Should I learn to invest?

[GrandeOrso]

Investing really seems like a videogame, just that it can make you rich or broke for real.

I understand I should only invest money I don't need, and at some point I will inherit some, and I would like to be able to make them fruit.

Is it reasonable to think I can get into the market and make money ? How much you think I'll have to study as an indipendent ? Any resources ?

I like the idea of trading morr than long term investing. Buying on a low and selling on a high, with high numbers, for "small" profits in a short time. 

Is it better to hire a pro that does it for me ? 

Then also the ethical pov, morality etc is killing me, seems like you cant do anything these days that aint damaging the environment

 

 

[Yali]

 

 

 

Edited May 2, 2022 by Yali

[TheWatcher]

from my experience its been well worth the research. simply starting will teach you to spend wisely. not sure of your financial situation but having  options to invest when you have extra money is always a better option then wasting it on the small unnecessary purchases...  

[Yarco]

Yes with a couple caveats

1. Trading is not investing

2. You need to learn tried-and-true investing strategies from more academic sources like Investopedia. Not from Youtubers with paid Discord groups.

Everything has risk but true investing is never a "rich or go broke" scenario. Don't think you can "make money" in the sense you can create a job out of it. You can preserve and grow wealth in the long term. It will require hundreds of hours of study. If you want to trade, don't get into investing because that's how you will go broke. You just want the adrenaline thrill.... then set aside $20/month limit for yourself and go to the casino instead

Investing is boring and methodical and it takes months or years to see results. If you're having fun or it's thrilling to you, you're trading and need to stop.

If you're saving for retirement then it's better to hire a pro or invest in your company's plan than nothing. But for the average person I wouldn't let someone take a huge fee for the little bit of money I have after paying taxes on it.

Edited May 2, 2022 by Yarco

[jeffemmerson]

13 hours ago, Knowledge Hoarder said:

I think investing is overrated. Investing is ultimately a middle class activity. It's best used to build generational wealth - not "within this lifetime" wealth. You will never break out of middle class doing long term investing - your children and grandchildren might though.

You know, it's all about priorities at the end of the day. To get real wealth real fast, you have to be able to take massive risks, and provide shitton of value at the same time. Not everyone is build for that.

And before you say "but Elon Musk is a billionare and invests into bitcoin" he doesn't invest. He just plays with his money. He doesn't give a fuck if he loses or gains at this point - in fact, he's got the kind of influence and power to nake bitcoin rise or drop by 50% lol. The reason why Elon is investing, is the same reason why Coca Cola is able to produce shitty advertisements, and still be in profit. Because they've got so much money and influence already, they don't give a fuck. This is not a good strategy for regular people though.

Agreed. Investing for someday is bullshit in my opinion at 45. I can make due with very little and have a work pension....if I even live to my 70's. No thanks. Enjoy NOW, but sensibly. 

Edited May 3, 2022 by jeffemmerson

[mostly harmless]

As Yarko wrote: Trading is not investing.

You have to define your goals and risk tolerance.

You have to learn about your psychology, otherwise you will self-sabotage and shit your pants both when you have a big (unrealized) gain and the same when you are in the red. And then you make mistakes. 

You need to understand the market and have a plan what to do in which conditions. Otherwise, you are gambling.

You need to be patient. Warren Buffet said, that the stock market is a tool to transfer money from impatient people to patient people. True.

*Very important: The economy and financial markets are currently changing dramatically. You have to understand these changes if you want to invest long term in stocks. For trading, this is less important.

If you start trading, start with small amounts. You can also demo trade with virtual money. You can't train the psychological aspects with a demo account but it is the first thing you want to start with. Once you have the impression that you can make money, you start with a real money account but you trade small amounts and tightly control your risk.

You know the exact risk, money you will lose, when the trade you want to open goes against you and you are stopped out (sell at loss). If you don't know that risk, you do not go into any trade. That is the number one thing that you need to control. 

Writing that you have moral issues making money (by not working) is a limiting belief. If you keep that, your subconscious mind will find ways of sabotaging your efforts. 

The most simple tool to invest are ETFs. With an ETF you buy an index fund of many stocks, not just 1 single stock. That eliminates that work and risk of picking individual stocks.

 

The most important thing about trading/speculation is understanding probability thinking.

Watch Annie Duke, author of Thinking in Bets on youtube

https://www.youtube.com/results?search_query=annie+duke

 

Specific to trading:

Mark Douglas 'Trading in the Zone' (book + audio book).

Mark Douglas also made excellent video seminars that are on youtube especially 'Think like a professional Trader'.

https://www.youtube.com/results?search_query=trading+in+the+zone

https://www.youtube.com/results?search_query=mark+douglas

 

 

Books, audio books:

Peter Lynch 'One up on Wall Street'

Joel Greenblat 'little book that beats the market' https://www.youtube.com/results?search_query=little+book+that+beats+the+market

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Great channel for stock picking ideas:

https://www.youtube.com/c/ScottsStockDueDiligence/videos

 

Understanding the overall market:

https://www.youtube.com/c/RealVisionFinance/videos

 

Real Visions dedicated Crypto channel:

https://www.youtube.com/c/realvisioncrypto/videos

 

 

 

 

 

 

 

 

Edited May 10, 2022 by mostly harmless

[Ulax]

Can't speak from personal experiences. But some lads from an accountability group I was working with were doing really well with investing, and w/o any formal education. They had main jobs, but were doing it on the side.

I think there's value to it, definitely.

[mostly harmless]

1 hour ago, Ulax said:

Can't speak from personal experiences. But some lads from an accountability group I was working with were doing really well with investing, and w/o any formal education. They had main jobs, but were doing it on the side.

I think there's value to it, definitely.

Regular people can be successful in investing. People who are following their impulses with no plan and no self reflection or self control have no chance. But with a little bit of common sense, education, self discipline, it is far from impossible.

Edited May 10, 2022 by mostly harmless

[mostly harmless]

 

[Average Investor]

I made some decent money investing. However, the time and mental energy I spent wasn't worth it. It seems like the skill is only useful once you are already pretty wealthy. 

You can dollar cost average into the s&p 500 and likely out perform most people and hedge funds. 

[mostly harmless]

@Average Investor Here's where your time horizon, risk tolerance, and propensity for complexity come into play. 

When you are young enough and patient enough (that's why I mentioned patience and cited Warren Buffet, paraphrased actually) to do this for 20 years before harvesting your gains, then you can utilize the compounding effect.

If you are able to handle more stress and are smart enough, then you can make gains from shorter term opportunities.

That can be but doesn't have to be speculation bubbles. There are always sectors and individual stocks that make large leaps in relatively short times.

When nVidea added products for AI and self driving cars, their stock made a 8x in about 6 years (2013 to 2019). If you had invested in plant based meat substitutes when Bill Gates first talked about it, you would have made great gains as well. Same for investing in legal cannabis like Canopy Growth at the right time. 

And in crypto, if you got in in 2016 at the latest, you could have 100,000x'd your money by now.

There's always opportunities to get a quick 2x, 5x, 10x here and there in a time frame of a few months. If you are able to find these and repeat that a couple of times over the years, gains can be huge.

I do not however want to say that only huge gains in short time are worth it. If you are patient enough to wait some years, then you can make great gains slow and steady. So that is a get rich slow scheme, if you will ;-).

It depends on you which route works. And again, with an investment in companies like nVidea at the right time*, you can stay conservative and still multiply your capital. 

 

 

*I am not suggesting that you can 8x your money in 6 years if you invest in nVidea now. The time for that was a couple of years ago. But opportunities like it exist now.

Edited May 11, 2022 by mostly harmless

[Average Investor]

@mostly harmless I mean more so in the fact of how I feel day to day being into all of that. I have made over 10k in profit, but I could have probably just built a more serious business that would have generated a lot more. I am fine with all of that long term stuff, but in the day to day it really doesn't move the needle at my age. Long term investing really doesn't require me to hunt down 5x return stocks. 

 

[mostly harmless]

@Average Investor Gains or loss in percent in relation to time is everything. If you started with 1k and made 10k, that's 10x or 1,000%. If you started with 20k and made 10k, that's 50%.

If you start with 1,000 USD and you make 15% gains per year for 20 years, you will have 16,000 USD.

If you start with 1,000 USD, 15% gains per year for 20 years, and you add 200 USD per month, you will have invested a total of $49,000.00 and will have a balance of $322,906.49.

30 years: $1,280,977.91

35 years: $3,156,593.74

 

If instead, you work for 10 years and invest nothing. Then you invest 100,000 USD, add 200 USD per month, and make 15% gains per month for 10 years, you are at $499,064.73 total.

If you compare that with the first example, you are a lot better off. Compared to the second example, you are still better although not by the same margin.

The optimum is probably a combination of working to have more money to invest, but also start early. You can use the calculator to find your sweetspot for what you can earn by work versus yearly gains from investing that you find realistic. 

Things change, if you are able to find stocks that multiply in value in a short time.

 

 

You can see a few things in these quick hypothetical examples:

1.

If you start with very little money, it can make more sense to first skill up so you can work and earn as much per hour as possible, and then start investing a couple of years later.

2.

It makes sense however to start investing early, at the same time work and add to your investments each month.

3.

Compounding can lead to significant gains in short time later in the game, despite early on, you see very little.

 

 

Everything depends on the yearly interest and what amount of research work you have to put in for it to be worth it.

 

 

https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php

 

 

 

 

Edited May 12, 2022 by mostly harmless

[Average Investor]

@mostly harmless 

I feel it on long term investing. I am not a nay sayer to that. A lot of it could be done without a lot of chasing the hot things. Or just spending large amounts of time. I read a fair amount of books and watched quite a few videos. I have the skill now to invest well, but my investments aren't going that far without me having a solid income. At least in the more important part of my life. I don't care about being a millionaire if I am getting close to death lol. 

 

Edited May 12, 2022 by Average Investor

[mostly harmless]

@Average Investor I just updated my previous post. 

I am more or less confirming what you are saying here: It makes sense to take care of leveling up your income first.

[mostly harmless]

 

 

[mostly harmless]

 

 

 

 

 

[Optimized Life]

If you want to learn or get encouragement about either investing or trading, DON'T go to this forum for advice, lool. 

You can make a lot of money doing either, investing is the recommended strategy for 95% of people.

Most people on this forum have a grandpa boomer attitude to investing and it's embarrassing. 

As long as you have self control, patience and are good with research, you should be at least doubling your money every year just from investing alone ... But you must focus on generating an income for yourself first. 

Get good at both, income generation and investing. 

If you make 50K/year, then you can make 100K + per year easily from investing, a 2X these days is not some crazy casino thing it's actually very moderate, so I have no idea what these grandpas are saying here about "just ensure you beat inflation" lool. 

Here's some ideas for you for investing : 

• Crypto (very smart idea when the market is crashed, this is when you buy, when the fear index is as high as possible)
• Stocks (Not my favourite, but if you do good research ... just look at the TESLA chart over the last decade) 
• Oil, Gold, Silver ect... Doesn't take much research to know when to buy these, either buy in the right season, or hold a long time view, look at how much oil has gone up this year, this is pretty predictable if you 1. Look at world events or 2. Learn to read the chart (Not very hard at all, very basic) 
• Companies related to where the future is headed (5 - 10 Years) >> Tech, VR, AR, Self driving vehicles, DEFI ... 
• If you invest in well researched/established companies in these sectors, It's hard to put to words on how much an X gain you could get back, consider how much society will change in 5 or 10 years & these companies will be generating Billions and trillions.  

[Yarco]

33 minutes ago, Optimized Life said:

you should be at least doubling your money every year just from investing alone ... But you must focus on generating an income for yourself first. 

If you make 50K/year, then you can make 100K + per year easily from investing, a 2X these days is not some crazy casino thing it's actually very moderate, so I have no idea what these grandpas are saying here about "just ensure you beat inflation" lool. 

Show me your last 5 years of profits and losses. Tell me which silver or gold or oil company is going to 2x in the next year, or what's currently the next Tesla.

These statements are straight up delusional and dangerous dude.

People who went to Stanford and Harvard who work at billion dollar hedge funds can't make 15% a year consistently. You're telling people that they're going to double their money every year DURING A RECESSION with a few hours of research? Get the fuck out of here.

(I made an additional 33% of my  work income from crypto both last year and the year before. But if I did it this year I'd be down 50%+ looool. I'm under no illusions that my crypto money is basically gambling. I put money in a silver stock around the time of GME stuff and made like 30% in a week. Then I sold and put it all in a psychedelics ETF and its down like 75% since then lollllllllll. And I did it in a tax free account so I can't even use it for capital losses LOLLLLLL. Getting a steady 5-7% per year is way better for most people than risking suicide-inducing swings in your net worth.)

Edited June 5, 2022 by Yarco

[Consept]

39 minutes ago, Optimized Life said:

If you make 50K/year, then you can make 100K + per year easily from investing, a 2X these days is not some crazy casino thing it's actually very moderate, so I have no idea what these grandpas are saying here about "just ensure you beat inflation" lool. 

Just some figures but for a full time stock trader on wall street 20%-30% on average is considered top level, Warren Buffet for example had an anual average of 22% from 1980-2003. If youre doing day trading potentially you could make more but the risk is a lot higher, so the average day trader would make 10% per year but this is heavily weighted in the top 1-5% making great returns while the bottom 95-99% lose money. Even the top 1% would be lucky to make 5% roi per month consistently, also keep in mind the time and losses it takes to build up the skill of day trading. 

I would guess from your post youve only really got into trading or investing in the last 2 years, in which case it has just been astronomical growth for the whole period. This is the problem ive been seeing from a lot of people thinking that its so easy to make money 'investing', its kinda like if you only started watching football when your football team was winning  and then you say 'footballs easy, my team always wins'. So it gives a false confidence and people inflate the market only for it to pop and for there to be tons of losers, this has been the case with a lot of things recently but crypto was definitely the worst hit, luna dropping 99% and bitcoin dropping 50% in the last few months, these are massive real losses. The proof of any long term investing strategy is how it performs over a long period not over a couple years. 

I agree with @Yarco this is potentially very dangerous advice and its funny as you said dont go to this forum for financial advice and basically proved your initial point with your financial advice.