Wow, things change fast in less than 10 years. Peer-to-peer lending was quite good for us for a good while, but it was clear some of the companies were in trouble when the economy took a downturn around Covid so I got out of them before things went bad and defaults ticked up.
We've done quite well with our investments and built up quite a decent nest-egg for retirement. So you can start late, and you can catch up and can get ahead if you put your mind to it and are disciplined. Most people don't, even without the "excuse" that they were brought up believing that growing old wasn't going to be a thing.
Of all the things there are to learn about investing I think the most valuable to me has been that prices are often a measure of psychological views of a stock as much as the real finances of the company. When things look good, prices can go up with the euphoria and amplified out of all proportion (why there is so much "hype"), and when things look bad everyone wants to sell. Knowing this, the Rothschilds quote that "the time to buy is when there's blood in the streets (even if it's your own)" makes sense, repeated by Warren Buffet as "Be fearful when others are greedy, and greedy when others are fearful". It doesn't mean you should buy underperforming stocks just because they are cheap but when markets take a tumble because of some world event or uncertainty, it's almost always a severe overreaction and there are bargains to be had. An example of this was Covid, when you could get some high quality stocks at bargain prices, especially Oil & Gas. It's not easy, your instinct will be screaming not to, but it's the best time to buy.
The other thing is to let your winners ride - don't sell stocks because they are hitting their all time highs, they can always go higher. There are lots of stories of people selling stocks like Apple and Microsoft decades ago because they thought they had grown so much, but they kept going up and up and up. Some stocks are worth keeping hold of for the long-term (and investing should be long-term, most people lose money when they over-trade). But of course if the fundamental business of a company is being eroded, then it's time to reconsider and take profits. But likewise, if a stock isn't doing anything, or is underwater, consider getting rid of it - it's psychological to want to wait until it recovers so you don't "loose" but you'll always loose even if it does, because other stocks would have gone up more in that same period. Don't be afraid to kill losers and move the money to something better.
Finally, I've changed my views on paying off debt. While in theory it's mathematically better to get 5-7% by investing while paying off 2% debt as slow as possible, the typical scenario is for a mortgage and as we've seen, things change. You can't guarantee that your mortgage renewal won't be +7% due to the clowns in charge of central banks printing phoney money. Paying off debt while it's cheap is always worthwhile IMO because it gives you future options and prevents the chance of renewal shock. We were lucky with timing to get a 1.79% rate and by overpaying we'll have it paid it off when it comes up for renewal next year. Mortgage freedom is priceless, and you'll then have your mortgage + overpayment amount to invest with less worry.
Finally, realize that what you hear on the news about the economy, and what you hear from the government and bankers is pure lies. They are stealing your wealth with their money printing and taxes. If printing money doesn't cause inflation, why do they need taxes at all? Just print it instead ... If you consider that a 3% management fee on mutual funds take 50% of your wealth over a 25 year period, what does inflation being 2-8% for your entire lifetime do to your wealth when it applies to every penny you ever see, for 70+ years? For similar reasons, I don't think the traditional 60 / 40 split of stocks and bonds is a good idea, so I stopped bothering with bonds, which has been a good option (gold and bitcoin are possibly both better options). Oh, and never get investment and retirement advice from anyone who sells investment and retirement products to you, especially if they make commission on them (so steer clear of high-street banks who invariably want to recommend products that hold their own banks stock). Also, look at how much investments actually grow vs the balance just going up because you're contributing regularly. Banks are keen to focus on the increase to keep you paying in, to take their fees. I'm not a professional investor but I've done significantly better than what the "professionals" at the bank managed.
What else? Obviously, spend carefully - especially when it comes to subscriptions. Do you really need all those streaming service and such an expensive phone data plan? Is there anything going out of your account each month that you just forgot about, for services you rarely use? Surprising how they can creep up on you and cost so much over time.
The absolute best thing to do overall is to track your net-worth. Every account, every asset, every debt - keep a track of the balances. You don't need to track every cent of every transaction or budget for every penny you spend, that's too time-consuming and soul destroying, just record the balances on a regular basis whether that's weekly, monthly, or yearly, make it a habit and it does two things:
It (hopefully) shows that you are making progress, because long-time-duration changes are often difficult for us to notice. When you see progress it encourages you to keep to the plan and do more, especially if you really do need to do more to hit your targets.
It gives you early warning if things are going off track. Maybe your investments aren't growing as much as they should, or your credit card debts is trending upwards, whatever it is an early alert will make it an easier problem to solve.
Share any tips you can think of and experiences you've had with investing!
