5 Financial Books I’ve Read Since January

5. A Random Walk Down Wall Street (Burton G. Malkiel)

Technically, I’m still reading this. It’s a bit of a dry read and unfolds a bit programmatically (you know the author’s overall point of view and argument, so much of the book is just walking through all the evidence that supports it). But the two lessons I’ve learned so far, I was already familiar with.

1) Mutual Funds waste a lot of your capital in fees
2) Index funds outperform on average and if a long-term perspective is taken

There are some other details that I might come back to after I finish it. A lot of nitty gritty about how the mutual fund industry works (or doesn’t work). A few surprises about the lack of competence and care on behalf of some mutual fund industry members (i.e., “security analysts”). Overall, you probably don’t need to read this if you’re already aware of the problems with mutual funds and you already know how great index funds can be. But it is a classic and very informative. So you should buy it if you want to be convinced that index funds are the way to go.

4. Crash Proof: How to Profit From the Coming Economic Collapse (Peter D. Schiff)

The jist of this book I was also already familiar with. A weakening US dollar (and the many reasons why), gold bug philosophy and a growing trade deficit.

But this is an excellent piece of writing and still woke me up to (reminded me of) what’s really going on right now economically. I’m amazed at some of the interviews you can watch on YouTube – recordings of NBC interviews etc. where other industry “experts” doubt Schiff’s prognostications. Schiff appears to be a solid researcher and analyst. His basic diagnosis of the US economy today echoes that of Ron Paul and Jim Rogers. This is a solid book worth getting if you haven’t read anything in depth yet on the larger economic problems in the US. That means: beyond the recent media scramble over the “sub-prime crisis” – that crisis was no surprise and was already the tip of the iceberg before it had broke through national headlines.

3. A Million Bucks by 30: How to Overcome a Crap Job, Stingy Parents, and a Useless Degree to Become a Millionaire Before (or After) Turning Thirty (Alan Corey)

This is a hilarious book. It’s not often you get financial-self-help and a roller-coaster narrative all-in-one. Follow Alan Corey as he updates the growth of his networth over a period of six or seven years on his way to make a million bucks before the time he turns thirty. I don’t want to spoil it for you, but he meets and clearly exceeds his goal by the end of the book. He had no inheritance or lottery-win. But he was also single, with no children, and no student loan debt. Yes, the secrets to his success involved some real estate.

But you really need to read the drama for yourself. I bought this book one Friday afternoon and read it by the end of the night. It was like going out to watch a film that you’ve been excited about for a while. Just great fun – I really recommend it! It was also quite inspiring to watch such single-mindedness in pursuit of one’s goals. Makes you realize just what it takes. This book will motivate you, guaranteed.

2. China Fireworks: How to Make Dramatic Wealth from the Fastest-Growing Economy in the World (Robert Hsu)

A close contender for #1, but ultimately I place more value on vision-building than in learning the technical how-to points. This book is a good medium between these two extremes, however. It’s eye-opening and pragmatic. It will open your mind to investing in China and tell you how you can start doing so. Unlike other books on investing in China (From Wall Street to the Great Wall, etc.) which were written still a bit too early, I think, for the average investor to have any really accessible China vehicles.

Hsu’s book is just what I had been looking for over the past year. I read it in one week (it took me that long only because I had other projects on the go, so I limited myself to three chapters at a time). Robert Hsu is on fire. He’s got his own network of analysts in China that give him current updates on how the culture, economy and politics are developing. You won’t get Hsu’s kind of advice anywhere else. I highly recommend this book. It may be out of date in five years’ time, but the bigger-picture aspects of it will still hold true and be a great historical record of what China looks like today. I like this book so much and have gained so much from it that I’m going to write a more detailed report on it at some point soon.

1. Adventure Capitalist: The Ultimate Road Trip (Jim Rogers)

If Malkiel’s book is a classic and A Million Bucks by 30 is like watching an action-adventure (for financial nerds like us, maybe:), then Jim Roger’s Adventure Capitalist must be like the best, highest-ratings reality TV show ever (or whatever that corresponds to!). It took me a few days or more to read this book, but if I hadn’t had to go anywhere or do anything else, including sleep, I really think I would have just kept reading and reading.

This was the ultimate reality-TV or live documentary, and probably a very important travel document for historical reasons as well. The title says it all. It’s a classic too, along with his first road-trip book – Investment Biker. So you might already be familiar with the basic idea: Jim and his girlfriend ride around the world in a custom-built BMW in order to check out investment opportunities and basically just have a good time doing so.

But this is one book that doesn’t have a nice five-bullet list of take-home points. You really need to read it yourself to hear about some of the crazy details and insights Rogers gets when he travels from place to place.

One important point I took away from it is that, for example, Russia (and much of Eastern Europe except Turkey) is still not a great place to invest in. This goes against some current market wisdom. There are certainly funds you can invest in for exposure to this, one of the “BRIC” countries. But from what Jim Rogers has said, I would still wait several years before looking at Russia.

If you haven’t been introduced to the Jim Rogers phenomenon yet, this book is the way to go.