Since I started writing this blog, I’ve made an unofficial goal to publish a new post every week. However, this past couple of months has had me consumed with a flurry of activity not only related to the title of this post, namely investing in myself, but also the travel activity that summer has brought on.
In late May, I wrote a major exam that had tapped most of my spare time for nearly three months in preparation for, and the couple of weeks leading up to it were the most taxing. It also serves as a context for what I want to share.
“I think you’d be better off investing in yourself.” That was the stern advice given to me by my father-in-law a few years back when he and I were talking about investing in stocks. It’s not that we hadn’t had “stock talk” before, but this time he was different. He was moody and very pessimistic about the whole idea. He had had enough and he was warning me about getting in deeper. He had lost a lot of money over the years in stocks, and I think he was worried about the dangers to my family if I kept buying stocks. In fact, he went so far as to tell me that I would never win and that I should get out while I still could.
His perspective was more than understandable. In the early 1980s when the market was red-hot, he invested about $150,000 into a single stock hunch given to him by an acquaintance. When the market vaporized, so did his money, and my wife’s family spent most of the next decade farming their way out of their hole, during years of Western Canadian drought and living in an old farmhouse. Things were so tight that my wife even grew up without a T.V. It was as though they were living thirty years back in time.
They got out of their hole by investing in themselves. Through a combination of incredible tenacity and frugality, taking on other jobs, and my father-in-law’s skills in machining and mechanics, my wife’s parents worked their way out of that hole and then-some in less than a decade. Then they sold the farm and moved to where he had always wanted to retire, and now they find themselves in a very comfortable position. No debt, plus two part-time retirement businesses – er, hobbies – both of which draw upon his experience as a certified machinist, and one of which has grown beyond their wildest expectations.
I guess his point to me was that I was far better investing in myself, by getting education and skills that would build a retirement nest-egg, instead of putting my money into the market over which I would have no control.
At the time, we had both been failures in the stock market. He got into stocks again during his semi-retirement boredom and he was admittedly hooked no matter how much he was losing. This time, he was losing through a number of penny and small-cap stocks that he didn’t research thoroughly and that he also held onto for short periods, too short for any winners to pan out.
I’ll admit that I was allured by stock investing at the time because I thought it would offer me a way out of my current situation. I was a dad with two small kids who had a great opportunity to get more education and skills in a new career, but I already had a bunch of university education that hadn’t paid off. I was tired of thinking that more education would solve our financial instability. I didn’t want the burden of studying and spending in vain yet again. So I hoped that I could make great money in the market within a few years, then kick back with a part-time retail job and spend the rest of the time enjoying life.
I was looking for a quick way out, thinking that the stock market would provide that for me. Ahh, such idealism!
But his advice stuck in my brain, as much as I didn’t want to be reminded of it. To try to get my employer off my back, I started taking the courses that I was trying to avoid, and the result was growing experience and income.
I had known in the back of my mind that my father-in-law was right, I just didn’t want to “man up” and face my fears and apathy head-on. I wanted an easy way out, and I hoped that the stock market would be the ticket. But being able to invest in anything else wasn’t going to happen unless I invested in myself, first. It’s pretty hard to realize future dreams if your current income doesn’t leave you with much left after all the bills are paid.
But a funny thing happened as I started to look at how to best invest my extra, hard-earned money. I didn’t want to lose any more, yet I kept losing. Then I realized that this was because my perspective of the stock market was all wrong. It is not a get-rich quick scheme, but a long-term wealth appreciation vehicle. Once I realized this, I was able to become patient with stocks that I bought, holding them instead of selling them after only a few months, sometimes only a few weeks.
So the things I’ve learned since the day of my father-in-law’s advice are two-fold. First, investing in yourself gives you rewards that nobody can take away from you. Unless you let certification expire, it’s there with you for the rest of your life, and more importantly so are your knowledge and skills. Second, investing in yourself is the only way you’ll be able to invest in other things, including having extra money to invest in your future.
Of course, a lot can be said about what you invest yourself in. A Political Science degree is often not as wise a choice as getting a management or marketing degree or entering a profession like accounting or medicine! Conversely, I know a number of people who’ve done incredibly well as welders and plumbers. It’s not what you make, but what you do with what you make.
So my father-in-law obviously was not able to dissuade me from stock investing. However, by investing in myself first, I’ve reached the point of not only being able to invest in stocks but also into the lives of others. I’ve also realized that hard-earned money can be easily lost by foolish decisions, and so I am very careful about the quality and quantity of whichever company’s stock I choose to invest in.
Needless to say, he and I don’t have “stock talk” any more. We’ve simply agreed to disagree, but I’m sure he’s waiting for the day when he can say that he ‘told me so’. Thankfully, he got out of the market (hopefully for good) because his personality is not suited for it, and it was more of an addiction and time-waster for him. Unfortunately, it also took a chunk out of his savings.
These days, his money is in the things he has a natural affinity for and thus a natural knack for, and so he’s having great success with his two small businesses, one of which now has customers globally.
As for me, I’ll stick with investing my money in stocks. I understand how the market works and I greatly enjoy researching what to invest in next. These are things I have a natural affinity for and am gaining more of a knack for. I can’t say that I’m nearly as interested in understanding real estate investing or starting a business of my own. Oh yes, and I’ll also stick with investing in more training and certification that will continue to grow my ability to help my family both now and hopefully long into the future.