You wish you had started investing earlier?
The most common sentence uttered by investors? I wish I had started earlier! I see it in so many comments on my YouTube channel... and it always makes me a bit sad. Because to type that up, possibly multiple times, on other money channels as well as mine, means one thing: living with a sense of regret. And so, today's post is for those of you who think of investing and, most often than not, say: I wish I had started earlier.
Both the London and New York Stock Exchanges were officially created over two centuries ago. That's over two generations ago. Which technically means that no matter what age you are right now - in 2022 - you could have started investing on the day you were born. And even if you cut yourself some slack, say a century, you're still faced with over a hundred years left. A tricky position to find yourself in, when in search for your "excuse."
And yet, most of us - and here I don't need to say: people in this or that age bracket because it's a simple truth present in all age groups - do not start investing early. Less than 5% of British adults have a Stocks and shares ISA now. Sure, we can optimistically suspect that a higher percentage invests SOMEHOW - in general accounts, in crypto wallets and so on. But even so, how will that group boost the overall number? By another 5-10%? That's hardly impressive.
But! But we see younger and younger people letting us know they're planning to retire at the age of 40 or comment how they're only 17 and sharing their investment strategy - this is a true story, I do get comments like that - and we think: damn, I wish I had started earlier! We immediately fall into the vortex of comparison. And if this is exactly what happens to you when you're confronted with what I call The Bold And The Beautiful of personal finance - try this approach instead.
Understand your place in time
Because you like comparing yourself so much... try comparing your teenage years to those of an average contemporary teenager. Focus on one thing - mobile phones. When did you get your first mobile phone? I got mine when I was finishing secondary school. It was this Finnish beauty - no pun intended. Apart from calling and texting - both with very much LIMITED free allowance - in times of boredom, I used it mainly to play a basic game called Snake. Shout out to all of you who played Snake! Now, I won't exaggerate if I tell you that I spent maximum an hour a day on my phone. I spent less but let's be gracious to my younger self.
In comparison... if I were a teenager now, between 13 and 18 to be precise, I'd spend on average three times that amount of time only on social media. This involves WhatsApp - so you could point out it's similar to texting but even when you single out one app - TikTok and a group of teenagers aged between 12 and 15 - the average use in 2021 was 97 minutes. That's just one app. That's a lot.
Now you're probably scratching your head and thinking: ok, where are you headed with this? You want to blame today's kids for their social media use?
Well, not really. I'm showing you how small my circle of peers was when I was growing up. Texts and calls were to and from people I already knew or maaaaybe, when I was highly sociable, people who knew people I knew. There was no option to send a direct message to anybody on Instagram - because Instagram didn't exist. To illustrate: chances of me stumbling on Minesweeper on my PC? HIGH. Chances of me stumbling on a personal finance TikToker? NONE.
You might be thinking - why does it matter? There was this interesting conversation between some of my YouTube channel viewers, under this video. One person - a teacher - said that people often cry ‘I wish they taught me this at school!’ whereas in fact compounding is taught at school but kids don't pay attention. Somebody disagreed and so on a so forth - you can go and read the whole chat if you wish, it's quite interesting. The point is this - our peers have much more influence on us than our parents and teachers. Who will you believe more - your dad who tells you not to smoke or your classmate who offers you a cigarette at a party? By the way, I don't promote smoking.
It's crucial to understand the times you grew up in. Your access to, if not services, then certainly information.
What difference does it make that Vanguard was founded in 1975 if a - nobody in your circle talked about it and b - your first local Internet cafe opened in 1990? And if knowing this still doesn't give you a more healthy perspective - maybe knowing that many professional traders didn't catch up with the idea of investing in index funds for decades, either. And they very much HAD access to the information you didn't.
See it as a failure, not regret
Now that you placed your younger self in time, you have two options - regret that you didn't start investing earlier or accept it as a failure.
Failure has a bad rep. Nobody seems to like it. You can hear that it's simply a miss before an eventual hit and part of a journey but hearing it is one thing but believing it is another. So why do I promote it today, when you wish you had started investing earlier?
Because it gives you a sense of closure. When you regret something, you keep the "what could have been" thinking on loop in your head. What if I started investing when I was 18... What if I bought Amazon shares when they were just starting? On and on it goes. A far better thing to do is tell yourself: I didn't start investing when I was 18. I played snake on my phone. It was a failure and I'm ready to move on from it. Regret is an open "what if" question. Failure is a type of answer.
Don't judge yourself. Don't look for somebody - hey, teachers! - or something to blame. It happened. Let yourself experience all negative feelings that show up when you face it: whatever they are. Disappointment. Sadness. Frustration. Name them. Then add it all up as a failure - a lesson in disguise - and plan the next step.
Forgive and move on
Forgiveness is often associated with high drama talk shows but it’s a very quiet thing. And it takes time. What helps is knowing that you did NOT have certain opportunities and chances, that maybe you were not ready and that failure is part of life.
This channel is not a pity party. We are who we are, we like who we are and so we are keen on showing compassion to ourselves.
You don't have another go. You cannot travel in time and tell your teenage self to pay attention in class. What you CAN do is remember yourself from that time with affection. And this applies to all stages of life. Maybe you failed to start investing in your thirties. Maybe a year ago. Maybe when your close friend was begging you to open an investing account. Or maybe you even failed at each and every one on these occasions.
Accept it. You failed. If you're watching this part of the video, I assume at some point you DID start your investing journey. Which means you learnt from your mistakes. Only you know how much courage, discipline and fighting risk aversion it took you. Congratulate yourself. You've arrived.
And finally, look around, see how easy it is to start investing these days. No phone calls to a broker, no problem with finding relevant information - all it takes is a well-formulated question typed into a search engine, isn't that incredible? No minimum amounts of money you need to save before you can start. No need to even own a personal computer if you're OK with using your phone only. Instead of wishing this had happened sooner, embrace it, take advantage of it. The time is now. Use it.
