A couple of weeks ago I received the most flattering email about my work on Weakonomics since I started about a year ago.  The gentleman that sent this message also took the opportunity to ask some questions about finance, and business as a whole.  To protect his identity, I’ve changed his name to Sam.  Sam writes:

I work as an auditor with one of the big four. Your blog has a lot of knowledge and considering that you are in your young 20’s, I am amazed at how were you able to understand the financial industry and how it works to the level you do. I received a solid foundation from my Alma Mater but being in the business world, I am surrounded by people far more intelligent than me and I was wondering what recommendations would you have for someone in their young 20s on investing, 401k or the financial  industry as a whole not just for educational purposes, but also for job purposes? Do you have any recommendations on books or so forth?

Sam’s alma mater is one of the most prestigious undergraduate business schools in the country.  He certainly went to a better business school than I did, so I think he knows more than he gives himself credit for.  But like many people starting their careers, Sam is looking to expand his knowledge of money.  For the first time in our lives, we leave college and all of a sudden find ourselves managing thousands of dollars a year.  It’s saddening that there aren’t more people looking to educate themselves like our friend Sam here.

So let’s help Sam get some clarity.  His first question has to do with investing and retirement.  I think it’s important that we also address debt reduction strategies as well.  Sam may not owe any money from school or cars, but there is someone out there that does.  The most effective debt reduction strategy in my opinion is Dave Ramsey’s Debt Snowball.  Dave has a multitude of books, and I suggest you pick up The Total Money Makeover.  As a bridge for establishing a debt reduction strategy to investing, I recommend Suze Orman’s The Money Book for the Young, Fabulous & Broke.  In it you learn all about the various aspects of personal finance, because there is more to it than debt and investing.

Now for investments. The most simplistic recommendation I would have is to invest in mutual funds and make sure you get the full company match in your 401(k).  This is free money and you don’t want to turn it down.  Outside of a 401(k) you would want to likely set up a Roth IRA as well.  You will learn about them both in Suze’s book.  When you’re ready to learn more about investing, I suggest you start with The Bogleheads’ Guide to Investing and then read A Random Walk Down Wall Street.  These will introduce you to the world of investing, and from there you can branch out.

As for business in general, there is no substitute for experience.  Sam has a great job that looks fantastic on a resume.  If he wants to climb up in his industry he certainly can.  Branching over into another part of the financial sector won’t be very hard (present economic situation excluded) because the financial firms want to hire people from all backgrounds.  I work at a bank and have a finance degree, but my peers have psychology, sociology, and computer science degrees.  We feed off of eachother quite well.  If you want to read some books to learn more about business, I suggest you start with The World is Flat.  There is no better book to illustrate the world picture, and where we’re headed in the next few decades.  Beyond that your reading would need to be specific to the businesses you want to learn more about.  There is a website called personalMBA.com and they maintain a list of the 77 Best Business Books.  I don’t find it to be a replacement for a MBA, but it’s a great reading list.  I haven’t read them all (very few of them) but you can always read the reviews of them on Amazon and see what is worth your time.

For additional educational topics on my site, please check out my on-growing series, “College of Weakonomics.”

Now the real reason I didn’t just send Sam an email back was I wanted to “crowd-source” my answer.  Many of my readers out there are smart cookies themselves.  Readers, please include links and books and advice below that will help Sam, or anyone else, get started in this crazy world.

By The Weakonomist

The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics.

categories: books, college of weakonomics, investing, personal finance