Aloysius and I attended the SYC Young Investors Forum, organised by SIAS Youth Chapter, yesterday. We make it a point to attend such events at least once every other month so as to network and learn from fellow investors. While the topics being discussed were very basic, there were some key insights shared by the speakers that I felt shouldn’t be kept just to the audience in the room. Hence, the purpose of this post! So aside from the free Long John Silvers breakfast sandwich and a bottle of water, here are our key takeaways from the forum:
1. Share Your Goals With Friends
Based on a study, people who do not write down their goals have a 43% chance of achieving them. People who write down their goals have a 64% chance of attaining them. This is because it makes us accountable and serves as a reminder to us. People who share their goals with their friends have the highest chance of achieving them, at 76%! By sharing our goals with our friends, we are not just accountable to ourselves but to them too.
2. Pay Yourself First
Most people save according to this formula: Income (1st) – Expenses (2nd) = Savings (3rd). They spend their income and save whatever is left at the end of the month. The problem with this formula is that it does not force us to think of ways to reduce our expenses and would most likely lead to less savings than originally planned. Instead we should save according to this formula: Income (1st) – Saving (2nd) = Expenses (3rd). We set aside a fix amount to save and use the remainder to pay for our expenses. This method forces us to think twice before we spend our money unwisely
3. Luck Plays A Part Too
Investing is not an exact science. If it were, the richest people in the world would be statisticians, scientists, and historians. In investing, there is no certainty, that is for sure. The role of luck in investing acts like leverage, it either magnifies your gains or your losses. Hence, we as investors need to always be prepared for unforeseen circumstances and greater magnitudes of price gains or losses.
4. Investing is simple but not easy
Charlie Munger once said that: “[Investing] is not supposed to be easy. Anyone who finds it easy is stupid.” A great example would be weight loss. Weight loss is simple, we know what we need to do and how to do it, but why aren’t we all fit? It is because weight loss is not easy. The discipline, drive, and consistency required makes weight loss difficult. Furthermore, successful weight loss is not about losing X kgs, it is about keeping that shape for the next 10-30 years! Investing is exactly the same!