HoboPilot

With the direction the stock market has been going recently, it's gotten me thinking about beginning to invest some money for the future and ultimately for my retirement. I'm 20 years old and have been working full time this fall at an internship and have been making enough money so that my savings account has actually been growing. I'm interested in starting a Roth IRA, but would also like to get my feet wet in the stock market with a little bit of money so I can get a feel for how it all works before I graduate college.

Unfortunately, I don't feel my knowledge of the stock market, or just financial planning in general is at the level where it should be. I was wondering if anyone knew of some good books that I should look into for sound investing techniques? I'm sure there's lots of books about the topic, but I'd like to hear if any of you have and recommendations.

Thanks for the help, it's much appreciated.

rotorhead1026

The one silver lining around this stock market cloud is that there are some good buys - if you have any money left.

Peter Lynch, who retired from Fidelity a few years back, wrote some fine general books on investing.

One Up on Wall Street

Beating the Street

Learn to Earn

Good place to start and very readable. Not only good investment and research advice, but much good information on how to deal with account "executives" and brokerage houses. Go for it, but be careful about taking anyone's advice (including mine! ).

Led Zep

Hobo,

Thanks for asking, my pleasure to offer you some advice.

I'll address your questions the best I can with a lot of personal experience behind it. First, I would recommend this book, The Total Money Makeover by Dave Ramsey. This is a good book that deals with personal finance, which is the first step in investing and building wealth. Since you already indicated that you are 20 AND have some money to save/invest, it sounds like you are ahead of the game already. Regardless, you will enjoy this book.

Second, with regards to books and how to invest. There are two things I would recommend you do. First, read and learn about the market and how to invest. I would start by picking up a copy of the Wall Street Journal and reading through it. Also, I think the WSJ has published one or more books on the subject of investing. There are many more, and places like Borders and Barnes and Nobles have entire shelves dedicated to the subject.

The second (and biggest) piece of advice I will offer is partly based on your following statement:

I think your statement describes the majority of us. With that being said you want to hire (non-commission) a good, competent financial planner who works for a FEE. Investing can be very complicated and can cost you plenty if you are not careful. A good financial planner will know (as best he/she can) where to put your money, how much to invest where, innovative, etc.. A lot of millionaires have acquired the wealth they have not because they are financially smart, but because they were smart enough to hire people who are.

A good financial planner will also share/teach you what is going on with your money, at least mine does. Most are like pilots in that they enjoy what they do AND enjoy talking about the crux of their trade - money. You will learn tons by listening to your financial planner and reading as much as you can about money, the market and wealth-building strategies.

Hope this helps.

SkyHigh

I would start with a solid foundation about how to use money. Buy a few books from Suzie Oman and Dave Ramsey. Get in the habit of saving and then open a 401K. It can take a lifetime to learn even a small amount about investing. Start now and expect to make mistakes.


Skyhigh

Winged Wheeler

"The Smartest Investment Book You'll Ever Read", Solin, 2006

Takes about 2 hours to read, costs about 10 Bucks.

WW

HoboPilot

Wow, thanks for all the help guys, this is awesome!

I'm definitely going to stop by the bookstore during lunch today and pick up a few books along with a WSJ to start reading over the weekend.

If anyone else has some more books to recommend let's keep the titles coming.

By the way, has anyone here read any of Jim Kramer's books? A few of my friends who are in school for finance had some good things to say about his books, but I'm not too sure about his style, he seems a little too emotional on tv although that's probably mostly an act.

BTDT

Suzie Orman (sp) has a book that is supposed to be good but I haven't read it.

A longtime classic for stocks is called "Reminiscences of a Stock Operator" by Edwin Lefevre is well known. It doesn't go into the details of investing but is a classic.

"Market Wizards" by Jack D. Schwager is also good. It is interviews with top traders.

I also have "A Random Walk Down Wall Street" by Burton G. Malkiel but haven't read it yet.

I would be leary of anything that just discusses technical anylisis of investing in stocks or commodities.

rotorhead1026

Agreed. Tech analysis is a full-time job, and it's VERY difficult to make money in futures. But some brokers will try to steer you in this direction. Don't do it. They make their money off the top (sales commission). You don't.

After you read a bit, do what makes sense to you. If someone's advice doesn't seem right, don't take it. Pay attention to that queasy feeling in the pit of your stomach. This is an anonymous forum, and all of the advice above could be from a bunch of complete failures ... so mix in a healthy dollop of your own common sense.

But don't just take the counsel of your fears, either ...

Good luck!

crewdawg

Many of these books well also talk about being a little more thrifty. Start here...instead of buying the book, check your local library. If your local library does not have the book they can most likely get it through inter-library loan.