Investing - 1

Alright, now you understand all these accounts and taxes and things, it’s time for you to make your money to good use. There are a million different ways to invest. The definition of investing may be different for everybody but for this book we’ll say it’s anything to do with money to generate money’ - so this includes savings account, stock / bond investing, real estate, and so on. Where do you spend all your money on, and how? Again, with everything in this book, I’m no expert, and these should be more for entertainment than informative. I’ll tell you my story.

 

I always wanted more money, and it’s extremely easy to invest money now with your phone. The first time I started having disposable (extra) income was in graduate school. I was able to save $ 500 a month, and it was 2017. I was an investing novice, and a graduate student with nothing but ambition, so I bought bitcoin, obviously. I believe it was about $5,000 per coin when I got in, at the peak of the bubble. I remember sitting in a 2-hour lecture, and every time I’d check my phone, my portfolio (about $ 3,000) would grow substantially. I was sweating. I was sitting in class and making hundreds of dollars. It was a wild feeling. I looked around and saw the peasants next to me just wasting their opportunities. I felt a sense of pride, arrogance, rather. I thought I was going to be a millionaire, and I was listing things I would buy my parents. I looked at the prices at least every hour, like a kid who just got a dog for christmas. I don’t really remember anything else that happened in my life then - I was just hooked. I ate less and spent less to invest in bitcoin. It seemed like I was invincible, that this would continue to grow exponentially. Then, the crash came, and I lost mostly everything. I crawled out of the massacre with $ 5,500, after putting in almost $5,000, and a great amount of my attention and time.

 

After experiencing the crash, I was scared of the cryptocurrency market, so I started to trade stocks on Robinhood. It was equally consuming. This time, I would watch the news incessantly and track prices. With every notification and price change, my mood would change.  And most importantly, I wasn’t making that much money, or rather, I was losing money on most trades.

 

After an exhausting year and a half of direct investing, I realized that this was not sustainable, or a good worth of my time. I did not have the mindset of an investor. I was just gambling, and it became too big of a part of my life that I was doing poorly on my actual job as a researcher. Something had to change. 

 

As a young kid who started making some money enough to pay the bills, the idea of money making money is too attractive to not be obsessed about. You read bits and pieces from websites here and there about how nobody is rich by working, and that you need to invest. But once we get to invest, we are faced with a flood of information, sometimes contradicting each other. So in this clusterfuck, what should we do? Where should we start?

 

As with anything, I think a good place to start is to check yourself - your goals, and your philosophy. Ask yourself - Why do you invest? What do you want? What do you plan to do with this money? What does your timeline look like? When do you need this money? What are your current, and prospective resources now? Answers to these questions will determine your investment strategy.

 

For me, I didn’t really have anything that I felt worth spending my money on. I don’t really understand expensive cars ( I feel like having an expensive car, having to maintain it and all, would be stressful), or find value in expensive things. Probably due to my upbringing, I didn’t like having things. I would have some things I sometimes splurge on, like books or vinyl records, but nothing big. After a while, I found travelling cumbersome - the airports, the taxis, and the uncertainties were a source of anxiety for me. So I don’t travel unless I have to, for business or for family. I found joy in seeing money leftover and just accumulating things. I guess I’m a hoarder of money. 

 

After the exhausting experience with direct investing, and following price trends and news for years, I decided it was time to let go, to focus on my work and other things in life than graphs and sums of money. I sat down and asked myself what I wanted, and when I wanted them. To be honest, I didn’t really have a goal. I just wanted more money. I had no plan to get married, or wanted a BMW, or anything. I just wanted to see a big number. I feel like a lot of young folks feel this way - they don’t really have a reason to save, so they don’t. There are loans to pay, drinks to buy, and bills to pay. I feel you, and you have all the reasons to feel this way. So after some soul searching, reading, and research, I found out that I wanted early financial independence. Now you probably heard about this Financial Independence Retire Early (FIRE) movement. There are lots and lots of blogs and books about this, and how to do it. The crux of this movement is to live frugally and save up so you can retire early (`early’ can range from 30s to 50s). You save enough so that you can live off of your investment portfolio (interest, dividend, increase of value of portfolio). For example, if you need $ 30,000 per year to live, you’d  have enough money invested that you’d earn $ 30,000 just from interest, or dividend, or whatever. Anyways, I wanted that.

 

The major reason for this was because of the independence aspect of it. I don’t plan to retire when I’m 30, because I am fortunate enough to have a job that I’m passionate about. I love going to work, and I think it’s a quite good use of my time, so I probably will continue doing it. But the good thing about having this mindset is this - I get to worry less about money. If I have a giant safety net, and know that I can quit work and still survive, I will be more relaxed and truly enjoy my job. It’s also about having options. I have the option to do whatever I want. If I develop a passion for art or something, I can just do it. It is fucking liberating. It’s the whole robustness that I was talking about. So if things all go to shit, I’m still good. If my parents get sick (knock on wood), or for some reason a right-wing president kicks me out of the country (shade), I’ll be still good, cause I’m robust, financially. It just feels good to me. More than a BMW, more than a larger TV. But I’m just weird like that. 

 

Anyway, now we have the meta down, it’s time for practical stuff.

It will be nearly impossible for me to list all investment options, so I’ll just tell you what I’ve tried, the services I use, and basic facts about other methods of investments, and things to consider.