When I’m in a book shop, I always find myself visiting the money and finance section to see the latest titles. Usually, the top selling investing books will be highlighted, which allows me to keep my finger on the pulse of what people are reading and what financial topics interest them.
The top investing books can be on varied topics, such as day-trading like a pro, saving for a house, or putting your budget on a diet.
In fact, the topics of the top investing books tend to rotate, and in a sense they remind me of the fashion world – slowly churning through ideas on 40 year cycles like a predetermined wheel.
Of course, there are some sensible reasons for this. The economic cycle, for start, means that the population will generally have a changing mindset year-by-year. Sometimes people will be most interested in cutting back, such as during a recession. In other years, where incomes are up and confidence is booming – there will be much more interest in how to tap into a booming stock market.
Either way, the top investing books will be consumed largely in the same volume each and every year, regardless of their content.
The question posed in this article is: do they actually work?
Answering this question depends largely on the type of investing book you’re imagining, and what the investing book is actually trying to achieve.
Do investing books actually work?
Investing books do generally achieve their objectives. The better question is – is that objective actually aligned with your best interests?
Therefore to really get to the bottom of whether the top investing books actually work – you need to interrogate the title in question and understand what the motivation of the author really is.
I’ll simplify the matter by giving 3 examples of prime motivation for investing book authors:
- PR & Brand Recognition
- Benevolent education of the masses
- Book sale volumes
Let’s quickly take a stab at each of these motivations in turn.
PR & Brand recognition may be applicable to a self-employed individual who is using a book launch as a platform to promote themselves as a product in the future. For example, the book may shine a positive light on their own investment performance, in a way that will encourage more investors to give their money to the author to manage.
Educational authors are usually quite academic or grounded in the day-to-day concerns of the general public. Their interest (much like my own), is in increasing the general knowledge of the public about investing. In the UK, we are not as prone to investing as our counterparts in the US, and much of that is cultural. We are not encouraged to invest because it is seen as risky (it is!) and that we should be careful with our money. In the US, as a contrast, entrepreneurship is heavily pushed by many in society, and investing in the stock market is closely connected to this.
Authors chasing high book sales could be aligned with your interest. After all, nobody will buy a book if critics and the publisher didn’t think that it would be a helpful read for anyone. That being said, a serial author will tend to write on specific matters rather than giving an all encompassing guide. Doing so would limit their ability to write future titles!
Legacy authors are those looking to write a memoir of sorts on their times as an investment professional. I find that these can be really interesting because their gestation period has been long, and their thoughts very well formed. After all, a memoir is not typically something which is rushed.
I find that the top investment books written by authors with a legacy or educational mindset are the most effective and work the best, because the heart of the author is more closely aligned with that of their reader. This means they have the best incentive to provide advice which is both truthful and avoids the sensational tendencies of authors chasing best seller lists.