Building Financial Knowledge - How?

[delays]

Dear PH,

I've been dipping in and out of this forum for a short while now, and after reading Rich Dad, Poor Dad by Kiyosaki (after a recommendation in one of the Finance threads), I've decided I'd like to build my financial knowledge to the level I can start making educated judgements on financial products rather than the current "spend it or stick it in the bank" model.

This I know is no overnight process, however I'm looking for recommendations of books to read, as well as daily websites and blogs that give an insight into Finance and the stock market. My aim is to slowly and surely build up my knowledge over time.

So, PH, where to start and what do you all recommend? It seems a fairly simplistic request, I'd imagine, and certainly very wide, but I'd be appreciative of some ideas.

[dalenorth]

Read ''the snowball'' by Warren Buffett.

The book is a real education

[Timmy35]

Moneyweek is a very good and readbale magazine IMO. And using the website you can basically get 99% of the content you get from the actual magazien but for free. Read it every week for 6m and you'll be surprised what you pick up.

[CaptainSensib1e]

Timmy35 said:

Moneyweek is a very good and readbale magazine IMO. And using the website you can basically get 99% of the content you get from the actual magazien but for free. Read it every week for 6m and you'll be surprised what you pick up.

+1 great magazine.

[jeff m2]

CaptainSensib1e said:

Timmy35 said:

Moneyweek is a very good and readbale magazine IMO. And using the website you can basically get 99% of the content you get from the actual magazien but for free. Read it every week for 6m and you'll be surprised what you pick up.

+1 great magazine.

Then realise that a lot of other people are reading this too.

This will influence what they do.

Now decide what you will do!!!!

[Sideways Rich]

Naked Trader is a good intro to shares. Worth a read.

[Timmy35]

jeff m2 said:

CaptainSensib1e said:

Timmy35 said:

Moneyweek is a very good and readbale magazine IMO. And using the website you can basically get 99% of the content you get from the actual magazien but for free. Read it every week for 6m and you'll be surprised what you pick up.

+1 great magazine.

Then realise that a lot of other people are reading this too.

This will influence what they do.

Now decide what you will do!!!!

I always found MW to be good in that unlike for example IC it was less of a direct tipsheet, more a mix of investment advice, tips, trivia, the how to spend it section. More a general education in finance as the OP wants.

[Newc]

Can't go wrong with reading the FT every day. It will not only give you the rhythm and flow of the markets and business, it'll show you what an actual newspaper looks like as opposed to the dreary nonsense that is the rest of the UK press.

[jeff m2]

Timmy35 said:

jeff m2 said:

CaptainSensib1e said:

Timmy35 said:

Moneyweek is a very good and readbale magazine IMO. And using the website you can basically get 99% of the content you get from the actual magazien but for free. Read it every week for 6m and you'll be surprised what you pick up.

+1 great magazine.

Then realise that a lot of other people are reading this too.

This will influence what they do.

Now decide what you will do!!!!

I always found MW to be good in that unlike for example IC it was less of a direct tipsheet, more a mix of investment advice, tips, trivia, the how to spend it section. More a general education in finance as the OP wants.

I agree, I was just attempting to stir peoples grey matter

With regard to Snowball (the book) nice read but not a lifestyle I would choose, I don't think he got laid 'til he was 30.

For a more in depth and eye opening look at the markets try "The Street Addict"
I guarantee you will never buy another share without checking the short ratio

[delays]

A bit of a "thread resurrection" - however, thanks to all who posted advice.

[budfox]

"Rich Dad Poor Dad" is a total fabrication: http://www.johntreed.com/Kiyosaki.html

[someday]

http://monevator.com/

[delays]

hornet said:

Would a better approach be to first study how to read company accounts and how to use the various ratios and measurements to compare potential investments, be it companies in a sector or whole sectors themselves? I'm sure the publications mentioned are fine, but I can't see the logic in looking for advice from such without first possessing basic knowledge yourself, otherwise you're really just trusting someone else's opinion, which is always going to be skewed by the fact they're trying to sell you something.

For me, understanding things like EPS, P/E ratio, dividend cover, quick ratio and gearing would be a good place to start. You don't need to be able to calculate them from the accounts, but IMO you should certainly understand what they mean and how useful they are.

Thanks for this.

[marsred]

Sorry to thread hijack, but have any people here with a financial or investing background ever done anything, or heard of anything being done, to help better educate the average person, or better still school leaver, about financial products such as savings and investment vehicles?

[Rovinghawk]

delays said:

So, PH, where to start and what do you all recommend? It seems a fairly simplistic request, I'd imagine, and certainly very wide, but I'd be appreciative of some ideas.

I can't suggest good literature but I can give you these obvious points to bear in mind regardless of the more sophisticated advice:

Don't put the eggs all in one basket

Hear all, trust nothing

Read the small print very carefully.

I know this is basic, but's amazing how many fail to remember them.

[LeoSayer]

http://www.amazon.co.uk/Your-Own-Financial-Adviser...

[jumpingjackdan]

marsred said:

Sorry to thread hijack, but have any people here with a financial or investing background ever done anything, or heard of anything being done, to help better educate the average person, or better still school leaver, about financial products such as savings and investment vehicles?

As an ex-city boy I think the industry likes to pretend that the world of finance is far more complex than it really is. The banks don't want to educate people, they like people not fully understanding how things work so they can charge them big fees for basic advice and exploit them. For example, when you try to transfer money and the bank says it will take 1 day, that's bks, all the bank does is whack your money into the money market and make some interest on it for 24 hours. There is no technical reason that the money cannot be sent straight away - they just take the piss.

Indeed, there are some very complex products out there such as derivatives, swaps, options that the average man on the street will not understand but with a few google searchers you will beable to gain a rudimentary understanding.

If you want to improve your knowledge, decide firstly what you want to improve you knowledge in. There are lots of financial products and to become an expert on all is not really possible due to the constant changes and diverse nature.

Take a look at www.cisi.org and https://secure.cfauk.org/qualifications/imc-exam.h... if you want to take a basic exam in some broad financial qualification.

[Timmy35]

jumpingjackdan said:

Indeed, there are some very complex products out there such as derivatives, swaps, options that the average man on the street will not understand.

But even these, if you strip off the thick covering of bullst applied by traders to make them seem complex are infact very simple products/concepts.

IMO the most powerful thing anyone can get to grasp as an investor rather than a trader is twin concepts of compounding and discounting.

1+r^n is such a small simple formulae, so useful/powerful! No one should leave school not knowing it.

[marsred]

jumpingjackdan said:

marsred said:

Sorry to thread hijack, but have any people here with a financial or investing background ever done anything, or heard of anything being done, to help better educate the average person, or better still school leaver, about financial products such as savings and investment vehicles?

As an ex-city boy I think the industry likes to pretend that the world of finance is far more complex than it really is. The banks don't want to educate people, they like people not fully understanding how things work so they can charge them big fees for basic advice and exploit them. For example, when you try to transfer money and the bank says it will take 1 day, that's bks, all the bank does is whack your money into the money market and make some interest on it for 24 hours. There is no technical reason that the money cannot be sent straight away - they just take the piss.

Indeed, there are some very complex products out there such as derivatives, swaps, options that the average man on the street will not understand but with a few google searchers you will beable to gain a rudimentary understanding.

If you want to improve your knowledge, decide firstly what you want to improve you knowledge in. There are lots of financial products and to become an expert on all is not really possible due to the constant changes and diverse nature.

Take a look at www.cisi.org and https://secure.cfauk.org/qualifications/imc-exam.h... if you want to take a basic exam in some broad financial qualification.

Thanks for the reply. I probably should have mentioned why I was asking... I've worked in investments for 15 years and am now powerfully built with multiple directorships .

I don't work for a large bank though, so I actually think it would be a good thing if more people understood the products they are most likely to be exposed to. I know schools are now required to give some financial training of some sort, so I wondered if any industry professionals on here had provided it, or knew anyone that had. I'd be interested in giving something back you see