When did my money journey start? I remember having a piggy bank when I was young; a yellow house with a red roof and a coin sized hole at the top. I would eventually fill it to the brim, using pound coins that I was allowed to keep when shopping, or change when I would buy something at the local Esso garage near my school, Aldersbrook Primary School. My mum always stressed the importance of saving, even at a young age.
At school, I always remember being one of the children in the class who knew so little about brands and fashions. At times, I must admit I had a bit of envy for those classmates who would be able to wear designer clothes, but, reflecting back upon it now, she was always right. Parents have a tendency to think that they need to give their children everything that they didn’t have growing up, but this can definitely lead to children taking things for granted.
Children Should Live Modestly?
Charlie Munger and Warren Buffett actually lived in modest houses for decades in order to avoid spoiling their children.
“Live in a rich family, your duty is to use the wealth and live grandly. That’s what everybody’s doing with the money. You learn from the people that are doing it,”
Charlie Munger
I believe that this is certainly a mistake that a parent can very easily make with their children. If you’ve ever watched Uniquely Me’s documentary on the lives of children who are spoiled, you’ll see how it seems to come from a place of parental love, but also from a place of weakness.
These parents simply are unable to say ‘no’ to their children. It is certainly easy to see why, but parents sometimes need to do what is necessary to be firm and resolute. I believe that my mum really helped me gain resolve on my money journey with her guidance.
Dr Jordan Peterson, in this great video below talks about the duty of the parent to the child:
I would also add that spoiling your children can also lead to the dangers of making your child think life and wealth comes easily, with no need for discipline and control.
Money Problems?
I actually believed for a period that we were not well off. My mum says that I used to ask her whether we had money problems because she used to say ‘no’ so often when I asked for something.
My dad was never as consistent with his savings and investments as my mother; despite having a financial job, and I remember my mum castigating him for being ‘in the red’. I’ve always found this dynamic interesting within my family as it is so often the man that is in charge of the investments and the woman in charge of the savings. In fact, men usually have a higher rate of investment than women, and women often have a higher saving rate than men.
My mum was certainly my first major influence, and someone who emphasised the importance of building savings and investments. I also remember asking about why she would switch her bank accounts and open new savings accounts, and she told me about interest rates and how you should seek out the best rates and take advantage of cash incentives. This practice is known as ‘bank account churning’.
Did I learn anything about money and wealth from going to school?
In primary school, I must admit I learnt little about money, success, or wealth-building. Obviously, we learnt about how to add money, find the change, and many other simple concepts, however, we learnt effectively nothing about building these other habits. Our financial education was non-existent.
However, in secondary school, I did start to learn more about the commercial aspects of business, about writing a cheque (probably as I went to a private school who wanted future donations), about ideas such as profit and compound interest. At the time, many people did not consider the implications of what they learn, but I was fascinated.
“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
Albert Einstein
The idea of exponential growth, really fascinated me. I remember thinking deeply about the concept as soon as I learnt about it. I’d plug in numbers and see how small fortunes could become large ones depending on three factors: the amount invested, the growth rate, and time.
I was certainly an unusual child.
Financial Crisis
While I was taking my A-Levels, the world experienced the 2007-2008 financial crisis. I heard about it on the news, but it was in the background as at the time I was frankly more obsessed with chasing girls, exams, and learning to drive and drink (but never at the same time).
I did, however, when I entered Birmingham University to study a joint honours Philosophy and Classical Civilisation and Literature, notice a few of students talking about how the bankers had ruined everything, and about the deep recession that had resulted from their actions.
The far-reaching impact that this financial event had had across the world really stimulated my interest. I picked up a book called Whoops! by John Lancaster, in my second year of university and this book explained the crisis in simple terms.
I followed this by buying another book called The Big Short, by Michael Lewis. Realising that a little bit of myself was within some of the characters in the book such as Michael Burry, and Steve Eisman. I was also fascinated by the concept of making profit from the irrationality of the market.
My Money Journey: Wanting More
I was doing all the things that my mum had encouraged me to do such as starting a savings account, not spending too much, and concentrating (whilst conscious), on my studies.
On completing my degree, however, I had an itching for more. Unfortunately I did not have the wisdom to enter the market until I started my Masters degree in Global Political Economy at City University London.
I remember being particular struck by one of my lecturers words. I asked him at the time, “how can we escape the controls of panoptic capitalism?”.
His answer was something like that we need to aim to become the system itself. I don’t know if I really understood the answer at the time, but I interpreted it as meaning that I needed to focus my efforts on owning the means of production.
Self-Educating Myself
When I first started, I had little idea what I was doing, so it was at this time that I read, Beating the Street by Peter Lynch. I actually believe that this book is the first investment book that anyone should read! It really filled me with hope that I could uniquely position myself to do well in the investment world. I had always felt like a bit of an outlier; more of a rational thinker than emotional, and able to hold my nerve in difficult situations.
I read more and more. Warren Buffett, Charlie Munger, Benjamin Graham, Phil Fisher, John Bogle, and all the other giants of finance set me on my way. I realised that I wanted to own businesses and create my own portfolio. I really didn’t earn much money, but I put basically everything into my portfolio that I could afford.
At the time, I was tutoring and writing maths questions for my friend’s mum’s company, RTG Tuition, but I eventually became a company director and owner after many years of service, and investing my own money into the business. Eventually the company rebranded under the name, Redbridge Tuition.
My Money Journey: Future Investment Goals
I wanted to be a millionaire by 35. I probably won’t reach this milestone, but I have done very well so far, even though I haven’t had the benefit of the highest income.
However, I project that within 3 years, I could probably build enough of an income stream to live well and relatively passively thanks to dividends and other income sources.
I have also realised, over time, that all this wealth-building is almost meaningless without family and friends to share it with, and your health. I make particular effort in my personal life to keep on top of my physical fitness, and aim to meet more people who can inspire the best in me. Investing in yourself pays the best interest.
Thanks for joining me on the journey and taking time to read this blog!
