Where To Get a Basic Education in Investing

So, I got an interesting email today.  The writer asked for a book recommendation so they could learn more about investing.  Well, I have a tough time recommending investing books.  Here are a few reasons:

  1. Some financial books are written to promote strategies that I think are highly suspect, carry more risk than the author lets on, or may be unproven.  Frankly, plenty of these books worry me because they don’t provide a balanced, educational view of investing.
  2. There are plenty of books that purport to be about investing, but are actually made to up sell the reader into purchasing seminars.*  I think this is the scuzziest type of investment book, and they’re pretty common.
  3. Some financial books are fluffed up.  Honestly,  there are plenty of investing books that are worthy of an article or maybe even a pamphlet, but not a whole book.  And yet, the author/editor/publisher manage to add enough words, white space and miscellany to stretch it out to book length.
  4. In my opinion, investing books that are unbiased and educational have a nasty habit of being long, nuanced and boring.  That’s no good.  You can’t learn about investing if your eye scream for mercy every time you crack the book open.

Who to trust?  Happily, learning the basics of investing doesn’t require a full length book, since it’s pretty straightforward.  Here are a few links from knowledgeable sources that can get you started.  They are, of course, free, and in ascending order of difficulty.

  • Federal Reserve Bank of Dallas’ Building Wealth Website:  If you want a lightweight introduction  to personal financial planning, this is the place to go.  They have a flash interactive presentation on a variety of fundamental personal finance concepts.  If you want an overview of investing, I suggest starting the game and navigating to “Save and Invest” > “Tools for Investing” for an understanding debt investment versus equity.  There’s also a PDF download available on the site.
  • FINRA Investor Education Foundation’s dollarsfromsense.com:  This is a snazzy website that introduces investment concepts clearly and with multi-media presentations.  It’s written with a focus on younger people, which you may or may not like.
  • Purdue University Cooperative Extension’s Focus on Financial Management Website:  There are workbook units in PDF for free download that explain personal finance concepts briefly and with a certain academic flair.  One caveat, if you’re not comfortable with lingo like “disposable income”, “tax-deferred”, you may have some trouble getting through the worksheets.  They’re written for beginners, but lots of personal finance term creep in.  You’ll probably want “Unit 5: Focus on Savings and Investments”.  Pay special attention to the section on Time Value of Money.
  • The Fed also has a lot of personal finance educational material available, if you want to drill down into various topics.

This should be enough to get you started on learning about investing.

*  I can think of at least three authors off the top of my head, without even trying, by name, who do this trick.  I’m not naming them here because I don’t care to be sued into oblivion.

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