Was sharing my investment knowledge to a small group of young people starting out their investing journey. And I highlighted 3 fundamentals as below:
- Perspective – We are not growing money but being good stewards of our finances
We need to view finance holistically. I had seen many people going into investment hoping to make their money grow. And yes we should try to maximize our capital but it’s also not just about growing money but also watching our expenses, having the right insurance to manage risks and other usages of money that contribute to one’s dreams and goals in life. Warren Buffett lives frugally and he manages his money very well. We must not forget that money is just a tool, a resource. There are other things in life and it is a tool or resource that helps us achieve our dreams.
2. Value of Contentment
This might baffle some. Shouldn’t we be ambitious and strive for more. Yes, ambition does has its place but I find that we need to be contented with what we have and made full use of it. This places us in a position of security. And in making investment decisions, we can be more sound and rational in it.
3. Learner Mindset
I had studied many investment gurus and hedge fund managers. One thing that is in common among them. They are inquisitive. They like to dig out, research on company and business fundamentals. In today’s business environment, business conditions are dynamic and with so much information out there, sometimes it is difficult to achieve a good alpha. A cutting edge will be having more information that the rest of the investors, and that needs us to be always learning how the business works and how would the business be in the future. In fact Warren Buffett spends a lot of time reading each day just to keep himself updated with what is going on around the world.