wp:quote Don’t save what is left after spending; spend what is left after saving. -Warren Buffet /wp:quote I was fortunate to grow up with a
Dec. 22, 2017
Don’t save what is left after spending; spend what is left after saving. -Warren Buffet
I was fortunate to grow up with a Dad who strongly believed in the value of saving and the ability to make your money work for you.
Once we were old enough to open a Post Office account, my Dad would bring my two sisters and I into town every Saturday morning to lodge whatever amount of pocket money we had saved that week.
For every 50p we saved (yes, this was back in the “old days” of the punt, before the Euro was introduced), we were rewarded with a Cyril the Squirrel stamp. Every stamp we collected brought us closer to our ultimate goal of saving PS10.
Each week, I remember being so excited to see the squirrel stamps fill up my booklet, not to mention the healthy sense of competition between my sisters and I in the race to get to the top of the tree first.
I also remember the sense of achievement I felt each time I was “rewarded” with a stamp and the immense feeling of success in finally reaching the goal of filling up the whole book.
My little eight-year old self felt mighty!
Since that first experience, saving has always come with a feeling of achievement and reward.
For example, when I wanted to buy my first car, I was able to go back to my trusty post office account without having to take out a loan. Likewise, when I wanted to learn a new skill in jewellery making, I was able to do so with my savings.
I also gained an appreciation for money — how long it takes to be earned and how quickly it can be spent. Dad taught me that if I want something, save for it. That philosophy has stuck with me.
Another thing Dad passed onto me was an interest in maximising my money. It’s one thing to save, but it’s another thing to make sure you’re making the most of your earning potential.
As I grew up and learned about other opportunities–such as managed funds and stock market investing–my interest was piqued. I began to see how I could actually make my money work for me.
Back to 2010, I had just moved to London. Still interested in the concept of maximising my savings potential, I came across a company within the industry I was working that fascinated me.
ASOS, an acronym for ‘As Seen On Screen’, had the unique concept of replicating outfits that had featured in the movies and selling them at affordable prices. This pioneering approach to online fashion retail allowed them to steal a march on their market rivals. Doubled with their use of video (every single outfit could be seen worn live on a catwalk prior to purchase), the whole mix was unique and really sparked my enthusiasm to invest.
Back then, a share in ASOS was trading around the PS500 mark — not exactly a cheap stock! But while I was very much a novice to investing, I had worked in the fashion retail sector for some years and believed there was something very appealing about ASOS.
So, what happened next?
Well, despite my interest and financial ability to invest in one share, I found it very difficult to actually get investing.
Some of the hurdles in my way included:
- Knowing how to actually buy a share– not as easy as buying clothes from ASOS.
- Understanding the role of the brokerage — a bit of research was needed here but this learning helped me understand the first point.
- Identifying, evaluating, and selecting the right broker for me — this process fried my head.
- Identifying all the costs involved and how they affected my earning potential.
- The overwhelming use of jargon — I felt like I was learning a whole new language.
- Understanding what actually happened after I bought a stock — this information wasn’t clearly available to me, a novice investor.
- What do I do with my stock –do I sit and wait? What do I wait for? When do I sell? No education was provided by the brokers I came across, unless I wanted to pay a fairly hefty fee.
All in all, my main take away was that, while I could afford the stock, I couldn’t afford the process.
I now look at ASOS — currently exceeding PS6,000 a share — and think that the opportunity was never really there for me in the first place.
There were simply too many barriers to entry.
Reinvigorating my Interest
Fast forward five years to the end of 2015 and I was beginning the process of moving back home to Ireland. While researching job opportunities in the FinTech sector in Dublin, I came across MyWallSt on a list of top start-ups to watch.
Recalling my investment-that-never-was with ASOS, I was immediately intrigued by a little snippet I saw on the company:
Suddenly, the “So, why didn’t I?” was now beginning to look like, “Maybe I can.”
My interest in investing was reinvigorated and the excitement started to build.
After exploring the website, I downloaded both the Learn and the MyWallSt app. To this day, I can still recall sitting on my couch, opening those apps for the first time, and feeling sheer excitement at the possibility of actually being able to invest in stocks on my own terms.
Not only that, but I was also provided with all the basic information I needed in simple, straight-forward English!
(I then took it one step further and pestered them until they hired me, but that’s another story.)
I don’t want to turn this into a sales pitch for MyWallSt, but as a novice, I cannot overemphasise how amazing the concept was for me as someone who had previously faced all the barriers to entry. As a pure beginner, this felt like (and, in fact, turned out to be) the solution I had been looking for five years.
Everyone who works here at MyWallSt is an investor and, as such, has had to start at the beginning at some stage in their life. While each investing journey is different, there are definitely a lot of overarching pain points along the way that we can all empathise with.
For me, there were a few major learnings that I experienced along the way:
- Explore all of your interests from a different angle.
I was interested in the fashion retail sector and saw a financial opportunity in it. If it’s something you’re knowledgeable about, use that knowledge to your advantage.
If you are in a position to encourage your children, nieces, nephews, little cousins, younger siblings etc., to save, do it — even if it’s starting small.
- Start small.
As my Mum often says, “mind your pennies and they’ll mind your pounds.” Rather than buy a coffee every day, skip a day or two, start saving what you haven’t spent . If you apply that approach across a few small and regular purchases, you’ll soon start seeing how the small change savings can quickly grow.
- Spend a little, save a lot.
The first thing I do when I get paid every month is save 10% of my salary — if you don’t see it you can’t spend it. If 10% is too much, just save what you can and make it a monthly habit.
- Find your ASOS stock.
I strongly believed in the company because I knew the industry in which it operated inside out. This was a big advantage to me. I took it one step further and got to know everything I could about the company, which really helped me believe in its future potential. Plus, it’s an exciting feeling to have that knowledge and understand something in depth — if you can apply a monetary gain to that, then it’s a winner all round.
Mistakes will be made. I was a bit trigger-happy when I first started investing and I didn’t follow all of the rules. That means that I’m sitting on some stock that I just don’t know enough about and, unsurprisingly, some of them are the most underperforming stocks in my portfolio.
Thankfully, time is on my side. I’m happy to sit on them and hope they make a comeback. However, I’ve now decided that I won’t make another investment until I’ve learned everything I possibly can about the company first.
Here’s to happy investing!