what is the best finance book available for people learning to make the best financial decisions?

Question

I want to learn how to calculate compound interest, effective interest, return on investment, etc. For example, should I pay my mortgage first or invest the money? When does it make sense to borrow to free up cashflow? I am specifically interested in the math that supports the decision making process.

Answer 1

"A Random Walk Down Wall Street" would specifically address your needs with regard to math. "A Random Walk Guide to Investing" is a good book and would suffice for most people, but wouldn't have the emphasis on math that you desire.

Personally, I like "The Only Investment Guide You'll Ever Need" by Andrew Tobias. It too is a little lighter on the math than I think you'd like, but it gives a very good overview of the different kinds of investment vehicles available and what the risks vs. rewards are for each. Of course, all the math in the world won't help you determine what your risk tolerance is; formulae can only get you so far. This book helps you determine that, and risk tolerance is to a large degree what you should base your financial decisions on.

Answer 2

Two books immediately come to mind. They are both written by Burton G. Malkiel. The first and simpler one is: "The Random Walk Guide to Investing."

If you don't mind a more complex and academic explanation of the whole investment field, he has also written the classic: "A Random Walk Down Wall Street."

Armed with either of those two books, you will know as much ore more than most financial planners.

Answer 3

I don't know about a book that talks about "the math that supports the decision making process" But I would strongly recommend any book by David Bach, like "One Minute Millionaire" or "Start Late Finish Rich" The titles sound like get rich quick books, but they're not. He's on the #1 best seller list for several books and I've seen him on several talk shows. He gives very good sound advise on just about anything you can think of that pertains to money.

Answer 4

random walk down wall street