Good afternoon and we're coming on the air at this hour with breaking news concerns over
the Coronavirus outbreak and once again, they were affecting the stock market. Look at that
right there. Wall Street ending one of the worst weeks of trading since the financial
crisis in 2008. The closing the deal was expected just a short time from now, but it's down
about 416 points there as you can see-
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As a beginner, it can be extremely daunting when people around you tell you that they're
investing their money in the market, and you have no idea where to even begin or can even
tell the difference between real estate and the stock market. So in this video, I'm going
to share with you three extremely useful books that have helped me get a better understanding
of how to evaluate the market, the value of a business and general trends that you should
be aware of.
Number one, Stock Investing for Dummies. We all have to start somewhere and there's so
much more value in here than you would expect. This book will teach you the absolute fundamentals
that you would need to get the ball rolling. Like finding out how much money you could
truly afford to invest and how much of an emergency fund you should have at all times
in case your investments go South.
It also introduces you to concepts like index funds and value investing among many, many
other things. A lot of this information is going to be foreign to you, so I recommend
you do what I did, and highlight important points and definitions that you think you'd
want to come back to in the future. The best thing about this book is that you can jump
around from chapter to chapter since each specific topic is fairly self contained within
that chapter.
However, it doesn't hurt you to read as much as you can to come across new tips and resources
that you might find useful. It's very important for you to understand the differences between
investing, saving and speculating. Which one do you want to do? Knowing the answer to this
question is crucial to your goals and aspirations.
There's a section in this book that will give you a general overview on the difference between
growth stocks and value stocks as well as how you can set your investing goals based
on your financial situation.
I'd also recommend taking a look at the appendix which can point you in the right direction
with resources to learn more about different brokers and investing folks and websites so
that you can have all the information you need.
Number two, Unshakable by Tony Robbins. To write this book, tony Robbins sat with 50
of the greatest minds in modern finance to gain their perspective on investing and financial
management and he presented it in a way that is understandable for anybody, beginner or
professional investor.
Unshakable is such an excellent guide in the mindset that you need to have as an investor
and provide several facts that can free you from the anxiety that dominates most people's
financial lives. We all have a ton of fear about what will happen to our money if we
invest it.
What will happen if your stocks plummet? Who can you really trust to advise you on managing
your money? Tony Robbins shines a light on some of the biggest psychological pitfalls
and the mistakes that people make and you provide solutions to them using facts and
data.
I really think that this book gave me the confidence that I needed to start investing
because of the amount of factual information that was given about the market. The real
route to riches is to set aside a portion of your money and invest it so that it compounds
over many years. That's how you become wealthy while you sleep.
That's how you make money your slave instead of being a slave to money. That's how you
achieve true financial freedom. He also talks about how people are so concerned about entering
the market at the right time and are afraid of investing right before a stock market crash.
But through the statistics that are provided in here, you will learn that it is better
to be in the market than sit out of it.
Now in the age of commission free trading through apps like Robinhood, you do not need
to be concerned with using a broker too much. But unshakable sheds light on how trustworthy
your financial advisors can be and how small hidden fees can erode your money away over
time. All really, really helpful tips for you to know.
Number three, The Intelligent Investor by Benjamin Graham. This book is essentially
the Bible of value investing and focuses on generating long term profits by picking companies
with high intrinsic value and ignoring the current state of the market.
This was written by Benjamin Graham who mentored Warren Buffet and taught him to become perhaps
the greatest investor of all time. Since this book was written in 1949, some of the references
in language might be outdated and quite hard to understand.
But don't be hard on yourself if you can't grasp every single aspect of it because each
chapter has a breakdown and gives it context and helps to dummy like you and me understand
what's being said.
There are two chapters in here that will teach you more about being a successful investor
than anything else. One on market fluctuations and one on incorporating what he calls a margin
of safety, which can help prevent you from losing a lot of money on your investments.
So pay close attention to those.
Graham came up with an analogy called Mr. Market where the entire stock market is a
moody unpredictable person who you should completely ignore. Most people feel like there's
value in a company based on how its stock has been performing recently. But this book
tells you that this is completely false.
Instead, you should rely on your own research and ignore the way the market has been performing
altogether. The best way to measure your investing success is not by whether you're beating the
market, but by whether you've put in place a financial plan and a behavioral discipline
that are likely to get you where you want to go.
Part of the focus of this book is to show you the importance in doing your own research
before making any investments. We've often heard that the amount that you should invest
is dependent on how much risk you're willing to take. However, Graham has actually explained
that the amount that you should invest is dependent on how much effort and intellect
you apply to your investments.
So if you want to get started, start small and keep learning everything you can about
how you should evaluate a business and what to look for before you buy. Books like these
will give you a strong headstart, but so we're learning things on Google and YouTube, but
the information is all out there.
Just take your time and don't be daunted by it. Thank you so much for watching. My name
is Vihan Chelliah. I'll see you next week.