Investing, beside being a great financial exercise, can also turn out to be a great learning experience. Actually, if you are already an investor or plan to be one someday, you would realise that investing teaches you almost all important rules you ought to know to win the game of life. And what would be better than learning such great life lessons early in your life.
I have been into investing for sometime now and I think I am eligible to share 7 such life lessons that investing at an early age taught me (FYI: I am in my teenage).
1. No Risk is the Biggest Risk
Well, this is perhaps the first thing I learnt when I started investing. I know you would have heard this statement a million times but how many people actually realise its importance, very few at least until you don’t start investing.
In today’s time, it is extremely important that you take risk, not just financial risks but even career wise and by risk I mean you need to come out of your comfort zone and explore new territories that might turn out to be beneficial for you. Also taking risk does not imply being non-nonsensically adventurous, it means taking calculated risks.
Let me give you an example to illustrate why it’s important to take risks. Suppose you decide not to take much risk and invest your hard earned money in a fixed deposit which gives say 4-5% interest p.a. Now, you might thin that you are getting a fair return and a much needed safety of investment but in reality you are not earning at all, you are in fact losing money. This is because of inflation. if the inflation is say 4-4.5% the real return on investment becomes just 0-0.5%.
This means you will have to work hard all your life to actually create some wealth and this brings us to our next lesson.
2. It’s Hard to Earn Money, Harder to Grow it
Earning money is a tough job, I admit as I myself have tried to earn through various internships and it actually takes a lot to get some cash in your pocket. However, I believe tougher is the task of growing your hard earned money.
It’s Hard to Earn Money, Harder to Grow it !!
Again as I mentioned in the last point, inflation erodes your purchasing power or the value of your money and not only this, it also leaves conventional investment options like Fixed Deposits useless as they are not even able to cope with the inflation.
The problem does not end here, even if you decide to invest in stocks or mutual funds it is not at all easy to get your hands on the right investing opportunity and worse is the fact that instead of gaining anything, you may lose what you posses if you plan to invest in these options.
So the question arises what to do? Well, even after so many ifs and buts investing in unconventional and real profit generating options is the most logical thing you can do. As I said no risk is the biggest risk. After all, no one wants to toil all their lives to earn. Therefore growing money is what you should learn and this is what investing has taught me.
Read Also: 7 Great Apps To Track Your Expenses
3. The More You Learn, The More You Grow
Learning is surely a continuous process and a fruitful one as well. Investing has taught me that there is nothing like just practicals, everything is accompanied with a corresponding theory as well which you need to know if you want your practical, in this case investing, to be successful.
To grow in life you ought to grow your knowledge base and this is a sure thing. In case of investing, there is no point you can be sure of knowing everything and even if you believe you know everything you might not succeed every time.
4. You Can’t Win Everytime
This might sound harsh but this is the sad reality of life, you just can’t win everytime. This is an important learning and the sooner you accept it the better it is.
We all live in an utopia where we believe that success is waiting for us for anything we do, however the reality is not quite that. You will fail a lot of time and believe me, very badly at some instances, so bad that you won’t even dare to try again. I faced the same a lot of times especially when I just began investing.
But soon I realised that is the fate of life, you will win some times and you loose a lot more but keep going is important. You can reduce your failures by learning and gaining experience but you can’t eliminate them.
Read Also: How to become more confident in life?
5. Patience can take you a long way
Patience is very important in all spheres of life, be it investing, career progress, relationship, anything. But seldom we realise its importance.
And impatience can be extremely deadly, especially in investing. When I started investing, I was quite impatient, checking the my positions every minute, buying and selling stocks and cryptos too quickly to actually gain anything. When I used to get some losses, I use ti immediately square off my position to ensure I don’t have to bear a bigger loss, but soon realising that if I had been patient for just a few more minutes I could have got profit and not loss.
And if you have ever tried investing, you would have felt that as soon as you buy some stock, the price start to plunge and as soon as you sell the price soars. Well this a classic example of not timing your investment or impatience.
I don’t say I am extremely patient now, but I am certain I have improved a lot and I owe this greatly to the practice of investing.
Read Also: 8 Common Investing Mistakes You Should Avoid
6. Greed Kills Reason
Greed is the biggest enemy of any investor, even of any human. Greed curtails our ability to think rationally and instead of working upon logic, one becomes impulsive.
In my opinion, anything that involves money automatically involves a lot of greed. And greed is such a strong human emotion that it takes over any other thing, even logic and rationality.
When I started investing, like anyone else, my mind was preoccupied with the thought of making the maximum money with the least efforts and time. And that costed me hugely. I learnt that it is very much possible to be carried away by just the thought of making profit, but being in your senses is what actually helps you to make profit.
Being ambitious is fine but being greedy is not. Therefore, no matter what happen, don’t let greed take hold of your mind.
7. Make 100 mistakes, Repeat None
“Mistakes are not the sign of failure, they are the indications of learning”
Making mistakes is an essential part of the learning process. And it is not at all bad to make mistakes, in fact when you make some mistake you remember it more significantly and the chances of it being repeated reduces drastically.
The key is not to repeat your mistakes. When you do something for the first time you are likely to make mistake but you should learn from it and not repeat the same thing again, that’s the real learning. If you continue to make the same mistake again and again, then the chances of your success is almost negligible.
Read Also: How To Do Multitasking Effectively?
The Bottom Line
Well, these were the 7 life lessons that investing at an early age taught me. I agree you might think that these are nothing new and probably you would be knowing some or all of these already. However, as I said theory and practical goes hand in hand. You might have read about these things but experiencing and realising them is equally important to understand their true essence.
Hope this post would have been of some value to you!
If you liked this or want to add some of your learning feel free to comment down.