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Comment by sg0 | Hacker News Reader

I really like this article, although I don't fully understand most of the parts, mainly because I don't know much about brokerage and investment. But, I am joining the workforce soon, and it behooves me to have some grasp on these topics. Any non-Michael Lewis type book(s) you fine people would want to recommend?

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Read "A Random Walk Down Wall Street"

https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/13240...

I wish I had read it already at your age :)

Second this. Really drives home what the average person should be doing in the markets.

I also like "Are you a stock or a bond".

https://www.amazon.com/Are-You-Stock-Bond-Financial/dp/01331...

https://www.bogleheads.org/wiki/Main_Page is what you need if you're just joining the workforce. the details of how these large companies make their money is interesting, but tangential to your needs.

When you have cash to invest in stocks/bonds/etc, just put your money in an appropriate Vanguard fund and don’t think too hard.

The book I buy all of my cousins joining the workforce is I Will Teach You To Be Rich, which has an unfortunate title, doesn't teach you much about brokerages and investment options, but has the core right advice about personal finance management.

1. You don't need fancy investment knowledge. In fact, you should actively avoid fancy knowledge until you have a firm grasp on the dead simple stuff.

2. Retirement investments should be: simple and boring. Once you have a solid financial plan in place that meets those criteria go ahead and gamble with whatever extra money you have if you wish.

3. Read this book cover to cover. It is very boring and very useful. After that read whatever else. https://www.amazon.com/Personal-Finance-Dummies-Eric-Tyson-e...

Assuming you want to invest in equities (which can be a whole other discussion), the biggest mistake newbs make is waiting too long. Don't try to devote months to learning things, because even after doing that you won't know anything. Just sign up for an account somewhere (it's relatively painless) and start putting money into the appropriate Vanguard target retirement fund. You can always change your mind and reallocate later, but you can't go back and pick up on lost gains that you missed out on because you were too scared/intimidated/clueless to open a brokerage account. I have late-20s coworkers who have all substantially all of their assets in high-yield savings accounts (or worse) and it pains me to hear them say that, but hey, it's their money.

Think about whether your retirement has to be planned out, or if you can afford uncertainty. The latter allows you to plan to either get by in a small place and live with pretty much just the bare necessities, or, if lucky, end up not having to work anymore at 40 with a nice house payed in cash. Just decouple enough from localized risk. E.g., if you were in a smaller country with it's own currency, maybe try to avoid anything formally denominated in that currency, as it's not hedged against inflation and small countries tend to go to printing cash if they're broke. Only optimize for a good trade-off between risk-exposure and re-shuffling costs (in this case, brokerage commissions). The wider the spread, the less any localized event hits you. If you're spread on the world, GDP-weighted, you loose less than 30% if the complete north american region would collapse. International connections/dependencies between suppliers in industry affect this negatively, however.

Be careful about US and GB being rather overweight due to historic accumulation of financial institutions, which only really have an imaginary value not tied to any tangible assets. Thus market-cap weighting gives them a far bigger share of your assets than benefits you in hedging localized economic risk.

https://training.kalzumeus.com/newsletters/archive/investing...

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