That Thing Rich People Do: Required Reading for Investors (Paperback)
This book offers the easiest way yet to learn the key principles of investing. Weighing in at just 136 pages, it conveys more knowledge than many books twice as long, with charm and humor that makes it a pleasure to read. For those who are new to the subject, the book starts at the very beginning, explaining such basics as the difference between stocks and bonds. The book isn't just for beginners, though. People who have invested for years will learn how to achieve faster growth at lower risk by eliminating unnecessary (and sometimes hidden) expenses and maintaining better diversification. The first section of the book, "Laying a Foundation," explains how money grows and the relationship between risk and reward. The second section, "The Investor's Toolbox," introduces stocks, bonds and other categories of investments, as well as different types of investment accounts. The final section, "Building a Strategy," explains how investments really work (why a stock's price might go down, not up, immediately after a company announces good news, for example) and shows how to put sound investment principles into action. The author isn't content to point his readers in the right direction. He also offers a way to develop habits of thought that will help them stick with a good strategy through difficult times. Read this slim volume and you'll be prepared for a lifetime of investing.
Kaye A. Thomas writes books on taxes and investing, and maintains a website covering these topics at Fairmark.com. He graduated from Harvard Law School in 1980.