The Financial Literacy Hierarchy, Best Money Books, and How to Invest in Crypto
In the latest episode of the Wealthy Behavior podcast, I spoke to Caleb Silver, Editor in Chief at Investopedia. We discussed:
- Investopedia and why it’s a great resource for financial information
- Financial literacy basics you must learn and the stepping stones to elevating your personal finance knowledge
- Best personal finance books to read
- How and why to invest in crypto if you’re considering it
- What he sees in the market and economy right now
Below are some highlights from the conversation condensed for clarity. Full episode available through link in title and wherever you get your podcasts.
Highlights
The Hierarchy of Financial Literacy
Early Building Blocks
- Starting early, it’s understanding needs versus wants. What do you want versus what do you need?
- Learning how compounding works in both directions, as in what does that interest rate on your credit card mean and how does compounding help your investment returns
- Difference between being a consumer and being an owner in that why just buy the brand when you can be an investor and own a piece of whatever that brand sells?
- Understanding how to build an equity portfolio and evaluate investments
Moving Up the Ladder
- Learning about good credit and bad credit to avoid the debt spirals that come out of bad credit and learning to make good credit work for you in your wealth building
- Budgeting and to see where your money is going and how some could be set aside to work for you in the future
Black Belt Territory (not necessary unless you have the skills)
- Market analysis
- Options and derivatives trading
- Building a multi-asset class portfolio
Other Topics
Don’t just invest, be an investor and understand what you own.
If you contribute to your 401(k) and get the match, that’s great, but how is that account being invested? You have to make those proactive decisions. Don’t just pick some random stocks, build positions and grow them over time and understand your cost basis.
Favorite Personal Finance Books
- A Random Walk Down Wall Street
- The Intelligent Investor
- The Richest Man in Babylon
- Just Keep Buying
Investing in Crypto
Caleb talks to a lot of people in his Editor in Chief role, and we discussed what he tells them about crypto.
He has a very small position (1%-2%) because he thinks it’ll help him understand it, he doesn’t want to put too much at risk, but he thinks Bitcoin will be here 10-20 years and that blockchain technology is important.
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