20 Essentials for Achieving Financial Literacy

12. Stigum's Money Market by Marcia Stigum and Anthony Crescenzi: Written by the late Marcia Stigum, the latest edition was updated and edited by Anthony Crescenzi, a RealMoney.com contributor (see "Money Market Magic"). This book is a very comprehensive overview of the banking system, money markets and fixed-income securities.

Historical Literature

There are several works of historical literature that have opened up the inner workings of Wall Street to the general public. Gaining insider knowledge of how Wall Street really works will benefit both individual investors and students, especially those students who are looking for internships or post-graduation jobs. I believe the following titles are must-reads, and some are even required reading for my students.

13. Confession of a Street Addict by James Cramer: If you want to know what it's like to manage money, then read this book. Money managers take various forms: Mutual fund managers, pension and endowment managers, separate account managers (which is my business model) and hedge fund managers. Each of one of these types of money manger has to deal with the intense pressures of performance and beating investor expectations -- achieving certain objectives is critical, and you can learn a lot about how it's done.

14. When Genius Failed by Roger Lowenstein: This is the story behind the fall of Long Term Capital Management (LTCM). LTCM was a hedge fund that was far too overleveraged and was rescued by Wall Street firms and the Federal Reserve before it nearly took down the entire world's financial system.

15. Blood on the Street by Charles Gasparino: Find out what went wrong with Wall Street market research during the tech bubble (see "Investment Research: Ignore the Ratings, Read the Reports").

16. The Predators' Ball by Connie Bruck: The story behind the rise and fall of Drexel Burnham, Michael Milken and the junk bond market in the 1980s. This story will give you an excellent perspective on how mergers and acquisitions (M&A) are financed and the way in which Drexel Burnham went too far in its efforts to control the M&A and junk bond markets.