Investment book for fresh college grad with a job?
June 14, 2024 7:32 AM Subscribe
What's a current book with good advice for a recent college grad who has a job (so not just surviving)?
I have a copy of "Beyond the Basics" here, but it's like a decade old -- and the statistics are starting to feel a little out of date!
Thanks for any advice -- books or free courses, or otherwise.
I have a copy of "Beyond the Basics" here, but it's like a decade old -- and the statistics are starting to feel a little out of date!
Thanks for any advice -- books or free courses, or otherwise.
My current favorite is still the book that Scott Adams couldn't get published, because it is only one page long. It's not a book, but it really does have the basic guidance that is sufficient to get someone off on the right track with their savings and investment strategy. It isn't in depth and doesn't provide much of an education on how the markets work anything, but part of the point is that most financial advice is unnecessarily complicated and leads to non-optimal decision-making.
posted by Winnie the Proust at 8:08 AM on June 14 [1 favorite]
posted by Winnie the Proust at 8:08 AM on June 14 [1 favorite]
Adams'* advice is similar to that of Harold Pollock, who wrote his advice on an index card. Because you can't publish an index card, he also cowrote a book, which expands on that shorthand. (*I'll try to preempt any further comments by noting that the accuracy of Adams' advice here is not invalidated by the fact that the vast majority of his other beliefs range from crazy to evil.)
posted by Mr.Know-it-some at 8:33 AM on June 14 [3 favorites]
posted by Mr.Know-it-some at 8:33 AM on June 14 [3 favorites]
I thought William Bernstein's If You Can, a very short book, wasn't too bad (it falls more or less into the same school as Pollock's, I believe).
Anything that's not in this or similar books because it's too new a product is something a young person not encumbered with a trust fund should not be trifling with. I mean it. Don't do it. DON'T FUCKIN' DO IT!!! That's what they need to hear.
posted by praemunire at 8:40 AM on June 14 [1 favorite]
Anything that's not in this or similar books because it's too new a product is something a young person not encumbered with a trust fund should not be trifling with. I mean it. Don't do it. DON'T FUCKIN' DO IT!!! That's what they need to hear.
posted by praemunire at 8:40 AM on June 14 [1 favorite]
Big fan of J L Collin's The Simple Path to Wealth. His advice doesn't really deviate all that much to any of those above, but I like the way he thinks and his explanations. I've probably given away a couple dozen copies of this over the years to graduates.
posted by Doktor at 10:00 AM on June 14 [2 favorites]
posted by Doktor at 10:00 AM on June 14 [2 favorites]
The Only Investment Guide You’ll Ever Need has very similar advice to the above, but it is also funny. It is the only guide you will need not because the advice is unique, but because good financial advice is not complicated.
posted by catquas at 2:49 PM on June 14 [1 favorite]
posted by catquas at 2:49 PM on June 14 [1 favorite]
Much as I dislike MeFi's own plannedchaos, that is how it works. #8 I would make sure that you were dollar cost averaging those funding of those funds, (per the MoneyTalk guy on AM radio that I haven't been able to listen to any more and who's name I can't remember).
And vary dubious on his #9. But, overall, good stuff above those.
No load mutual funds baby!
posted by Windopaene at 2:50 PM on June 14
And vary dubious on his #9. But, overall, good stuff above those.
No load mutual funds baby!
posted by Windopaene at 2:50 PM on June 14
I heartily second The Index Card referenced above by Mr.Know-it-some.
Another good one is All Your Worth by Sen. Elizabeth Warren and her daughter.
The r/personalfinance wiki has very solid advice as well.
For a more inspirational and less nuts and bolts approach, The Millionaire Next Door may be of interest.
Please be very wary of Rich Dad, Poor Dad and Dave Ramsey's offerings. In my opinion, Rich Dad, Poor Dad is overly focused on real estate investing and has some dubious conclusions. Dave Ramsey's advice is similar to Alcoholics Anonymous for people with a lot of debt, particularly credit card debt. It has helped a lot of people get out of debt and on their feet, but his investment advice is, in my opinion, terrible.
My advice to my daughter, who is largely uninterested in the topic and whose employer did not offer any type of retirement plan, was to start a Roth IRA at Vanguard (although Schwab and Fidelity are also good choices) and to buy a target date fund set for when she is 65. Then to set up an automatic draft from her checking account for each month to keep the investing going by default to take advantage of dollar cost averaging. I wish I had done the same at the beginning of my career. Most of the advice for investing will tell you to invest 10 to 15% of your pay and I concur but if you can bump it higher you won't regret it. Just remember to adjust it when your pay goes up! Otherwise you can set it and forget it for the most part. Don't obsess over the market's daily or even annual fluctuations if you're investing for a retirement that is 30 or more years away and don't leave the market during the inevitable downturns. As the saying goes "Time in the market beats timing the market every time."
Good luck!
posted by statusquoante at 6:48 AM on June 15 [2 favorites]
Another good one is All Your Worth by Sen. Elizabeth Warren and her daughter.
The r/personalfinance wiki has very solid advice as well.
For a more inspirational and less nuts and bolts approach, The Millionaire Next Door may be of interest.
Please be very wary of Rich Dad, Poor Dad and Dave Ramsey's offerings. In my opinion, Rich Dad, Poor Dad is overly focused on real estate investing and has some dubious conclusions. Dave Ramsey's advice is similar to Alcoholics Anonymous for people with a lot of debt, particularly credit card debt. It has helped a lot of people get out of debt and on their feet, but his investment advice is, in my opinion, terrible.
My advice to my daughter, who is largely uninterested in the topic and whose employer did not offer any type of retirement plan, was to start a Roth IRA at Vanguard (although Schwab and Fidelity are also good choices) and to buy a target date fund set for when she is 65. Then to set up an automatic draft from her checking account for each month to keep the investing going by default to take advantage of dollar cost averaging. I wish I had done the same at the beginning of my career. Most of the advice for investing will tell you to invest 10 to 15% of your pay and I concur but if you can bump it higher you won't regret it. Just remember to adjust it when your pay goes up! Otherwise you can set it and forget it for the most part. Don't obsess over the market's daily or even annual fluctuations if you're investing for a retirement that is 30 or more years away and don't leave the market during the inevitable downturns. As the saying goes "Time in the market beats timing the market every time."
Good luck!
posted by statusquoante at 6:48 AM on June 15 [2 favorites]
yeah, at least for the US, the flowchart that came out of some early efforts in the Personal Finance subreddit is pretty dang good. https://i.imgur.com/lSoUQr2.jpeg
But all of the advice above is solid. If you make it this far down the list and are still looking for more inspiration, I think I was in my early twenties when I read a Clark Howard book and that really helped squeeze a [few decades of weird ideas about money that I inherited from this uncle and that cousin and the one rich kid in my high school etc.] into [something cohesive, coherent, and manageable without it absorbing my whole life.]
(And I don't know "Beyond The Basics" but even if the examples are out of date (interest rates aren't realistic in 2024, etc.) the actual basics (as a chorus of replies above is saying) are pretty rock steady.)
posted by adekllny at 7:27 AM on June 15 [2 favorites]
But all of the advice above is solid. If you make it this far down the list and are still looking for more inspiration, I think I was in my early twenties when I read a Clark Howard book and that really helped squeeze a [few decades of weird ideas about money that I inherited from this uncle and that cousin and the one rich kid in my high school etc.] into [something cohesive, coherent, and manageable without it absorbing my whole life.]
(And I don't know "Beyond The Basics" but even if the examples are out of date (interest rates aren't realistic in 2024, etc.) the actual basics (as a chorus of replies above is saying) are pretty rock steady.)
posted by adekllny at 7:27 AM on June 15 [2 favorites]
Minor advice I've never seen in a book:
1: Investing for retirement/your future takes a long time. You have to invest $20k a year for about 15 straight years (or more) to get to $1m. Since most people don't have $20k spare to invest every year, it takes even longer. Think about that. Starting at 25, 15 years is 40, starting at 35, it's 60. So don't listen to Dave Ramsey about paying off all your debt first. Investing takes a long time, and that's something most of us can't change.
2: This is advice best for the young: Get to $100k invested as quickly as you can. You work really hard, your first $10k earning 7% a year, and you don't even have enough for a single rent payment. It's disheartening. So $100k is your first goal. Then at 7% you have enough to buy a very cheap car. It's not much, but it's actually something.
3: $1m, plus some type of fixed income retirement, like Social Security or a pension is enough for most people. You don't have to have some unachievable goal of like $10m, which mathematically most people can't even earn in their lifetime.
4: you want to live like a 'millionaire', then about $4m is your goal. That's $160k a year in income before taxes for the rest of your life.
posted by The_Vegetables at 9:39 AM on June 16
1: Investing for retirement/your future takes a long time. You have to invest $20k a year for about 15 straight years (or more) to get to $1m. Since most people don't have $20k spare to invest every year, it takes even longer. Think about that. Starting at 25, 15 years is 40, starting at 35, it's 60. So don't listen to Dave Ramsey about paying off all your debt first. Investing takes a long time, and that's something most of us can't change.
2: This is advice best for the young: Get to $100k invested as quickly as you can. You work really hard, your first $10k earning 7% a year, and you don't even have enough for a single rent payment. It's disheartening. So $100k is your first goal. Then at 7% you have enough to buy a very cheap car. It's not much, but it's actually something.
3: $1m, plus some type of fixed income retirement, like Social Security or a pension is enough for most people. You don't have to have some unachievable goal of like $10m, which mathematically most people can't even earn in their lifetime.
4: you want to live like a 'millionaire', then about $4m is your goal. That's $160k a year in income before taxes for the rest of your life.
posted by The_Vegetables at 9:39 AM on June 16
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posted by Mr.Know-it-some at 7:53 AM on June 14 [2 favorites]