it’s just not the route I chose.
Rather than paying a financial advisor to invest my money, I decided to read up the stock market and learn how to invest my own money. After reading many books on investing I came up with two that are my absolute favorites that I believe everyone should read.
Whether you are thinking of starting to invest, new to investing, or are already using a financial advisor, once you read these two books you will have the knowledge to start investing and you will be on the path to becoming a millionaire…
This is a must read for anyone and everyone who is looking to invest in the stock market. This book is fantastic. It’s short and simple, but it explains so much about investing and the stock market.
Alexander Green is a big believer in investing your own money. He also believes that no one cares more about your money than you do. Green covers the importance of saving money because without saving your money your can’t invest. He discusses the history of the stock market and how history repeats itself.
One of the best parts about the book is that he explains that no one can predict the future of the stock market. The truth is that no one, not even financial experts, know what the stock market is going to do. Everyone is just making educated guesses!
Green goes on to explain how to invest and diversify your own money into index funds using companies like Vanguard. He talks about the benefits of index funds, how to allocate your money, and how to rebalance your investment portfolio every year.
The author even gives you the breakdown of an exact portfolio of how you should invest your own money using Vanguard. The portfolio is appropriately called the Gone Fishing Portfolio and has beaten the S&P 500 every year. Here is the performance of the Gone Fishin’ Portfolio over the years…
Since its inception, The Gone Fishin’ Portfolio has compounded at 17.3% a year! Not bad, huh?
This is another amazing book that is a simple and quick read. The book is based on sound and concrete financial concepts to help people learn about investing and start saving money.
David Bach has done a great job explaining how to live frugally, save money, and eliminate debt. This book became very well known for the author’s concept for the “latte factor”. The “latte factor” basically sates that if you purchase a latte a day you’re probably spending…
- $3.50 a day
- $105.00 a month
- $1250.00 a year
- $12,600 in ten years
The author’s point is that we don’t save enough money and if we cut out the latte’s everyday, as well as our other wasteful spending we would have more money to invest. Essentially, you are spending your retirement every time you buy a cup of coffee. If that money were invested and compounding for 20 to 30 years you would have a pretty large sum of money come retirement time.
His recommendation is to set up our saving and investing automatically. Eliminate the human factor completely and pay yourself first. Bach writes:
“In order for Pay Yourself First to be effective, the process has to be automatic. Whatever you decide to do with the money you’re paying yourself — whether you intend to park it in a retirement account, save it as a security blanket, invest it in a college fund, put it aside help you buy a house, or use it to pay down your mortgage or credit card debt — you need to have a system that doesn’t depend on following a budget or being disciplined.”
Make everything automatic…your savings, investments, mortgage, rainy day emergency funds, 401k, Roth IRA…etc. Once you do this you will be on the path to becoming an automatic millionaire!
Both of these books helped me become more confident and knowledgeable about investing in the stock market. Once you read these books you will understand the basic principles and concepts of investing. You will also have sound strategies for how to start investing for yourself and one day becoming a millionaire.