Start investing! A procrastinator’s guide

This blog is a summary of the conversations I’ve had with friends and the suggestions I’ve made to them. All content in this blog represents my personal opinions and do not represent those of organisations that I associate with in any personal or professional capacity. The content is provided for informational purposes only. The following is not intended to be investment advice. This article contains referral links because who doesn’t like referral links!

“Hey, Ben. I think I should start investing”

I’ve become ‘the money guy’ for most of my friends in recent times. The timing makes sense as:

  • Everyone is talking about the investment stuff — GameStop, Dogecoin and inflation — which creates FOMO
  • Interest rates are a hilarious zero percent so leaving it in your bank account has become a laughably bad option

🏋There is a massive inertia to start investing

It’s really difficult to make a start.

✅ Let’s get you set up in the easiest possible way

Like many things, investing gets much easier (and fun!) once you start. After going through this process with multiple friends, I’ve come to believe that getting people to start investing is about removing as much complexity as possible.

  • Advanced trading strategies
  • How to buy NFTs and Meme stock
  • How to boast to your bro-vestor friends about your ‘sick gains’
  • The right mindset
  • A model to get started: how much, how often, what to invest in

📈 What is investing?

Investing is the act of using your cash to buy assets such as stocks or cryptocurrencies with the intention of holding them and eventually selling them at a profit.

🏆 Why you should start investing

When I was in my twenties, I didn’t care about investing. As long as I had enough in my bank account to backpack round the world and buy a new phone every couple of years, there didn’t seem to be much point in amassing extra wealth.

  • 🇨🇳 Learn fluent Chinese
  • 🌍 Start an NGO promoting coding in sub-saharan Africa
  • 🚑 Worrying about an emergency e.g. a family member needing an expensive medical treatment
A great journaling exercise to do is to ask yourself what would you do if you had €1bn. Then do the same for €10m and then €100k.

Reason #1: Investing grows your money

If you buy and hold certain asset classes, each year they tend to increase in value. If you hold those assets over multiple years, the increase is compounding.

A $1k investment becomes $5.6k after 20 years with 9% per year. The reality is there are ups and downs in a market rather than a smooth curve.

Reason #2: Your wealth doesn’t grow in a bank account

Remember the days when you received interest on your bank balance? You might find it difficult as interest rates have been very low for a long time.

Central banks like the European Central bank and the Federal Reserve set interest rates as one of their tools to try and steer the economy. Keeping interest rates low is a way to encourage people to spend and borrow more, which can stimulate the economy. It hurts savers and rewards borrowers & spenders.

Reason #3: The value of your money is decreasing

To make matters worse, we have inflation. Inflation is the decrease in value of money over time.

https://www.visualcapitalist.com/purchasing-power-of-the-u-s-dollar-over-time/

Summary: You should start investing because

  • Investing over a longer period will return compounding gains on your wealth
  • You money will not grow in a bank account due to low interest rates
  • Your money is slowly losing its value due to inflation

🧠 The right mindset for investing

In 2013 I first discovered Bitcoin. I was surrounded by people who had a lot of Bitcoin and who had bought it earlier at a better price. I can be quite a competitive person and I didn’t invest because I felt like I had already ‘lost’ compared to them. Back then a Bitcoin was about $60. At the time of writing it’s about $48k.

1. “Good enough” rather than optimal

If you’re like me, you tend to try to find the ‘optimal’ solution, especially when it’s something as important as money.

2. Don’t let lost opportunities make it feel like you’ve “lost”

Ok, you didn’t invest in Bitcoin when you first heard about it. And you should have invested in the stock market after the March 2020 Corona crash like your friend said.

3. Think long term

People who invest and trade love talking about their gains, showing off how much money they made in a period of time.

The Wall Street Bets logo. 70–75% of retail traders lose money. You might get lucky, but most often you won’t.

▶️ Part 2: Let’s do this!

Startup advisor | Co-Founder & CEO/CTO @Nuri