Best Guides to Investing

These guides are beginner friendly and are also better than 95% of the “advanced” guides out there.

When I first dove into investing, I went though dozens of books and websites before I felt comfortable enough to invest my money. Although it was daunting, I knew I had to start early because of the power of compound interest over time. As I learned more from my own reading, I realized that a good investing strategy is both much simpler than I expected and yet much more complicated than I anticipated once you add human emotions to the equation.

Although I have gone down different rabbit holes to understand both alternative and variations of strategies to invest, the basic strategy that made the most sense never changed. In fact, the more I learned, the more I was convinced that the basic strategy was close to the optimal strategy.

While I will explain my personal strategy in future posts, there are three resources that come to mind that will teach you everything you need to know about investing.

Best Blog Series on Investing

1. How I failed my daughter and a simple path to wealth, ~2000 words, 100% VTSAX (total US stock market)

   My go to recommendation is Jim Collins’ Stock Series because this was the first blog to introduce me to index fund investing. I gobbled up his whole series when I first started learning to invest but he sums up all his advice in the single article, How I Failed My Daughter and A Simple Path To Wealth. The rest of his stock series dives into why he recommends 100% VTSAX during your working years.

   I learned the majority of the useful information I know now about investing from reading through his stock series and my investment philosophy is largely based off the ideas he shares in his stock series. He has also published a book, The Simple Path to Wealth. If you prefer books to blogs, this is the best book to get started. He has stated that all the information in his book can be found on his blog but his book is better organized since his stock series started out as a series of letters to his daughter and has grown and evolved over time.

   If you enjoy his writing, he goes in more depth about what the path for his daughter looks like in My path for my kid — the first 10 years. I have revisited this page often as it is a single page of bullet points that would set anyone up to succeed financially in life.

Best PDF on Investing

2. If You Can - How Millenials Can Get Rich Slowly, 14 pages, 33% U.S. total stock market index fund (VTSAX), 33% international total stock market index fund (VTIAX), 33% U.S. total bond market index fund (VBTLX)

   William Bernstein is another great author, who released this free resource to teach his grandchildren about investing.

   This pdf is one of the funniest, most compact, and well written introductions to investing. More importantly he identifies the five hurdles that could derail your otherwise simple path to wealth and how to overcome these hurdles.

   For those of you who are missing the late nights of homework from your school days, William Bernstein also assigns some homework readings to reinforce the concepts of investing and how to overcome the hurdles of investing. I have only gone through the first two books of the homework so far and they are two of the best personal finance books I have read - Thomas Stanley’s The Millionaire Next Door and John Bogle’s Common Sense on Mutual Funds.

Best Video Series on Investing

3. Bogleheads investment philosophy, 11 2-6 minute videos, 10 rules

   Finally if you are more of a visual learner, check out the amazing video series on the Bogleheads wiki.

   The Bogleheads wiki is an excellent resource as you run into more questions in your investing journey but these video lay the foundation for a sound investing career. Although it doesn’t have an universally suggested asset allocation such as the prior suggestions, the 10 basic rules and the accompanying videos lay down the principles for deciding on your personal percentages of stocks, bonds, and international investments.

To validate my investment strategy, I asked five Caltech finance professors how they invested over my last three years of college and learned that they also recommended low cost index funds. The sixth believed in and taught active investing but also taught me that passive index fund investing was guaranteed to beat active investing. More on that later…