Warren Buffett spends about 80% of his working day reading, a habit that began in his youth. “Read 500 pages every day. That’s how knowledge works. It builds up, like compound interest,” Buffett advises. Seven key books shaped his investment philosophy and helped build his fortune from his youth and as a young man just getting started in the world of finance and business.
Here are the seven books that inspired a young Warren Buffett to become rich:
1. “One Thousand Ways to Make $1,000” by F.C. Minaker
Buffett discovered this Great Depression-era book at eleven years old, which ignited his entrepreneurial spirit. He reportedly “virtually memorized” it, absorbing its lessons on financial independence and compounding gains.
Young Buffett quickly applied these concepts, delivering newspapers, placing pinball machines in barbershops, and selling used golf balls before finishing high school. These early ventures taught him the value of reinvesting profits to build wealth, a principle that guided his investment and business career for the rest of his life.
2. “The Intelligent Investor” by Benjamin Graham
At 19, Buffett discovered “by far the best book about investing ever written.” He has stated, “Picking up that book was one of the luckiest moments in my life.” The book’s most valuable lessons came from Chapter 8 on market fluctuations and Chapter 20 on the “margin of safety” principle.
Graham’s concept of “Mr. Market”—an imaginary business partner who offers to buy or sell shares daily at different prices—taught Buffett to view market volatility as an opportunity rather than a guide. This helped him develop the emotional discipline to make rational investment decisions regardless of market sentiment. The distinction between investment and speculation became the cornerstone of his value-investing approach.
3. “Security Analysis” by Benjamin Graham and David Dodd
While “The Intelligent Investor” provided the philosophical framework, “Security Analysis” gave Buffett the technical tools to evaluate businesses. Published in 1934, this text taught him how to analyze financial statements and determine a company’s intrinsic value.
The book’s methods for examining balance sheets, income statements, and management quality showed Buffett how to look beyond superficial metrics. These analytical skills became crucial to his ability to identify undervalued companies with strong economic fundamentals. The emphasis on understanding long-term earnings power rather than short-term results shaped his patient investment style.
4. “Common Stocks and Uncommon Profits” by Philip Fisher
Fisher’s 1958 book introduced Buffett to the importance of qualitative factors and growth potential. After reading it, Buffett was so impressed that he sought out Fisher personally calling him at home. Phillip Fisher’s son, Ken Fisher, talks about answering these calls in an introduction to a book I read.
Fisher’s approach complemented Graham’s teachings by emphasizing factors beyond financial metrics. His concept of “scuttlebutt”—gathering information from multiple sources, including customers, suppliers, and competitors—influenced Buffett’s research methodology. Buffett has described his investment approach as “85% Graham and 15% Fisher,” showing how Fisher’s focus on high-quality, growth-oriented businesses expanded his investment horizons.
This influence is evident in Buffett’s investments in companies like Coca-Cola, where he valued strong brand and growth prospects alongside financial metrics. Fisher’s emphasis on exceptional management teams also became a key component of Buffett’s investment criteria.
5. “The Wealth of Nations” by Adam Smith
Smith’s 1776 text helped form Buffett’s understanding of market forces and competitive advantages. The book’s explanations of division of labor, market efficiency, and self-interest in economic decisions provided insights into how businesses create and maintain profitable positions.
Smith’s ideas about competitive markets helped Buffett develop his “economic moats” concept—sustainable advantages that protect a company from competition. By understanding these fundamental economic principles, Buffett gained insight into industry dynamics and factors that allow some businesses to thrive while others struggle.
This knowledge proved invaluable as he evaluated potential investments, seeking companies with sustainable business models in favorable economic environments.
6. “How to Win Friends and Influence People” by Dale Carnegie
Not all influential books in Buffett’s life were about investing. Carnegie’s classic on human relations helped the naturally introverted Buffett develop essential communication skills. At age 20, he took Carnegie’s course and still displays the certificate in his office.
In the HBO documentary “Becoming Warren Buffett,” he admits that Carnegie’s ideas helped him overcome his fear of public speaking—a skill that proved invaluable throughout his career. The book taught him how to connect with people, influence others, and build critical business relationships.
These social skills complemented Buffett’s technical knowledge, enabling him to communicate effectively with partners, shareholders, and the public. His ability to explain complex financial concepts in simple terms—a hallmark of his annual shareholder letters—owes much to Carnegie’s teachings. The people skills he developed helped him negotiate deals, form partnerships, and build trust with acquired businesses.
7. “The Great Crash of 1929” by John Kenneth Galbraith
Galbraith’s 1929 stock market crash analysis gave Buffett insights into market psychology and speculative excess. By studying one of history’s most devastating financial collapses, Buffett gained perspective on how markets can become disconnected from economic reality.
The book’s exploration of market bubbles and crashes helped Buffett develop his contrarian temperament. Understanding the patterns of market manias allowed him to maintain emotional discipline during periods of extreme volatility.
Throughout his career—during the 1987 crash, the 2008 financial crisis, and the 2020 pandemic market turmoil—this historical perspective helped him maintain a long-term outlook when others were panic selling.
The book’s warnings about speculative excess reinforced his conservative approach to leverage and his focus on businesses with solid fundamentals rather than market momentum.
Conclusion
These seven books formed the intellectual foundation of Warren Buffett’s investment philosophy. From Minaker’s entrepreneurial inspiration to Graham’s analytical framework, Fisher’s growth orientation, Smith’s economic understanding, Carnegie’s people skills, and Galbraith’s market psychology insights—each contributed unique and complementary aspects to Buffett’s approach.
The common thread through all these influences is the importance of independent thinking, rational analysis, and emotional discipline. Buffett’s lifelong reading habit continues because he understands that knowledge, like money, compounds over time. For aspiring investors, these seven books offer timeless wisdom that remains as relevant today as when Buffett first discovered them.