There's nothing worse than being at a social event and having absolutely no idea what your fellow guests are talking about when current events are brought up.
Like with any new learning adventure, it's important to read material from not just one source of information, but many sources. Expanding one's investment and money management knowledge is no exception. Sure, there are a number of TV shows that talk stock all the time and make investing sound like child's play, but some of the best sources of information that provide useful information about how to manage money or just general finance come in the form of books. Books that are much older than I am provide solid fundamental knowledge about how the stock market operates, basic money management and investing principles, and baseline knowledge around how economies work and how human psychology plays a role in moving markets and pricing models.
Having a general sense of how all the moving parts of a world economy works and how it affects financial markets is helpful when making your own investing decisions or money management choices. Should I diversify my portfolio into emerging markets rather than solely in North America? What are emerging markets? What is the idea behind "buying the rumor and selling the news"? Why do economists and investors around the world praise Warren Buffet as being an investing guru? What should I be investing in with my new TFSA contribution if interest rates are going to be rising? Should I be refinancing my mortgage in rising interest rate conditions? What are interest rates? These are all questions that the majority of people will find themselves trying to answer over their lifetime. Having an idea of how markets work and how current affairs can affect world economies may shed some light on the optimal solution to some of these questions.
With all that said, I've come up with a few good books that I believe are extremely helpful for anyone looking to become more efficient at managing their money, beginner or experienced:
1) The Intelligent Investor - by Benjamin Graham
This book provides the premise behind value investing (aka what Warren Buffet does) and how to properly execute this type of investing strategy, while ignoring speculation and human emotion that so often drives investing decisions.
2) One Up on Wall Street - by Peter Lynch
This book focuses on buying and selling stocks and how to ensure you are purchasing a good holding based on company fundamentals, and how to efficiently manage a stock portfolio.
3) The Only Game in Town - by Mohamed A. El-Erian
This book talks about central banks around the world, their role and purpose around economic policies and management within the relevant jurisdiction in which they reside, and it also gives insight into the future roles and pitfalls of central banks and how the next future global financial collapse can be avoided.
4) The Millionaire Next Door - by Thomas Stanley and William Danko
This book captures a compilation of research done by the authors around American millionaires and the "secrets" and successes they have experienced or executed in an attempt to become financially independent. The book also shows how more common it is to find these everyday millionaires amongst the blue collar middle class due to smart spending and saving habits, and less so amongst white collar communities because of the lack of spending and saving habits.
5) The Big Short - by Michael Lewis
Although this book is a bit harder to read because of it's sophisticated finance jargon and trading lingo, this read sheds light on what activities led up to the inevitable 2008-2009 financial crisis, why it happened, and what major parties were responsible for this black swan event. The book is written through the eyes of factual character portrayals that were actively involved in the investing community across the US at the time, and who profited immensely from the economic collapse.
And there's more!... Any beginner scholastic book or post secondary textbook regarding finance, investing, or money management are always a handy tool to have in your pocket for reference. Yes, this includes "Investing for Dummies", "Economics for Dummies", and "Finance for Dummies". These kinds of books are actually really good at laying out the fundamental principles behind these areas of expertise, and provide essentially the same groundwork that someone would learn in an MBA finance or economics course.
Don't be shy to expand your financial acumen and grow your general knowledge base around investing and money management, even if you don't actively manage your own investments. It never feels good being ignorant around simple money matters when talking with your investment advisor about retirement plans, or talking with your bank about optimal mortgage choices given your household income, to name a few scenarios.
You don't want to be the person at a party trying to chime in on a conversation around interest rates and ask, "Wait so is a high interest rate mortgage better than a low interest rate one?"