GROW · VOLUME 1 OF 3 · FOUNDATIONSInvesting shelf
Investment Foundations
The first book to read on investing. It explains how compounding works, what stocks and bonds really are, how markets and orders work, how to choose a stock and bond mix you can hold through a bad year, and how to open an account and make a first low-cost investment.
Chapters7
Reading time40 min
Worked examples23
Updated2026-10-01
What you will be able to do
- Explain how compound growth works and estimate how long money takes to double.
- Describe what owning a stock or a bond means, and why bond prices fall when interest rates rise.
- Place a trade with the right order type and read a quote, including its spread.
- Choose a stock and bond mix that fits both your time horizon and how you react to losses.
- Pick an account and a simple, low-cost portfolio and set up automatic investing.
Contents
7 CHAPTERS · ABOUT 40 MIN- 01How Compound Growth Builds Wealth Why returns that earn their own returns make time the strongest lever you control, how to estimate doubling times with the rule of 72, why real returns matter more than nominal ones, and the four things that erode compounding.6 min4 computed
- 02What You Own When You Buy a Stock What a share of stock entitles you to, what moves prices in the short and long run, what US stocks returned from 1928 to 2025 and how often they lost money, and the valuation terms you will meet in the news.6 min3 computed
- 03How Bonds Work Bonds as loans you can sell: coupon, maturity and yield to maturity, why prices fall when interest rates rise, the main kinds from Treasuries to high-yield corporates, and when bonds cushion a stock portfolio and when they do not.6 min3 computed
- 04How Markets Work: Exchanges, Orders and Indexes Where trades happen, how market, limit and stop orders are filled and what each risks, how to read a quote and its spread, what the major indexes measure, and why headline market signals make poor trading guides.6 min2 computed
- 05Finding the Level of Risk You Can Live With The difference between the risk you can afford and the risk you can stomach, how time horizon changes the odds of a loss, what market falls look like in dollars, what a safer mix costs over thirty years, and a short self-check.5 min4 computed
- 06Building the Bond Side of a Portfolio How to choose bonds for the job they do: duration and matching it to when you need the money, credit quality and its trade-off, three common structures, bond ladders, and which accounts should hold bonds.6 min4 computed
- 07Getting Started: Accounts, Funds and a First Investment What to have in place before investing, which account to use under the 2026 limits, what to look for in a brokerage, three simple low-cost portfolios, how fees compound, and how to make and automate a first investment.6 min3 computed
CALCULATORS USED IN THIS BOOK