Exploring fact to promote fantasy, the best books on money, investing and philanthropy examine real-world examples of successful entrepreneurs and investors, as well as ancient anecdotes and tested investment theories to fire up the ambitions of readers who wish to improve their economic standing.
While no-one is promising that reading biographies of Rockefeller or Buffett will transfer their economic success to your wallet, by following their example and good decisions, as well as reading about the theories of various other successful investors, it might be possible to find a style of money management and investment that works for you. And if not, losing an investment of £7.99 in paper and print is far easier to recover from than a pension plan with the Layman Brothers.
Titan: The Life of John D. Rockefeller, Sr.
Any biography about the richest man in history had to have at least some useful economic and investment advice, and Ron Chernow’s edition excels at it. From the Library Journal:
“Industry consolidation, enormous new wealth, journalistic muckraking, government antitrust. Sound familiar? Reviewers enthusiastically praised this monumental work about the founder of Standard Oil, which serves as a useful reminder that what happens today in the business world often has strong roots in the past.”
Rich Dad, Poor Dad
This manual by Robert Kiyosaki pitches itself as offering financial literacy of a kind that is unavailable in schools. Advice is dispensed in an anecdotal manner in an attempt to increase public interest in finance, stressing the importance of financial independence through investing, real estate, owning businesses and the use of finance protection tactics. However, the key message of the text is own the business or means of production, rather than being an employee in it.
Think and Grow Rich
Having sold over 30 million copies in its 70 year life, Napoleon Hill’s motivational personal development book was inspired by a suggestion from the billionaire Andrew Carnegie – the owner of the world’s first one billion dollar company and second richest man in history.
Hill studied the characteristics of those who achieved great wealth during their lifetimes, some of whom were close personal friends, and developed 13 principles that would allow anybody to achieve success.
Rich Dad, Poor Dad 2: The Cashflow Quadrant
Kiyosaki’s sequel builds on the original work by introducing “The Cashflow Quadrant”. It continues the series’ attack on traditional financial schooling, asking in the blurb, “have you noticed that many of the brightest graduates from our universities want to work for college dropouts… Bill Gates of Microsoft, Richard Branson of Virgin Industries, Michael Dell of Dell Computers, Ted Turner of CNN?”
The book defines these four quadrants – as an employee, you have a job, as a self-employed person, you own a job, as a business owner you have a system (such as a franchise like McDonald’s) that produces cash flow for you and others work for you and as an investor, your money works for you. And then explains which, and how, to enter the best one: wealthy people get more than 70% income by having their money work for them.
The Richest Man in Babylon
This inspirational guide by George S. Clason aims at solving personal money problems through the retelling of eleven ancient Babylonian parables. Clason explains that it was back in Babylon where the roots of our current monetary systems and beliefs were formed, and that by studying their ancient anecdotes, we, like the citizens of that great civilisation, can “appreciate the value of money… practice sound financial principals in acquiring money… keeping money and making money earn more money”.
Buffett the Making of an American Capitalist
Roger Lowenstein gives the reader a biography of a man with a net worth of over $10 billion, exploring his journey from nothing to the world’s richest man through choosing stocks and companies for investment, and getting rich slowly. Publisher’s Weekly describe it as:
“By picking the right stocks and businesses to invest in, plainspoken Nebraskan Warren Buffett became the richest man in the U.S. In this excellent biography, Wall Street Journal reporter Lowenstein details the billionaire stock market wizard’s strategy of betting on the long-term growth of a handful of successful companies such as American Express and Berkshire Hathaway.”
The Intelligent Investor
Despite the wealth of books written in the sector, this one stands above all of thsem as being “by far the best book on investing ever written.” At least, that’s what Warren Buffett thinks. The world’s richest investor feels so strongly about this manual of investment that he even volunteered to write the foreword:
“To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. This book precisely and clearly prescribes the proper framework. You must supply the emotional discipline.”
Philanthrocapitalism: How the Rich Can Save the World
Matthew Bishop, chief business writer for the Economist, and Michael Green examine the new trend of Philanthrocapitalism – where a new generation of philanthropists use their skills with business and the corporate world to form strategies for improving the lives of others through well-run charities.
The book explores the new movement and its implications, featuring interviews with some of the most powerful people on the planet, including Bill Gates, Bill Clinton, George Soros, Angelina Jolie, and Bono, showing how a web of wealthy and motivated donors have set out to change the world.
The work combines anecdotes, expert analysis, and up-close profiles of the wealthy and powerful to see how a small group of people will change the lives of an enormous number of people.
The Millionaire Next Door
Dr. Stanley and Dr. Danko outline seven simple rules to follow in order to become one of America’s wealthy (defined in the text as someone with a net worth of over one million dollars). The book is a compilation of research done by the two authors in the profiles of millionaires, and four of the most important points are spend less than you earn, avoid buying status items, take financial risk if it is worth the reward and avoid “economic outpatient care”, or rather, watch out for children who require their parents’ money in order to afford the lifestyle that they expect for themselves.
Beating the Street
Author Peter Lynch was, before retirement, the manager of the successful Fidelity Magellan Fund, which he inherited at $20 million, which rose to $13 billion under his management. The book explains what factors he examined when choosing winning stocks (and admitting the ones that got away).
Lynch’s message is to be successful, one should favour stocks over other investments, based upon investigative research into a corporation’s prospects. For instance, before investing, credit checks and visits to the firm’s installations are essential. His core belief? “Focus on companies, not the stocks.”
Here’s what I think the best book ever on investing is:
The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John C. Bogle