Reddit mentions of A Random Walk Down Wall Street: Completely Revised and Updated Edition

Off the top of my head, in no particular order:

The Undercover Economist: Easily the best of those "Economics in everyday life - books"

The Blank Slate: Steven Pinker on the nature/nurture debate. This really opened my eyes on questions like "Why are the same people who fight against abortion for the death penalty", for example.

Complications: This and his second book, Better, gave me an incredible insight into medicine.

Why we get sick: Very good explanation of the defence mechanisms our bodies have and why treating symptoms can be a very bad idea.

How to read a book: An absolute classic. Turns out I've been doing it wrong all those years.

The Art of Strategy: Game Theory, applied to everyday situations. Always treats a topic like Nash equilibrium, Brinkmanship etc. theoretically and then goes into many examples.

A Random Walk Down Wall-Street: Made me see the stock market completely differently.

The Myth of the Rational Voter: The shortcomings of democracy.

The White Man's Burden: Fantastic account of the problems faced by the third world today, and why it is so hard to change them.

Read A Random Walk Down Wall Street. Best investment advice for a non-wall street type.

First, I feel like I was in the exact same place you were when I was 15, back in 1997. However, I didn't listen to my parents when they gave sound advice about saving and investing. Luckily, I managed to turn things around by the time I was about 25. Now, I've got over $200K invested and saved and my wife and I just got back from an eastern Europe road trip over the xmas break and didn't have to think twice about money. We still make a budget for everything and spend as little as we can.

Here are the 4 pillars of finance. They are all equally important and you need to know what part they all play.

• Banking
  
• Savings
  
• Budgeting
  
• Investing
  
  This book will be a great introduction for you. You can get it used on Amazon for $10, or better yet, try to find it at your local library, or your school library.
  
  When I was 15, I made minimum wage by working at a fast food restaurant, great way to get money. I usually spent all that money on taking my girlfriend out on dates to restaurants and movies, and on gas for the car and the car payment itself. It will be difficult, but staying single will save you a lot of money. Or, splitting the bill on dates will at least help. If you have to buy stuff, try to buy it used. The best way to accumulate money is to only spend it when you absolutely have to.
  
  
• You don't need an awesome car, just a cheap one that will get you around or a bike if your town is conducive. Take the bus, or car pool with friends as much as you can to save on gas.
  
• If you're out with friends, don't spend money if you don't have to, or at least only spend a little on cheap stuff, like just a cheeseburger and water, not the $8 value meal. Your friends may look at you weird now, but they'll look back on it later and see how smart you were.
  
• You don't need awesome clothes, so don't waste your money on that. Same goes for gadgets, or at least try to buy them used, only if you must have it.
  
• Stay home as long as your parents will allow, even in college if you can.
  
• Before you start investing, become familiar with investing. You can read all you want for free at Investopedia. They have great videos too. The Motley Fool is not a great place for beginners, but this page is ok. Seriously, don't read anything else on that website, it's mostly BS.
  
• I'm not trying to ruin your childhood with these suggestions, but there are tons of free things you can do with friends or inexpensive things. You don't have to spend money to have a good time.
  
• Ask your parents if there are things you can do around the house for allowance. Ask them if they will give you your week of lunch money up front and let you keep it, even if you spend it on bread and lunch meat and take a sandwich everyday. Save that left over money! DON'T spend it on crap foods and candy in vending machines. It's not "extra" money to waste, it all adds up.
  
  As you get older:
  
  
• Credit cards can deplete you of all your money, very fast. DO NOT GO INTO DEBT. If you do get a credit card, do not use it unless you have the money to pay it off right away. This will ruin your life, not kidding. No amount of rewards points or "cash back" is worth going into even $1 of debt. When I was 15, I couldn't get a cell phone plan unless I had good credit. However, they did let me get the account if I could pay a deposit of $150. Hopefully, your parents will do this for you though.
  
• If you don't get a scholarship and your parents can't pay for college, DO NOT GO INTO DEBT by taking out student loans. Go to a local state college or community college and try to pay your tuition with cash. You might miss out on some of the cultural aspects of a university, but you'll still get your education and I've never been turned down for a job because I went to a community college instead of an expensive university.
  
• Once you've read up on the basics of investing, read this book, you can get it used for under $5 or free at your local library.
  
• Another great book that taught me a ton about accumulating wealth is The Millionaire Next Door. It might not all make complete sense right now, but it will demystify what it really means to be rich.
  
  Wow, this post got a little long winded. I've got plenty of other advice information that I've learned over the years. I'll try to post it later when I get a chance. Last bit of advice, as for investing, take your time, don't be in a hurry. Make sure you know what you're doing before investing your money in anything. Good luck!
  
  Edit: I just read the bit about you living in Finland and having free school. Rock on! I'll leave the advice about student loans and community college for others.

fool.com


thestreet.com


http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393325350

The first (and maybe last) book you need to read is this one:

http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393325350

This book operates under an assumption that you are an 'average' investor unwilling or unable to put in the time and effort (and gather all of the necessary resources) to become a 'professional' investor. From that assumption, it draws some pretty powerful conclusions that are well founded on other certain economic principles.

I don't work for Vanguard but I trust them.

If you are willing to read, try Boggle on Mutual Funds. And if you are extra ambitious, try A Random Walk Down Wall Street.

Index funds are a very good choice if you are just starting out. You are on the right track.

• If you want to invest rather than gamble/day-trade, you should read A Random Walk Down Wall Street - it's the closest you'll get to earning a finance degree without going to b-school.
  
  
• IGNORE the quoted average rate of return advertised by mutual funds. What they don't tell you is that they close the funds that lost money and then quote the average return of the funds that made good gains. Even in a completely random market, this strategy can be used to advertise funds with good returns.
  
  
• Diversify & minimize trading/management fees - ETFs are your friends.
  
  
• Allocation of assets among asset classes matters a lot more than the individual securities selected, i.e. your distribution among bonds / stocks / real estate / commodities is more important than which stocks, which bonds, etc. you buy (by importance I mean related to expected overall return and variance of that return).
  
  
• You are not smart enough to understand derivatives. At least the quants that get six figure bonuses aren't. And leverage is bad - avoid buying on margin like the plague.
  
  
• Transaction fees from trading DO count towards your overall return; don't think ignoring the cost of selling security A and the cost of buying security B, I made a great return.
  
  
• The younger you are & the more money you have, the more you can bounce back from losing money. Young/wealthy = common stocks & maybe real estate; Old/Poor = CDs, preferred stock, Triple-A Bonds. Allocate appropriately and adjust once a year. age and wealth are used as a proxy for risk aversion
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  Background/Experience: BBA in Finance. Wasted a little money on ETrade - my financial situation forced me to liquidate the account but after trading fees I wasn't doing well anyway. When I finish my master's (not in finance) I'm sticking w/ ETFs.
  
  Edits: playing with mark-down