Let’s start investing
What’s Success? How do we measure it exactly? Is it about accumulating a lot of wealth, and being able to buy whatever one desires? Or is it about climbing the corporate ladder? Surrounding oneself with a lot of titles, fancy office space and a catchy position. Probably a 3 letter one starting with C.
It’s not that simple though. I don’t think it’s about money or fame or how one’s perceived by others. I think success is about freedom. Freedom to do what we want when we want. Freedom to choose who we work with. Freedom to take control of your time. One way or other it’s got something to do with time. After all, time is the most valuable commodity. So how do we win back our time?
One such way to win back your time is through investing. Investing is a great way to buy back your freedom. When done right, It helps you get rid of the money problem. Having this financial freedom is how you achieve other freedoms in life. Oh and remember, to win back your time, you first need to invest it in gaining the necessary knowledge and skillset that’ll help you become a better investor.
But the world of investing might look daunting for newcomers. Most people get scared just looking at the vastness of the investing world. They feel they might lose what they already have. What if they lose their life’s savings on a gamble? But is investing really a gamble? is luck really at the forefront of investment success? People often dismiss what they don’t understand as fate, luck, or even magic. But is there really a magic to investing or Can anyone invest and make decent returns. Can anyone curious enough achieve financial freedom through investing?
Well just a spoiler alert, Investing is no magic. Investing is simply a way to make wealth with your existing wealth. In simple words, it’s putting your money to work, just like you do. Remember your 9–5. how you grind all day long and somehow your boss seems to be the one making all the profits. It’s pretty much the same. Well, the only difference is you are the boss here and your wealth is your employee. The good thing however is that your wealth doesn’t have emotions or grudges. They won’t demand extra pay for overtime or get tired or complain. They simply work where you put them to work
So the real question here is. Where should you put them to work? Well, that’s up to you. There are tons of investing opportunities floating around. There’s the Stock market, real estate, precious metals, and much more. You just have to figure out what is it that you want to achieve. If you have a small amount of money but enough time you’re willing to invest in learning. I think the Stock market is a great place to start.
People often have this misconception that you need a big sum to start investing. It’s not true. Look at Warren Buffett, His first investment was a mere 114 dollars. Look where he is today. So the hardest part always is getting started. taking those first few steps. So here’s a few steps and tips for you to start your own investing journey.
Start with Saving
This might sound a bit cliche, but the first step to investing is saving. I know the inflation is high and yes, you do only live once. There’s a million reasons why you can’t save but there’s this one to save. It’s to get your financial freedom.
As a young guy in my twenties, I do have urges to do all these sorts of things that make it hard to save. But as it turns out, Saving is only a habit. just like any other of your habits. It takes a bit of self-discipline to get started but once you do. oh, you won’t ever go back. You don’t even have to save big. Save whatever you can. and slowly you’ll start wanting to save more. just remember, the more you save, the more you can invest.
Track your Personal Finance
I started tracking my personal finance a few months ago. It’s been very helpful. I use google sheets, just keep it simple I track my income, expenses, assets, and liabilities What are assets and liabilities you might wonder. let me put it in simple words. Anything that puts money into your pocket is an asset and anything that takes money out of your pocket is a liability.
I get so much out of it. I can easily track where my money is going and where is it coming from. I can see how much I’m spending on extravagance. I can identify places to cut my expenses. It’s especially very helpful if you’re having a hard time saving. It takes a while to get used to but it’s well worth it.
Treat yourself like a company. Analyze your finance. compare it with the previous month or the quarter. This will help you create a habit of looking around the financial statements. Perhaps create your own profit and loss statement and cash flow. so when you go checking the financial statements of other companies it comes in handy. I have a simple rule, The amount of dividend that you can afford to distribute is the amount you can spend in extravagance for the next month. This way I can limit myself from spending unnecessarily.
Finance is the language of investment so better you learn it. Remember we don’t need to know how Google works to be able to search for something on google. we just need to know how to search. It’s the same way with finance. You don’t have to be a financial analyst to understand basic finance. just learn to distinguish a good investment from a bad one.
Focus on the Long term
Most People who pitch you an amazing way to make money fast are here to make money off of you. Be smart, use your common sense. If making money was so easy, wouldn’t we all be sipping cocktails into the sunset somewhere around the equator. Don’t fall for this trap.
Think of the long term. What it means to be financially free for you. Believe me, It’s not the same for everyone. Someone might want to quit their 9–5 and have a relaxed life, while others might want to do what they love without worrying about the cost of living. Someone might want to send their kids to college or be able to afford a vacation every quarter. What is it that you want? Think on it for a few days. What kind of lifestyle do you picture yourself living in the next decade or two. Have long-term financial goals and try to reach your financial freedom but set realistic expectations and remember sometimes life happens so provision for bad situations.
Find Someone to talk to
I consider myself very lucky that I have two people in my life for this. I have a friend who invests. We started investing together and we often meet for evening walks and talk investing. I also have a maternal uncle who has been investing for a few years now. I call him occasionally and talk investing. Having them around gives me a lot of new prospectives. I learn things that I normally might not notice. I don’t ask them for investment tips but rather talk about investing in general.
This way you can keep up with what’s going on. But don’t overkill it. It’s okay to talk about investing with someone who has a good grasp and is curious enough to find out what they don’t already know. But talking to every other person about investing is a waste of your time. Be very picky about it. Remember, It’s something good to have. But it’s not necessary that you must have someone to talk to. It’s better to have no one than to have a bunch of people who don’t know what they’re talking about.
Don’t let the opinions of others drown your own inner voice. Make a habit of thinking for yourself. Don’t rely on tips, trust your research and facts. Sometime you’ll get it wrong. It’s okay. stick to it, learn from it and improve.
Read, Read, Read
Time is the most valuable commodity, Unlike money, once spent, you can never get it back. So learn to value your time. Use it like you use your money, very carefully. Put thoughts into where you’re spending your time and try to find places where you can cut back and invest in something worthwhile.
one of the best use of your time is reading. Reading a book, an article, or looking over some company finance is a great way of gaining some solid knowledge. I find that the information I gain from reading stays much longer with me than the ones I hear from someone or get from audio/video.
Reading is one of the best investments you can make with your time. Here’s some good material that I’ve found useful and still do. One of the best reading materials about investing on the internet is Varsity by Zerodha. It’s a structured educational content that has lessons on stock market basics, fundamental analysis, technical analysis, personal finance, and a lot more. This is an absolute gem. In terms of books, You can read the Intelligent Investor by the great Benjamin Graham himself. or Rich dad, Poor dad by Robert Kiyosaki to get you started.
Learning about investing, finance and the stock market is a lifelong journey. If you wanna be a great investor, You need to be curious enough to dig deeper, to go beyond the well-worn path that everyone else follows. Don’t rely on someone else to do your research, get your own hands dirty Don’t take the cheap short-cuts. always take the long way home