My best reads on capital, investment, risk and uncertainty

It is only natural, as an economist, that I have a reasonable interest in capital. In understanding capital; how it is accumulated, shared, gained, won, put to active use, running idle, inherited, and eventually lost (by either you or your heirs).

~This post contains affiliate links, meaning, at no additional cost to you, if you click through an affiliate link and make a purchase, I may make a commission~

I also think that for most of you with a financial independence ambition/ early retirement ambition have a natural interest in understanding more throughly the concept of capital with a more long term view then the quarter to quarter view that dominates the corporate capitalism of the 21st century.

Here I will share to good books that will hopefully open your mind to more facets of capital then the next dividend.

Capital in the 21st century by Thomas Piketty.

I know that (one of ) the original aims of Mr. Piketty was to do a genuine investigation of how capital is increasingly concentrated with the economic elite, and that in today’s world your fortune will increasingly not be the result of you own hard work, but instead wealth that is passed on to you by either inheritance or marriage luck.

In my opinion, as someone with a genuine interest in all above mentioned aspects of capital, I actually think the best part of the book is that it enables such a long term view of capital. That capital potentially stretches much longer then you own lifespan, and forces you to investigate your own longer term capital accumulation motives.

This is well placed among a profession of economist where concepts of lineage, inheritance, and altruism is left with very little room compare to the quarterly corporate capitalism.

Investment under uncertainty by Dixit and Pindyck

A great book for understanding the risks associated with large capital investments.

This book completely diminishes the standard business school NPV understanding of investments, and applies a rigorous real option framework methodology for understanding and examining the risk associated with investment opportunities and possibilities. Further to this, it develops the hole real option concept of investment opportunity, investment flexibility, irreversibility and mothballing of investments.

Skip all the heavy math, and just read it for all its rich economic insights. Enjoy.

PS. I might add more later in, as I investigate my book stand.

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That would really be helpful, as I am trying to write this blog anonymously. Thank you 🙏.

 

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