Your parents were probably your best mentors when it comes to handling money and investing. They didn’t realize it when they were teaching you, and you didn’t realize it when you were learning, but today those words make sense.
1. Turn down the noise
Your father probably meant the music, but that “turn it down” is advice you can apply to investing.
Things are never as bad as they sound on TV, in the newspapers or in financial articles. Nor are they as good as they’re sometimes made out to be. In fact, we’re not on the edge of the abyss on Monday, and we’re not on the verge of economic recovery on Tuesday. This advice matches Warren Buffett’s when he tells investors to ignore the market and the analysts’ opinions.
Invest for the long term and switch off the music, or change the channel. In other areas of life, too, some people will tell you that you can do something and others that you can’t, and you’ll meet show-offs who claim they’ve done this and that. Tune all of it out.
2. Stay in school
Your father advised you to stay in school so you’d have the knowledge you needed and eventually get a degree. So you’d be successful in life and have no trouble facing the job market.
In the world of investing and money you also have to stay in school, because things are constantly changing: new investment products, new analysis methods, new companies that become investment opportunities, new bubbles and new crises. You have to keep learning and moving up a grade.
3. Keep your eye on the ball
If you played football as a kid, your father probably told you how important it was to keep your eyes on the ball when you were about to shoot or dribble. That’s great advice for your financial future, because one of life’s great truths is that you have to focus on what really matters.
Once you decide what’s important, you can set goals to reach it. The road to the goal may be easy or hard. Life will throw circumstances at you that try to take the ball away, but following our father’s advice, we’re going to dribble past the setbacks. How? By focusing on the ball (on what really matters), and when we see our chance, we shoot and score. (Read: 7 steps to reaching your goals in life and business.)
4. Don’t bet what you can’t afford to lose
If you played poker or Monopoly with your father, I imagine he told you something like this. Investing is no different from Monopoly, and it echoes an old line from an investor: some people, to earn money they don’t need, risk money they do need. It’s important to understand the risks and decide whether we’re willing to take them, in business and in investing alike.
5. Winning streaks come to an end too
We’ve probably all seen plenty of things that move in cycles. The same happens in markets and in business. When you’re making money is precisely when you shouldn’t spend it, and when you should push your saving as far as it will go. You have to get ready for the lean years, which always come sooner or later.
6. Don’t make excuses
Let’s be honest: when we failed an exam, it wasn’t always because the teacher had it in for us. In life, too, you shouldn’t make excuses. You have to own your share of the blame, or you’ll never learn from your mistakes.
7. Give up your seat to your elders
It’s basic manners, drilled into us from a young age, that many people forget once they’re adults. When it comes to finance and investing, make room for the opinions of older people, because even today the best advice still comes from the investing “old-timers”, by a huge margin over the new financial “gurus”.
Further reading
- 26 lessons to prepare your child for the real world
- 18 business lessons you’ll learn sooner or later
Featured image: Doggo19292, CC BY-SA 3.0, via Wikimedia Commons.
