You’ll Need to Learn to Invest If You Want to Become Rich

People want to invest but they have fear, meanwhile the cash in the bank is devaluating.

Fear comes from a lack of knowledge

People make it sound so complicated to invest with complex indices, charts and financial reports.

I’m going to share my rather simplistic approach from my own journey which started in 2000.

I just mentored a client who has been wanting to invest her money for years and just didn’t know how to get started, what to invest in or how it all works. She knew she was missing an opportunity but had fear.

In two weeks, she went from dream to reality as I accompanied her through her first transaction. In 3 weeks her portfolio of Apple shares is already 5% up and she is ecstatic. She regrets having waited so long, I reminded her that it’s better late than never.

I’m not a financial expert, I am an investor and began with a property for students twenty years ago. I’ve studied the greats such as Warren Buffet and Charlie Munger and have a basic strategy that resembles my ethics.

People make it way over-complicated with a million indices, historical graphs, investor ratings; it’s so overwhelming that it kept me away from it for so long.

Even today’s generation Z TikTok traders with thirty second video’s overwhelm me, not everyone wants to be a day trader. Sometimes those videos go viral, however, I’d be interested in knowing how many people actually start investing after watching one of those. When the fairy dust thrown in your eyes settles, there’s little value that I can recall let alone actually use.

My first real stock trade was ten years ago with $2000 and that was a huge amount for me to “risk”. Eventually, I rationalised it, it was the monthly payment on my car, which, if I’m honest to myself, is a loss anyway. I talked myself into spending it on an “experiment”, I could afford to lose and off I went. Today, I have around 50% of my total wealth on the stock market.

What you know

I love volatility, I love risk, but I have principles.

Here’s my very simplistic strategy to investing.

1. What do YOU believe in?
2. Can you afford to lose it ALL?
3. Can you ride the waves and play the LONG game?

Without sounding too much like Simon Sinek, I start with companies who believe in their WHY.

I primarily invest in companies whose product I use or would use; this way, I get it. I try the competition to work out it's strengths and weaknesses as it allows me to better evaluate its potential. It’s purely personal.

When Apple Music launched, I didn’t sell my Spotify stock, and I don’t plan to anytime soon. I didn’t sell my Apple stock either.

While I still walk into office towers full of Windows PC’s, I believe Apple has vast potential.

I’m in it for the long game and don’t stress myself with constant monitoring. I accept that as investors ratings go from BUY to SELL and vice versa, the stock will be affected.

What you don’t know

“Speculation is a weapon of mass destruction” — Warren Buffet

Bitcoin, Etherium, NFT’s I just don’t understand enough. I do think they are the future, however as for the value, I have no idea if Bitcoin is worth $60K (April 2021) or $30K (June 2021). Judging by the volatility I’m not the only one having difficulty valuating it.

Then there’s the pandemic, that nobody was prepared for. During this I attended a group call with my mentor who told us:

“Right now everyone is contracting, this is the time to expand.” — Grant Cardone

We buckled our seatbelts, checked to ensure tenants were able to pay rents so we had cashflow and off I went and invested almost all remaining cash, including that of my recently sold cars, into the stock market and went on the hunt for real estate opportunities.

While most ratings were Sell, I was thinking Buy?

Did it work?

This is why I’m sharing this. If I average out over ten years, this strategy has made 20% net year on year.

If you'd like to see the companies I invested in, check out my article on Medium

I have no idea of the future, and despite automatic sell triggers, the possibility does exist that I may lose it all.

Just one more thing

There is something called inflation which is the purchasing power your money has. Although stock prices are rising, the dollar is getting weaker and weaker, around 10% weaker over the last two years.

And that’s why the other 50% of my investment is in Real Estate, because if you take the USA as an example, it’s been proven to be a great hedge against inflation.

Ask yourself, what information do you need to get started? 

Who do you know that can get you the answer and is neutral?

You don’t have to go all in, particularly if you have families, however, I encourage you to get started. If you are in, focus on what’s working and what isn’t.

Especially if you want to become rich.

This article is for information only. It should not be considered Financial or Investment Advice. Consult a Financial Professional before making any financial decisions.