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Sunday, September 6, 2020

Which Type of Investing Book is the Most Useful?

You’ll find a wide array of investing books available online today. As publishing costs have reduced, and the ability for authors to self-publish, the number of financial titles has expanded faster than the underlying stock-market!

I appreciate that money is a difficult topic to write about without repeating a lot of what has already been covered in other titles. Furthermore, in such a saturated marketplace, it must be difficult for authors to make their title stand out from other similar titles.

Which investing book sub-category is best?

You may think that all books about money and the stock market are essentially the same. All contain some advice about how to better manage your money and achieve financial success, right?

Well, this may be true, but the ways in how authors go about achieving this are very different. This article will investigate the different sub-categories of the best investing books, and will give my opinion on which is the best.

Investing book category 1: Reference guide

Reference guides are usually the largest and most expensive investing books in a bookstore. This is because they tend to be:

  • Larger
  • Hardback

By an authoritative institution, such as the Financial Times.  

The keyword for reference guides is ‘comprehensive’. They seek to tell you a little about a lot. The objective of a reference guide is to provide a shallow level of knowledge about the framework of a topic (i.e. what does the topic look like, how is the information structured?) and then give you a reasonable understanding of the key terms and key concepts within each sub-strand of knowledge.

Applied to the stock market, this sees reference books give an overview of the market itself, the main investment options, and a few tips on how to build an investment portfolio and manage your investments.

Investing book category 2: Narrative-driven success story

These titles are written by first-time authors, often with a professional background, who wish to give a ‘tell all’ about what they’ve learned in their career. Sometimes, the objective of the book is to give an insight into ‘what it’s like’ to be a finance industry insider. Take, for example the book ‘Traders, Guns and Money’, which is a detailed account of a derivative/FX trader’s career and what juicy secrets he accumulated during.

Investing book category 3: You can be rich too!

This category of book is designed to bring readers in who wouldn’t normally have considered picking up an investing book. They’re titled more like a magazine article than a formal book (e.g. ‘9 Ways to Build Wealth with Property’) and appeal to everyone’s core burning desire to become fabulously wealthy quickly.

The reputation of the authors behind such titles will vary widely, as will the quality of the content itself. It’s perhaps worth a quick Google of the author’s background and web presence to understand whether the title is a genuinely interesting read or whether it acts more like a glorified business card to promote the author's platform or consulting service.

Nothing says ‘I’m a consultant at the top of my industry’ like being a published author. However, as mentioned at the outset of this article, publishing a book has become a quick and easy thing to do in the modern world, so this isn’t necessarily the mark of quality as it once was.

Investing book category 4: Practical ways to save money

Saving money is as useful for investment returns as how well the investments perform themselves. You can have the luck or skill to choose fantastic companies to invest in, but if you’re unable to deposit significant sums each month then your portfolio will still see relatively poor growth over your lifetime.

Cost cutting books are tailored towards both the investing audience, and non-investors too. After all, who wouldn’t benefit from simply saving more money? Be it to put in a stocks and shares ISA, or to get better value for money from life?

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