What made you realise investing was for you?

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Everybody has a different background. A limited number of people are born in a family with a fair knowledge about investing. I mean, I think we were schooled by our parents and grandparents about the importance of saving money. And keep it in the bank to get paid interest. Thatā€™s a sound starting point but incomplete.

How about investing?! When did you realise you could benefit from investing? What was the trigger? Was it a specific event? An auntie that told you?..

In my case it happened to be an accident. Kind of. It was August 2015. I was surfing YouTube for entertainment purposes. By that time I had asked YouTube and Google about ways to make money so many times I lost count. One day YouTube puts on the top of the list of videos for me to watch a lecture by Warren Buffet

I watched it and, to my surprise, I felt I understood what he was talking about. At that moment I stopped believing investing was beyond my reach. Till that moment I thought investing was reserved for maths geniuses. Watching that video made me realise I too could benefit from investing. It prompted me to search and learn. I took notes and made searches based on those notes. From there I found value investing, Benjamin Graham, Philip Fisher, Charlie Munger, growth investing, compounding interest, quality investing, fundamental analysis, Joel Greenblatt, Seth Klarman, Mohnish Pabrai, John Bogle, Morningstar, passive investing, active investing, generational wealth, Howard Marks, Freetradeā€¦

While searching for things to read in order to educate myself on the subject of investing I came across, somewhere in 2016, The Buffett Partnershipsā€™ Letters to Shareholders. These go from 1957 to 1970 and refer to the beginning of Warren Buffettā€™s investing career prior to his exclusive dedication to Berkshire Hathaway. In those letters I was stunned by what I read under the subtitle ā€œThe Joys of Compoundingā€.

Quote:

ā€œThe Joys of Compounding

I have it from unreliable sources that the cost of the voyage Isabella originally underwrote for Columbus was approximately $30,000. This has been considered at least a moderately successful utilization of venture capital. Without attempting to evaluate the psychic income derived from finding a new hemisphere, it must be pointed out that even had squatterā€™s rights prevailed, the whole deal was not exactly another IBM. Figured very roughly, the $30,000 invested at 4% compounded annually would have amounted to something like $2,000,000,000,000 (thatā€™s $2 trillion for those of you who are not government statisticians) by 1962. Historical apologists for the Indians of Manhattan may find refuge in similar calculations. Such fanciful geometric progressions illustrate the value of either living a long time, or compounding your money at a decent rate. I have nothing particularly helpful to say on the former point.ā€

End of quote.

Warren Buffett, Letter to Shareholders - The Ground Rules, January 18 1963

Quote:

ā€œThe Joys of Compounding

[ā€¦]

Francis I of France paid 4,000 ecus in 1540 for Leonardo da Vinciā€™s Mona Lisa. On the off chance that a few of you have not kept track of the fluctuations of the ecu 4,000 converted out to about $20,000.

If Francis had kept his feet on the ground and he (and his trustees) had been able to find a 6% after-tax investment, the estate now would be worth something over $1,000,000,000,000,000.00. Thatā€™s $1 quadrillion or over 3,000 times the present national debt, all from 6%. I trust this will end all discussion in our household about any purchase or paintings qualifying as an investment.ā€

End of Quote.

Warren Buffett, Letter to Shareholders - Our Performance in 1963, January 18 1964.

I now knew investing was for me. I also knew I could benefit from compounding and from time in the market. Although being on a low income, I knew I could build generational wealth. Even if it would take 200 years after my death. All I had to do was to plant a seed

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Honestly it all started for me when my Son was born & just taking the Risk (After reading the entire Investopedia Website)

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I was taught about it as part of GCSE Business Studies.

Story time? Story time;

I think for a week or so we did financials and investments as a scenario to examine how stocks worked etc. Nothing too in-depth, but it was cool.

I remember going home demanding to be bought the financial papers so we could get started investing as a family!

My parents are both uneducated though, and unfortunately were dismissive of the idea and had no understanding of it themselves, so naturally took zero effort to bother to learn. A common theme unfortunately, something I had to deal with and Iā€™m sure many others of my generation did as well.

So, I never got to put that newfound knowledge to the test. I invest now as the FT app is convenient and there isnā€™t eye-watering fees wasting your investments.

As for the lessons I learned from that situation? I know for sure if I do have kids Iā€™ll be more open-minded, especially about what they learn in school and in regards to fostering their interests as just imagine had I started chipping away at the stock market from the ages of 18 onwards even with the small amounts I could manage back then.

Live and learn as they say. :slight_smile:

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Not being able to afford a house

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I was always put off by people describing it as ā€œgamblingā€, which it is to some extent, but got into it when I realised that it can more poker than roulette, as in, you can hone skills that makes you more likely to win, if that makes sense?
Also, the kinds of skills investing teaches you are pretty useful skills to carry accross into everyday life and has given me a basic understanding of the financial/business world that has been quite helpful in informing career decisions too.

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When you realise that society will most likely undervalue your self-worth. You can either sit down and moan or do something about it.

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For me itā€™s when all the savings rates plummeted from near 2% to 1% and then to below 0.5%. At that point, there was no point having my money sitting around losing relative to inflation, so I decided to start investing.

However, the reason Iā€™ve been so averse to stocks up until now is that the last time I tried, it was all wiped out in the dotcom bubble, back when all I had left over each money after bills was Ā£100-Ā£200, and after saving it all instead of spending it on fun things and seeing it all wiped out anyway put me off the stock market. I still saved, but only in savings accounts, and for the 10 years when current accounts were all paying 3-5% that seemed an acceptable rate of return for zero risk.

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