Everyone should know by now that I am not someone who considers herself a sophisticated investor by any means.
I repeat like a parrot (and follow) the advice of investing in index funds, but I can’t take 100% credit for having come up with that on my own.
But after reading Cassie’s post on people not admitting to their investing mistakes, I thought I’d share how I got started in investing in the first place.
IT ALL STARTED WITH A SIBLING…
It all started in the last year of college when my brother, acting like my actual father in many ways, gave me 2 pieces of advice he said he wished someone had told him:
- Look into investing in index funds (he gave me a list of resources)
- Pay off your debts ASAP
- Read: My Investing Series for Beginners which I hope is very easy to learn / read.
I took both to heart, because I was not necessarily a person who sucked at handling money, I had just never built a budget, tracked my expenses or learned anything beyond what people around me said about money.
I started looking into what the heck “index funds” were.
See, what people said about money at the time, I listened to very carefully, and followed their advice. This was one of those times, and thank goodness for that because he saved me a lot of years of financial mistakes with those two pieces of advice.
I didn’t waste thousands like he did, trying to chase the hot stocks, and he kept repeating: Index fund investing is not sexy, but it works.… and he’s right. I did my own research and everything comes up proving that index fund investing is the best kind of investing most folks should do.
I had no idea what index funds REALLY were, and luckily I also had a business background to help me weed through the language with relative ease.
What I hated the most (and still do) are fees. I hate bank fees, unnecessary crap paperwork fees and most of all, hearing about how index funds helped you AVOID such investing fees (e.g. MERs), sold me on the merits of owning index funds.
Note: I didn’t take anything beyond basic, requisite high finance / investing courses in school, which don’t tell you jack squat about index funds and only talk about stocks, ratios, and valuations.
After I learned what index funds were, that’s where I started.
..THEN I STARTED MY CAREER
I invested in them when I started contributing 4% of my take-home pay at my first real job, because my company was also kicking in 4% as a 100% match into my retirement fund (RRSP in Canada).
From there, I only invested in index funds for the majority of my career, and it actually isn’t until 2013 that I became bored, and cautiously started buying stocks and coming up with a dividend portfolio, and recently changed to ETFs from index funds to save on fees.
For stock help, I turned to extremely helpful, enthusiastic bloggers like Nelson, PK, Jacq and any investing blog I could find, and devoured what they had to say, even if I didn’t understand what they said (it takes a while to get into the lingo, and to read it without stopping and trying to think back to what you learned many years ago).
THEN I DECIDED TO GET INTO STOCKS FOR FUN
When I finally decided to start buying stocks (Starbucks was my first purchase), I made a mistake in the first few tries of trading with Questrade because I mixed up what a “Limit” meant, and ended up selling a stock I had at a loss rather than putting in a future, pending order to buy them at a certain price, which is what I really wanted.
Live and learn.
So I highly recommend you learn what each term means before you actually start trading, and while I thought I had them straight in my head, my fingers apparently thought otherwise.
Anyway, in regards to investing, seeing as I do have a business background, I wasn’t at all intimidated by the language like I think most people are, and soon realized that maybe there were people out there who wanted to get into this, but felt helpless because they couldn’t read these fantastic resources and understand anything.
A lot of what is said about investing is simply not written for the ordinary person without a business or finance background to understand easily, without some work…. and we all know how lazy humans can be especially when it comes to eating their financial vegetables!
THE INVESTING SERIES FOR BEGINNERS
So I started my Investing Series for beginners, trying to make it friendly and accessible, and I have had some positive real-life (blogger friends) and online feedback about how it’s been helping.
I really sincerely hope that people do get an idea of what investing is all about in what can seem like an intimidating world of money. It isn’t that bad once you get into it, because you don’t need to worry about fancy things like “puts” or “calls”, or anything that is truly high finance.
Worse comes to worst, you can just plow your money into investing in index funds over the very long-term (30-40 years) and come out reasonably on top.
I hope that helped a little, to let you know how I started investing and that we DO make mistakes, even if they’re small ones.
I haven’t made any other mistakes since, except picking one dud which I quickly sold in recent times to grab a capital loss for my taxes this year, but I can only hope I will continue to be as lucky in the future.