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Strategies for Using The Best Investment Books


It’s almost a cliche of online courses these days for the host/founder to comment along the lines of “but 95% of people don’t act upon the content in this course.”

In saying so, they’re perhaps excusing themselves to listeners who find themselves in very similar financial circumstances after completing the course, to beforehand. Those individuals are asking themselves, “what have I just paid for if I’m not any richer?”.

It’s a fair challenge, and therefore it’s not surprising that course providers attempt to get ahead of that criticism by pointing out that the points and topics in the course need to be actively put into action for them to have any effect.

This sounds beyond basic, like someone is stating the blindly obvious, but I recognize this issue and I believe that it should become a larger component of any course. There’s very little point in gaining new knowledge if you don’t take any practical steps in the real world involving it.

After all, your wealth, your financial situation, your investment techniques are all a function of the money and resources which others pay you. Assuming you are not a registered charity, in a capitalist society, money does not just appear at the door, it is given in exchange for a service provided or (in investing terms) a risk taken.

Therefore, when considering how we can improve our financial position, we must be thinking about this balancing act. If we want to increase our investment returns or our income, we must avoid becoming fixated on the end goal, i.e. the income itself. We should instead be looking towards the other end of the seesaw and be thinking:

“What additional services do I need to be providing, or risks do I want to be taking, which will result in higher remuneration or investment income.”

Only when we frame the question in such a way, can we begin to take steps to achieve that part of the equation. The money will naturally follow.

Applying this logic to investment books

I began this article discussing investment courses, because we see this paradigm in a more pronounced form with courses. Participants pay much more for courses than for a book, and therefore expectations are higher – and any perceived disappointment in the apparent shortcoming of the course are more obvious.

However the exact same issue applies to investment books, whereby they are purchased off the shelf with expectations that reading the investment book will somehow improve the investment returns of the investor.

Of course (as the investment book may well point out), the returns of an investor are usually a function of the overall risk level of their portfolio, minus any amateur investment errors along the way (such as buying high and selling low).

Therefore, when buying an investment book, I have the following 4 tips to help you get the most out of the book:

1.Don’t treat an investment book like a novel to breeze through at a fixed pace. Take the time to reflect on chapters you found difficult to understand, or which you felt were meaningful.

2.Highlight your intention to act by keeping a running journal as you make your way through the books. It only has to be brief. I advise jotting down the key bullet points from each chapter.

3.When you’ve finished the book, refresh yourself by re-reading your notes, and compile a list of practical actions. Think about how you can practically apply the knowledge within to change or improve your investment strategy.

4.Take action. If you believe strongly in the actions you have written down, commit to them. Make them SMART objectives (i.e. Specific, Measurable, Achievable, Relevant and put a Time deadline on them).

With these tips, you will avoid the typical frustrations of investment book readers who churn through several titles only to realise their investment portfolio is still exactly the same.