Some readers emailed me privately wanting to know about stocks and financial statements. Here is my two cents worth.
I remember two things that my financial planner made me do so I will not be overwhelmed by stocks (well) and so that I can understand it:
1. He asked me to look at the business page of the newspaper everyday, the Stock Exchange page to be specific, and to choose at least 10 stocks that I will track and follow day after day after day.
He was right. This gave me more than what I thought it will give me. At the beginning, yes, there was confusion, and then after some time (six months… and going), illumination. I had a “feel” of the market, and somehow, my “gut” was developed. I would know if stocks are on the rise, or if it is on freefall, which is the time to buy. The green and the red arrows in the newspaper actually meant something, but only as supplements to the general, wonderful, engaging world of numbers. And when I recently had a report on my stockholdings and saw a 5% growth rate per month, I knew why a lot of other people play this game, and why they become greedy.
I have to breathe and close my eyes, take my time before this means something to me. I have always been made to believe, I have always thought, that education is very, very important.
As a matter of fact, a lot of poor parents put this on top of their agenda. They can be overheard telling their children: “Your education is the only inheritance that we can give to you.” The unspoken plea: please graduate and take us out of this pitiable, desolate, godforsaken place. So they sell their only cow, the grains, their time, sometimes their souls, just so their children can go to school.
I could never get enough of Warren Buffett. I follow him on Twitter (and follow everyone he follows), his name would be the red flag that would make me read financial reports and updates (and countless finance websites I subscribe to that send me maybe 20 emails a day), and I even tried to join his 10,000 Women.
I cannot help it. He was there at my first foray into the world of money and investment through a book given to me by a mentor:The Tao of Warren Buffett, by Mary Buffett and David Clark. That introduction so inspired me that I have dedicated my life to learning all I can about this enigmatic thing, wealth, which has the power to change lives – not only the money earner’s but everyone’s. Buffett, the philanthropist, showed that it can be done (and should be done). I moved on to learn the principles of Kiyosaki, Orman, Coelho, Bo Sanchez, Ramit, Tim Ferris, Dan Kennedy and countless others.
But I always go back to Buffett and his principles. Here are three and some life’s lessons.