Important information - the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

It’s always interesting to see what other people are reading, especially when it comes to money. A quick scan in the Amazon personal finance section and the usual titles secure the top spots time and time again.

And with 2024 just round the corner, there’s no better time to brush up on your investment knowledge.

So, here are three top-selling books from Amazon’s personal finance section.

1. The Psychology of Money: Timeless Lessons on Wealth, Greed and Happiness, Morgan Housel

Wherever you are in your investing journey, the fascinating world of behavioural psychology - a branch of psychology that studies human behaviour and how to change it - is full to the brim with pearls of wisdom.

The Psychology of Money features 20 chapters on topics such as getting wealthy vs. staying wealthy, luck, and risk, saving money and the seduction of pessimism.

Each chapter is packed with colourful stories, from your average joe, academics, and famous people. Some make it big; some fail spectacularly. All the stories emphasise that doing well with money isn’t just about what you know, it’s about how you behave.

In the opening chapter of the book, Housel references Ronald Read, an ordinary janitor born in rural Vermont who ended up investing in blue chip stocks. At the end of his life, Read was able to leave $2 million to his step kids and over $6 million to his local hospital and library.

He juxtaposes this story with the story of Ronald Fuscone - a Harvard-educated, Merrill Lynch executive with an MBA. Despite his obvious intelligence, Fuscone wasn’t as successful as Read. He borrowed heavily to expand his 18,000 square foot home in Greenwich, Connecticut and when the financial crisis happened, he was left bankrupt.

Housel said that these stories happen because of two explanations. “One, financial outcomes are driven by luck, independent of intelligent and effort. Or two (and I think more common) that financial success is not a hard science. It’s a soft skill where how you behave is more important than what you know.”

The author’s fascination with the psychology of money stemmed from writing about finance in early 2008 - the year of the financial crisis and the worst recession in 80 years.

“The more I studied and wrote about the financial crisis, the more I realized that you could understand it better through the lenses of psychology and history, not finance.”

He finishes his opening chapter with a powerful quote from Voltaire, a French writer - “History never repeats itself; man always does. It applies so too well to how we behave with money.”

2. Rich Dad Poor Dad, What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! Robert T. Kiyosaki and Sharon Lechter

This best-selling book takes a slightly different approach compared to Housel. First published in 1997, Kiyosaki emphasises the importance of financial literacy and building wealth. Still, it is underpinned by behavioural psychology.

As you can guess from the title, the book is based on the author’s two dads. The ‘rich dad’ he references to, is his best friend’s father who accumulated wealth due to entrepreneurship and investing. The ‘poor dad’ he mentions is supposedly Kiyosaki’s father who worked hard but never attained long-term financial security.

A quick skim through the book and the eighth chapter ‘Overcoming obstacles’ may be of relevance even if you’re the most sophisticated investor.

“Once people have studied and become financially literate, they may still face roadblocks to become financially independent.”

According to Kiyosaki, there are five reasons for this - fear, cynicism, laziness, bad habits and arrogance.

Focusing on ‘fear’, Kiyosaki writes, “My rich dad understands phobias about money. Some people are terrified of snakes. Some people are terrified about losing money. Both are phobias he would say. So his solution to the phobia of losing money was this little rhyme. If you hate risk and worry…start early.”

His point emphasises the power of emotions on investing and how with a bit of self-awareness you can work with them rather than against them. And if you’re lucky to have time on your side, there are benefits to starting early.

3. The Intelligent Investor, Benjamin Graham

“I read the first edition of this book early in 1950, when I was nineteen. I thought then that it was by far the best book about investing every written. I still think it is.” That’s a sound review from Warren Buffett, one of the world’s most renowned investors.

First published in 1949, and then updated periodically, The Intelligent Investor is a guide to value investing written by British-American economist Benjamin Graham.

It focuses on key investment principles, investor attitudes as well as touching on the historical patterns of financial markets, running back over many decades.

That’s because, “Those who do not remember the past are condemned to repeat it,” as Spanish-American philosopher George Santayana once said.

For the chart and graph nerds out there, this book is packed with them.

In chapter 6, a bar chart titled ‘The Faster You Run, The Behinder You Get’ shows some research from Brad Barber and Terrance Odean. The pair divided thousands of traders into five tears based on how often they turned over their holdings. Unsurprisingly, those who traded the least kept most of their gains. Traders who were labelled ‘impatient’ and ‘hyperactive’ were more likely to lose returns.

Graham powerfully uses data to reinforce how our psychology can influence our decision making.

“Our brains are hardwired to get us into investing trouble; humans are pattern-seeking animals,” writes Graham.

Funnily enough, the book even features an ‘Investment Owner’s Contract’, that acknowledges that you will be tempted to sell investments because they have gone down or that you may be influenced by herds of people to make your financial decisions.

To counteract this, Graham encourages you to save regularly - one of our five investing principles too - and to invest additional amounts when you can afford to.

It’s a brilliant way to show that while our emotions will inevitably influence our decisions, investing regularly can help you take the emotion out of investing. That’s especially important when you’re looking to build long-term wealth.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

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