Unlocking Wealth: My 2-Year Dive into Personal Investing - 3 Big Lessons Revealed!

As my second child entered the world, I made a big decision – I sold my company, which specialised in crafting corporate innovation education programs for Fortune 500 giants. With the proceeds from the sale and some hard-earned profits tucked away, my family and I found ourselves embarking on an early retirement journey. Suddenly, I had the freedom to dive headfirst into the captivating world of investing - a long term passion of mine.

With my little one snugly strapped to my chest or happily riding along in the stroller, I made investing my new full-time gig. My days were a whirlwind of devouring stacks of top investing books, delving into online courses, scouring blogs and articles, tuning into credible podcasts and YouTube channels, and even getting sucked into the occasional Bloomberg TV segment. I dipped my toes into various investment avenues – from property and crypto to funds and stocks – and, as you might expect, experienced the rollercoaster ride of quick gains and losses. But through it all, one goal remained crystal clear: to master the art of making money work for me, rather than me working for money.

As I plunged deeper into the world of investing, I couldn't help but notice the similarities to my previous adventures in innovation and entrepreneurship. It was a maze of complexity, brimming with baffling jargon and conflicting advice from so-called "experts." Yet, amidst the chaos, I began to discern patterns and principles that started to make sense. After a year of immersion and reflection, I unearthed some key insights that provided much-needed clarity and laid the groundwork for my own unique investment strategy.

So, while my journey into investing may have begun with a diaper bag slung over my shoulder, it has evolved into a thrilling quest for financial independence and mastery. And with every twist and turn along the way, I'm learning, growing, and inching closer to my ultimate goal.

Identify What Game You're Playing

In the midst of the constant buzz from the media about various investing scenarios, it's easy to feel overwhelmed. But amidst the noise, there's a signal that's truly relevant to you, and finding it is key. The best investors seem to have a clear vision of the game they're playing, sticking to a long-term plan that resonates with their goals.

For me, it all started with a simple question: Why am I investing? Is it for the thrill, or do I have bigger plans for the future? Understanding my motivations helped me define my purpose. Sure, I was already enjoying early retirement, comfortably covering our modest lifestyle expenses. But now, I dreamt of something more – a luxurious lifestyle in a decade's time, with the ability to give back through philanthropy. That dream became our guiding light, giving our investments a clear direction and meaning beyond mere financial gain.

Being in it for the long term is everything in this journey. Looking at historical data, it's evident that the stock market tends to trend upwards over time, despite occasional dips. That's reassuring, isn't it? It's like realising that patience pays off in the long run. So, I decided to embrace the marathon mindset – after all, investing isn't a sprint. One golden rule I learned early on: Don't invest money you might need in the next five years. It's a simple yet powerful principle that can shield you from unnecessary losses.

Once I had my purpose, goals, and timeline in place, I could focus on the kind of returns I needed to achieve them. Picture this: aiming for a million dollars in a decade with a $100K investment. It's not just about picking any asset; it's about choosing the right ones that can produce the kind of returns you need for your goals. In this scenario it would mean that the $100K would have to 10X over 10 years = 26% compounded annual growth rate. For me, it meant hunting for the next big thing – the future FAANGS, if you will. Imagine if I'd spotted Google, Apple, Amazon, Facebook, Netflix, Tesla, and Nvidia a decade ago – talk about a tenfold return!?

But it's not just about picking winners; it's about sticking to a strategy. I realised the importance of consistency in my approach. It's like staying true to your game plan, even when the temptation to stray arises. I've learned the hard way about the dangers of "style drift" – veering off course from my original plan and suffering losses as a result. That's why knowing the game you're playing is crucial. What's your style? What's your plan? And most importantly, what's the purpose behind it all?

Investing isn't just about numbers on a screen; it's about crafting a future that aligns with your dreams. So, as you navigate the world of investments, remember to keep your eyes on the prize and stay true to your game. After all, it's not just about winning – it's about winning with purpose.

Know What You Own.?

This investment principle holds a special place in Warren Buffet's playbook, cherished by many in the investing world. Yet, in today's market, it often sparks lively debates. Some prefer the thrill of short-term trades, while others swear by the tried-and-true method of buy-and-hold. In the midst of this divide, the notion of 'know what you own' remains a beacon of wisdom, guiding investors through the ups and downs of the market.

In my own journey, I've found this principle to be like a trusted friend, always there to steer me right. It's like the secret sauce that keeps many investing hiccups at bay, closely linked to those foundational insights we all need to succeed.

Think about it like this: When I was mentoring budding entrepreneurs, the biggest pitfall I saw was a lack of deep understanding about the problem they were solving. It's the same with investing. If you don't truly get what you're investing in, it's too easy to stumble. But when you really know your stuff, you're like a captain navigating through stormy seas with ease.

Let's paint a picture: Imagine you've put your hard-earned cash into a stock, and suddenly its price takes a nosedive. Panic sets in, right? But hold on a sec. What if the company behind the stock is still on track for greatness, despite the market wobbles? It's like that saying: "Take your time to choose, but don't be afraid to lose." Knowing what you own lets you weather the storms and sleep soundly at night, knowing you've got a solid grip on your investments.

Remember Peter Lynch's advice? Buy what you know. It's a bit like sticking to your favourite ice cream flavour – comforting and familiar. But hey, don't be afraid to try new flavours! That's where using a checklist can really come in handy. It's like having a trusty compass to guide your exploration into new investment territory.

Nowadays, with trading apps like Robinhood and Trade Republic, or platforms for crypto like Coinbase and Binance, investing is as easy as ordering pizza online. But just because it's easy doesn't mean you should rush in blindfolded. Take your time, do your research, and invest in what you believe in.

So, as you explore different investment avenues, remember: Know what you own. It's not just a piece of advice – it's your passport to smoother sailing in the ever-changing seas of finance.

Control Your Behaviour!

Investing may appear straightforward at first glance, but in reality, it's a challenging endeavour! You might find yourself nodding in agreement with the points I've outlined above – they seem logical, don't they? So, why is it that while 80% of everyday investors end up losing money on stocks, only a mere 10% of professionals can outperform the market? The truth is, investing is easy to understand but hard to execute!

I've come to realise that the key to success lies largely within our own minds – in our psychology and behaviour. As social beings, we often succumb to herd mentality, even when it's not in our best interest. We grapple with uncertainty and biases, making it challenging to make rational decisions. Often, achieving success in investing means swimming against the tide – thinking contrary to the crowd. It's like navigating against the current; our brains aren't naturally wired for it.

That's when it struck me: achieving success in investing isn't just about picking the right stocks; it's about mastering our own behaviour. As Charlie Munger astutely remarked, "It's remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent." It's about sidestepping the pitfalls, maintaining discipline, and adhering to my investment strategy, even when the temptation to deviate arises.

Personally, I find solace in the Coffee Can principle illuminated in the book "100 Baggers." It harks back to the 1800s when investors would stash away shares or bonds in a coffee can, forgetting about them for years, only to rediscover them at surprisingly high valuations. Time and again, it's been proven that inactivity or "doing nothing" yields superior investment returns over time. Yet, the higher our IQ, the harder it becomes to remain inactive. Thus, my plan incorporates support structures to aid me in maintaining inactivity once I've made a purchase decision – I aim to hold for 6-10 years unless compelling reasons emerge to sell. This serves as another checkpoint in my strategy.

So, as I continue on my investing journey, I'm embracing a kinder approach to myself, allowing room for occasional missteps and focusing on making wiser decisions over time. Because investing isn't just about crunching numbers – it's about mastering the delicate balance of self-control and resilience. And that, my friend, is the true challenge worth embracing.

In summary, I've found that embarking on this journey alone can be daunting, which is why I've found tremendous support in various investing communities. Through the Liquid Angels community, we strive to empower individuals to craft their own investment plans, understand the game they're playing, and provide the necessary education, checklists, and research to truly comprehend their investments. By engaging with a supportive community, we all benefit from keeping our behaviour in check and navigating the unpredictable waters of finance with greater confidence.

Liquid Angels is a dynamic investing learning community of driven individuals, mostly under 45, who are motivated to retire earlier and wealthier by applying transformative 10X investing strategies. We exclusively pursue investment opportunities poised to achieve a 10X growth within 6-10 years, delivering impressive average annual returns of 26-46%. www.liquid-angels.com