Mumbai: Finance is a subject that is often not talked about or discussed in Engineering fields. Yet it is the single most important topic that students should focus on for a stress-free life. To do so reading essential books is very important.
Engineering students often ignore this topic and focus more on building cool gadgets, researching various ideas, or starting a company. Often their day-to-day activities include writing assignments and completing practicals. Very rarely do you see students from engineering backgrounds talking about finance.
When college life is over, students get on the horse of getting a job and start looking for the best packages available to them. “Kitne ka package mil raha hai?” is the general question asked by students to each other.
Finance is a subject that will help you earn more money from the existing money that you have. So instead of keeping your money in your bank account; You can put your money to work for yourself. Your money will go and work on its own and bring back more money for you!. How exciting.
Earning money and building your net worth will help you in becoming financially independent and will pave the way for you to live where you can de what you wish to do.
But in order to become financially independent, you must put in the effort and learn about finance. What better way to learn about finance than learning it from the Billionaires themselves.
Warren Buffett, one of the world’s most famous investors started investing when he was just 13 years old. When he was asked why did he start investing so early, he said, “I should have started investing 2 years prior to 13 years old”.
Investing is the real deal that will help you build your net worth and let you an extra source of income while also shielding yourself from sudden financial challenges.
So follow along on this blog to check out the various book recommendations which will help you get started on learning about finance.
1. Rich Dad, Poor Dad – Robert Kiosaki
I am sure you must have heard of Rich Dad, Poor Dad. It was a New York best seller book, published in 1997. It conveys a message of financial literacy and its importance in everyone’s life.
Robert talks about the two people, Rich Dad and Poor Dad, and their financial literacy, mindsets about money, and how they accumulated their wealth.
His Poor Dad was a professor at a college, and while he was a really brilliant person he was financially very weak. Financially he was very illiterate. Hence he was not able to fulfill many of his son’s requests and ended up adjusting to his life. Poor dad always thought of money as evil and never bothered to earn more than his salary.
Rich dad on the other hand was an entrepreneur and used his financial literacy to build his net worth and buy things and be financially independent. He didn’t think of money as evil and used his financial literacy to earn more money than ever.
This book will help you understand assets and liabilities, how to use credit from banks, investing in real estate, and earning money from it.
This book will open your eyes to financial literacy and pull you up from the Poor mindset and throw you into the Rich mindset.
Click Here to Buy: Rich Dad Poor Dad
2. Poor Charlie’s Almanack by Charlie Munger
Everyone must be familiar with Warren Buffett, but very few remember his partner and investor, Charlie Munger.
Charlie Munger is a lawyer by profession and started investing in the stock market in 1960s. Charlie eventually teamed up with Warren in his Berkshire company and is now the Vice President of the company.
Charlie is known for his different approach to investing than Warren’s Ben Graham inspired investing style. Charlie changed Warren’s perspective on how he valued companies. He changed Warren from investing in undervalued companies to companies that are overvalued but have a considerable MOAT.
Charlie in this book also talks about the various investments they made and the reasons behind those investments.
Charlie in his book also talks about the Latticework of Mental Models. He also talks about the importance of having to understand the important topics from various different fields like engineering, law, medicine etc. He talks about the importance of having basic knowledge in different fields and how it helps to your advantage.
NOTE:- This book is expensive so try to find it in some library or a PDF.
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3. One up on Wall Street by Peter Lynch
Peter Lynch is one of the most widely known money managers in the world. His fund Magellan Fund of Fidelity Investments averaged an annual return of almost 29.2% between 1977 and 1990.
He was known for investing in companies that had very good financials but also very good business prospects. He felt anybody could be better investors if they could just put in a little bit of effort.
The book contains a lot of information of the investments that Peter made during his time as a fund manager. The simple way in which he analyzed the businesses and invested in them is very easy to understand. A simple logical explanation that everyone can understand is used by Peter to put forth his point of view.
Peter was also known to invest in a number of companies. Sometimes he would be investing in more than 1000 companies at the same time!!.
The book also talks about diversification and also how Peter used to gain information about the companies. A very good read if you wish to understand how to learn about businesses and how to evaluate them and their future prospects.
Click here to BUY:- One Up on Wall Street
4. Principles by Ray Dalio
Ray Dalio is one of the richest men in the world and is one of the most well-known, hedge fund managers in the world. His company, Bridgewater Associates is the largest Hedge Fund Company in the World.
Ray Dalio had quite of a ride in his career. He was known for appearing on Television and sharing his views. He had shared during 1979-1981 that the stock market was in a bubble and that the stock market would fail. This big announcement of television turned out to be false and the market touched new heights.
It was a very big defeat for Ray Dalio and he lost all his employees and lost all of his company eventually going broke. It was a time when he lost everything he had gained. Not only had he lost his money but he had also failed on national Television.
But instead of moping around he started again and started building his business brick by brick. During this time he started writing down Principles that helped him in his life.
The Principles helped him through the best and worst in both his Personal and Professional life. The book has a lot of Principles that Ray used in his life and also how he applied these principles in his life.
This book is not only for understanding how to run a business but also about human psychology. Yes, you heard it right, there are so many examples and principles related to human psychology that will help you in understanding your team better. The importance of team building, radical transparency, and the truth are well documented in this book.
The book has a point-by-point principle for the various situations that Dalio faced and handled in his career. A video explaining the same is also available on youtube.
Click here to BUY:- Principles
5. The Dhando Investor by Mohnish Pabrai
Mohnish Pabrai is the head of Pabrai Funds and he manages the Fund in excess of 300 million Dollars. Mohnish Pabrai has a very low risk and high rewards strategy for his investments.
To help us understand this strategy he explains the US motel industry which is dominated by the Patels of India. and how they were able to do it.
Not only does he delve into his low-risk high reward strategy, he also explains how to invest in a business and the key points to look for in a business.
Though whatever he explains in the book is highly inspired by Warren Buffet and Charlie Munger, the way in which the examples are explained is worth noting. He gives a framework that you can look for and create your own investment strategy by understanding the framework.
Click here to BUY:- The Dhando Investor
Though there are many books which are available out there, I believe these books which have very simple language and are easy to understand will not only help you in developing an investing mindset but also change your view about money and how to spend it.
There are many more books which are also helpful for investing but that is for next time. These books will be enough to get you started and get interested in investing in the stock market, real estate, or even building your own business, or even about human psychology.
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