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Recently I got a letter recently from a reader named Adam, who said:

My wife and I are about to finish long residency programs and start making money. I've never studied finance or investing and have no idea where to start.

Do you have any advice regarding good books to read or how to get the knowledge that I need to make informed decisions?

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I get a lot of letters like this, and here's what I would say:

First, if you are going to invest, it is absolutely critical that you learn as much as you can first. Learning about investing is actually not that hard, but it is not the sort of thing that you can do intuitively, either. So I would recommend putting your money somewhere very safe -- a high-interest savings account or a cashable GIC, for example -- and then spending as much time as you can educating yourself BEFORE you make any big decisions.

Here a few books that you may find useful:

No Hype, the Straight Goods on Investing Your Money is a straightforward guide that covers a lot of ground, and it's Canadian.

The same goes for Investing for Canadians for Dummies. Despite the title, this is actually quite a detailed book, running more than 400 pages.

Now, here are a couple of American books that are quite good

The first is The Elements of Investing, which is a comprehensive look at indexing. That's where you buy and hold low-cost funds that track broad stock market indexes.

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The second is The Investor's Manifesto. The author, William Bernstein, is a former neurologist who is also a fan of index investing.

Whether you decide to manage your own investments or use an adviser, you need to be armed with as much information as possible. The people who get hurt are the ones who don't take the time to educate themselves.

The best way to make sure that doesn't happen to you is to grab some books, and start reading.

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