We've never had so much content about financial education at our disposal, have we? How to learn to invest, however, isn't exactly learning that relies so heavily on this sea of information about personal finance and investing.
This is not a criticism of the excess of content, but of the fact that we give it much more responsibility than we should. Content and information will always be important, but choices will remain individual.
What I hear often is that “now saving money is much easier and I can learn to invest whenever I want” . The illusion of control added to the growing repertoire of financial education places us as someone capable of resolving the situation at any time. The reality? Well, you know that's not so.
How to learn to invest: 3 lessons that changed my life
Interpreting and transforming the content we have contact with into practice is not simple and depends as much on attitude, interest as on ability and training. I know we still have a long way to go in this regard, so not to ramble on about it, better talk about what I managed to do and test it.
In 2020, I will complete 20 years of investing in the financial market. I feel very much like a famous quote by Nassim Taleb : “It's 5 years learning to make money and 15 learning not to lose” . Allow me to share some simple (yet profound) lessons that have changed my life.
Lesson 1: More practice than expectation
We live in increasingly interesting times but full of appeals from all sides. The possibility of connecting with so many people at the same time makes us more anxious; and following their lives almost instantly raises our expectations.
The “guru you need” is just a few mouse clicks or finger scrolls away. The message that says “exactly what you need to hear” can be easily found on social media.
Without realizing it, you spend more time worrying about what you don't have (and don't do) than what you've already achieved (and done). Analyzing the financial world, we have spent a lot of time consuming content on how to learn to invest, but without actually starting to save.
“Start with what you have now”. I heard this early on and luckily, I tried to follow the advice. I bought shares of companies in the fractional market, entered and exited different investment funds and started a supplementary pension at the first possible opportunity, still at the age of 20.
Don't be fooled or think that makes me someone different. It's not about virtue, but choices. The amounts saved were modest and the focus was really on trying to make some investment (and learning by doing) rather than waiting for something to change on a simple whim.
With this habit, it became easier to invest but no less challenging to deal with the reality of investments. Changing scenarios, choosing companies, investment portfolio, how to diversify, whether or not to open your own business, risk, all of this remains relevant. But when you've already started, the motivation is different.
Lesson 2: More networking than reading
Reading follows a trajectory similar to that of expectation, although it has very interesting positive aspects and valuable side effects. The point is not to get carried away by the increasingly present simplification of concepts, as if incredible results were just a matter of “following a recipe”.
How to learn to invest is an essential part of a journey that should accompany you for the rest of your life. The biographies of major investors clearly show this, but many commercial works based on them make it seem easy to become a new, updated version of them.
If it were so easy to repeat lessons from investing books, why would anyone work in the financial market, for example? Or on anything else? The polemical rhetoric of these questions serves to provoke you to think more about relationships than lessons – and that includes reading this very text very carefully.
Read a lot; this is important, but try to meet people capable of sharing real stories about choices, consequences, and learnings involving personal finance and investments.
Meetings and networking in this sense will offer a more practical and less “glamorized” view of how things really happen in real life. A sincere person will always tell the truth about their story, but that won't always be in the books about them (or what they would write). Because? Because nobody would want to buy them.
Imagine a bookstore with titles like “Get Rich in 20 Years (or More): That's If You Do It Right” or “You're not going to make money investing, but working hard,” and so on. Yeah, sales would be a disaster. In a cafe, you can talk about it all. In your readings, it will not be so easy to find honest chapters like that.
Lesson 3: More interpretation than social networks
If, on the one hand, reading must be done more carefully, it needs to be frequent and increasingly encouraged. There are excellent books, full of good suggestions, stories and ideas – and even ideas have consequences, as we have learned from the current reality in the world.
I said it might be a little harder than you think to find many practical tips on how to learn to invest in a book. Finding them on social media is even more complicated, as paradoxical as it may seem.
The fully connected world allows friends to be the voice of friends through YouTube videos or posts on their profiles. Sharing what you've been doing, how you've done it, and what results you've achieved has never been easier. Truth. But lying has also never given such “interesting” and advantageous results.
Popularity. reach. Authority. Invitations to events. Advertising. Public recognition. A message with dubious (or even inaccurate, wrong) content can reach and impact millions of people in a short time.
The viral effect of a fake virtual investment success story can ruin hundreds of thousands of lives. In a real and lasting way. You should be more careful with the content you consume, which means learning to interpret and validate it before simply trying to replicate it.