The Little Book of Common Sense Investing by John Bogle

John Bogle, the founder of Vanguard and inventor of the index fund, wrote The Little Book of Common Sense Investing as the clearest argument for low-cost passive investing. At under 200 pages, it is the most concise treatment of the most important financial insight of the 20th century: that the average investor captures the market return minus costs, which means minimizing costs directly maximizes returns. The arithmetic is irrefutable. Bogle shows that over 30 years, the difference between a 0.05% expense ratio index fund and a 1.0% actively managed fund on a $100,000 investment compounds to over $200,000 in difference. The book is best read alongside A Random Walk Down Wall Street — Malkiel explains why markets are efficient, Bogle explains what to do with that knowledge.