Hello, and welcome to another issue of this newsletter.
The first in a very long time, even after making posts about coming back. It’s 4:43 this evening, writing this after a fairly productive day. And I’m happy to be doing one of the things that give me so much joy after a long time.
Betting on Yourself
Some few weeks ago, my TL was buzzing for and against investing and when should one start. I thought about this, and here is what I think for the most part. While this is my current take, this might change in the future.
So a lot of people ask me - when they get to know that I write a finance newsletter - about investing. Questions like:
What stock should I invest in?
How much is enough to start?
What app or platform should I use?
And to be honest, it is easier to just give them the “it depends” answer and go on and on about other adjacent things,1 which will eventually bore them but free me from an unpleasant situation in the future.
Now, don’t get me wrong, these questions are valid and do not come from a place of malice.2 But I’d have to give those long-ass answers because I don’t want a situation where they blame me for giving them such advice or, worse, destroying my relationship with them.
So what do you do?
If you want to get started, I’d recommend doing the best investment. An investment where you can’t lose and where the upside is not limited. The best investment you can make is in yourself.
First, you have to understand that anything can be taken away from you, but not what you know, not your knowledge. Your wealth can be taxed or confiscated, your connections can turn against you. Anything you think you rely on can be taken away, except yourself, and what’s in you.
“Generally speaking, investing in yourself is the best thing you can do. Anything that improves your own talents. Nobody can take it away from you. They can run up huge deficits, the dollar can become worth far less, you can have all kinds of things happen. But if you’ve got talent yourself, and you maximize your talent, you’ve got a terrific asset.”
You can never go wrong with investing in yourself. Usually, at the start of your career, you must be a learning machine. Learn as much as you can. You want to go to bed a little wiser than you were yesterday. As you go along, your compensation (hopefully) begins to rise, and you begin to have more disposable income.
When you are a learning machine, you get to rise much faster and earn more. With this, you can easily invest much more than you would at the beginning of your career.
You might ask, how about compounding?
The argument that one should start investing earlier is valid because you get to ride on the power of compounding. However, no matter how much compounding your investment does, it is no substitute for compounding yourself. It is not even comparable.
Let me end with this; a friend of mine, Dave (not his real name) had started saving during his 100 level days, he was able to save around 85k ish in about 3 years, which he invested and did not touch. By the time he graduated, he had about 120k in his investment account. And that’s solid given that around that time the stock market wasn’t particularly doing well.
Around the same time, he got a 5-month gig based on skills he learned (not related to what he studied) and the pay was 100k per month.
Now looking at this, he got in a month, an amount almost equal to the total amount he had accumulated in his investment account over 3 years.
This simply explains how investing in yourself gives you a solid head start. Now imagine he used that amount he invested initially to speed up the skill he learned, I’d bet he’d have made much more than both sums combined in those 4 years.
The idea in a nutshell is that when you invest in yourself early on, you get to a point where you earn a little more. This little more over time gives you a massive capital which you can later use, to save and invest.
Thank you for reading this week’s newsletter.
See you soon,
MT
“The best investment by far is anything that develops yourself, and it’s not taxed at all…Whatever abilities you have can’t be taken away from you. They can’t actually be inflated away from you” - Warren Buffett
things they’ve not considered such as their risk profile, their time horizons etc.
The analogy at the end was much needed. Thank you.
agree 100%! nice one bro :)