One of the most common misconceptions I've come across is that because you work in high finance (markets or investment banking etc) you also understand and are good at personal finance. Whereas in a lot of cases even though you are an expert in whatever particular product you specialise in (convertible bonds in my case) you may not understand anything at all about how to invest your money, how different retirement or tax structures work, how taxes work, what investment allocation you should have, budgeting, cash flow, the list goes on and on.
Personal finance obviously has some crossover with investment, but overall they are two very different areas and should be treated as such.
Thanks for the plug! And man, could I write one of these to cover all the missteps along the way (yes, there were FAR more than one).
"Not everyone grows up knowing about compounding. There’s a lot of financial literacy stuff for kids or teens out there. Much of it is impractical unless the youth is specifically interested in investing. Yet the idea of compounding, not just financially, but in relationships, knowledge, and skills is critical. Finding ways to deliver this message so that it sticks is a worthy challenge."
I love this line because it is so true. This is one of my biggest (and so far failing) missions is finding a way to make simple compounding stick. It's hard because most minds don't grasp the concept until their mid-20's (it's much more of a "how do I beat the markets" mentality) and then there's so much going on in life that before you know it, you're 40. Which means you just wasted 15-20 years of excellent compounding. And that 100 basis points which makes no difference over the first 5 years can make over $300,000 worth of difference in 35 years of saving $500/month. ($1,146,941 vs. $1,470,892).
Thanks for the great writeup and enjoy your trip to Panama!
Hey Kris, love what youre doing here. Im coming from this from the other direction. Spent the last 10 years as an investor and now just really learning to trade over the last two. Felt very similar, lots of lessons from investing that i had to unlearn as a trader but it feels like its slowly starting to come together. Past two years have taught me that when the market is bullish its bullish and when its bearish its bearish and theres very little my fundamentals and long term investing outlook can do about it when im in the wrong regime, hence the traders skillset comes in quite useful. Always enjoy your posts!
One of the most common misconceptions I've come across is that because you work in high finance (markets or investment banking etc) you also understand and are good at personal finance. Whereas in a lot of cases even though you are an expert in whatever particular product you specialise in (convertible bonds in my case) you may not understand anything at all about how to invest your money, how different retirement or tax structures work, how taxes work, what investment allocation you should have, budgeting, cash flow, the list goes on and on.
Personal finance obviously has some crossover with investment, but overall they are two very different areas and should be treated as such.
Thanks for the plug! And man, could I write one of these to cover all the missteps along the way (yes, there were FAR more than one).
"Not everyone grows up knowing about compounding. There’s a lot of financial literacy stuff for kids or teens out there. Much of it is impractical unless the youth is specifically interested in investing. Yet the idea of compounding, not just financially, but in relationships, knowledge, and skills is critical. Finding ways to deliver this message so that it sticks is a worthy challenge."
I love this line because it is so true. This is one of my biggest (and so far failing) missions is finding a way to make simple compounding stick. It's hard because most minds don't grasp the concept until their mid-20's (it's much more of a "how do I beat the markets" mentality) and then there's so much going on in life that before you know it, you're 40. Which means you just wasted 15-20 years of excellent compounding. And that 100 basis points which makes no difference over the first 5 years can make over $300,000 worth of difference in 35 years of saving $500/month. ($1,146,941 vs. $1,470,892).
Thanks for the great writeup and enjoy your trip to Panama!
Hey Kris, love what youre doing here. Im coming from this from the other direction. Spent the last 10 years as an investor and now just really learning to trade over the last two. Felt very similar, lots of lessons from investing that i had to unlearn as a trader but it feels like its slowly starting to come together. Past two years have taught me that when the market is bullish its bullish and when its bearish its bearish and theres very little my fundamentals and long term investing outlook can do about it when im in the wrong regime, hence the traders skillset comes in quite useful. Always enjoy your posts!
Your transparency and humbleness is amazing and very uncommon. I read all of them. Keep up the good work!