Business & Money

October 25, 2012

The 7 Best Books for Your Money and Career


These excellent guides will help you invest better, plan for retirement and find inspiring work

By Chris Farrell | October 22, 2012
Contributor PhotoChris Farrell is economics editor for APM’s Marketplace Money, a syndicated personal finance program.



Over the years I’ve collected many books on personal finance, investing, economics and work. So I was excited when my Next Avenueeditor suggested I write a column highlighting excellent money and career books for boomers. Question was: What criteria to use in choosing them?

I decided to skip several classics, like Common Stocks and Uncommon Profits and Other Writings by Phillip Fisher, Extraordinary Popular Delusions and the Madness Of Crowds by Charles MacKay, The Intelligent Investor by Benjamin Graham,Reminiscences of a Stock Operator by Edwin Lefèvre and my favorite analysis of booms and busts, Manias, Panics, and Crashes by Charles P. Kindleberger.

These are all terrific books, full of insight and wisdom, and well worth studying and revisiting over the years. Still, they’re demanding on the reader — the kind of book you want to wade through in a university library.

(MORE: 4 Great New Tools To Manage Your Money)

In the end, I came up with an eclectic mix of seven reader-friendly books to help you manage money and career:

Against the Gods: The Remarkable Story of Risk by Peter L. Bernstein. The late financial economist was America’s leading philosopher of risk and a wonderful translator of modern finance theory, converting math-heavy ideas into easy-to-understand sentences for everyone.

Against the Gods is a delightful exploration into the evolution of our understanding of probability and chance, filled with reminders that judgment truly matters in the world of finance (as Jamie Dimon, head of J.P. Morgan Chase, learned to his chagrin when the bank’s trader known as the London “Whale” recently lost several billion dollars on speculative bets gone bad).

The real return from reading Against the Gods is a far greater appreciation of the importance of managing risk in our financial lives.

The Random Walk Guide to Investing by Burton G. Malkiel. Princeton University finance professor Malkiel wrote the investment classic A Random Walk Down Wall Street in 1973. This is his short, easily accessible version, subtitled “Ten Rules for Financial Success.”

Malkiel’s view is that you can’t beat the stock market, so your best investment strategy is to buy low-cost, broad-based index mutual funds that match the market’s performance. He also offers up other simple guideposts to managing your money wisely.

(MORE: Stop Financial Illiteracy From Endangering Your Retirement)

I wish this book was mandatory reading for everyone with a 401(k).

Risk Less and Prosper: Your Guide to Safer Investing by Zvi Bodie and Rachelle Taqqu. A Boston University finance professor and a certified financial analyst, respectively, break with a Wall Street-centric view of managing money.

They maintain that the starting point for constructing an investment portfolio shouldn’t be its long-term expected return. Instead, Bodie and Taqqu say, you ought to take a goal-based approach. Weigh the earnings prospects of your career, then invest in ways that will limit your financial risks, so your standard of living won’t fall below a certain level in retirement. (The authors believe that stocks are too dicey to be the core investment of the average worker.)

I like their framework because it takes seriously the idea that how you save and where you save is all about what you want out of life.

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