One Step At A Time

When I first started investing, one of my "plans" was to buy a lot of stocks and live off the dividends. But I did some  math after seeing that 5-10% is right near the top of how much dividends can be paid.  I realized that my plan would work only if I was already rich enough to invest millions.

Before that, my other grand plan was to own a McDonald's or Jollibee franchise. In my mind, it was a practically sure way to rake in money. And of course that "plan" got scrapped after I realized a franchise costs several million pesos.

Before that, my grand plan was win the lottery. Thankfully, I did not "invest" in this plan. Up to now, I've yet to buy a single lotto ticket.

And if I had been more of a people person, I would have probably joined several multilevel marketing schemes by now - a lot of which might have been scams too.

My problem, of course, is that I want to get rich now. And based on my "plans", get rich now without much effort.

Eventually I was resigned to the fact that I would not get to experience being wealthy. So basically, yeah I gave up.

It wasn't until later that I began to appreciate that it would just take a while. But it wasn't impossible. Instead of looking for shortcuts or hoping to get lucky, what I really need to do was establish my foundation: save, learn, invest, create an additional income stream - and keep repeating it.

But oddly enough, I'm not writing this to share what I've learned. I'm writing more to share what I should keep learning and doing.

Last February, while still high on some great returns from stock trading, I foolishly bet big on a stock I didn't know - after already learning the hard way not to bet on things I don't know. My reasoning was, the bigger the bet, the bigger the payoff. In my case though, it was more like a bigger loss.

I bet around 80% of my trading fund on a stock I didn't know enough about and hadn't even heard of until a month or a few weeks earlier. In basketball they call it a heat check. And in basketball it usually misses - and sometimes misses wildly. For me, I lost 8% - not that bad, as I've thankfully at least learned to cut my losses and move on. Still, it was the biggest loss so far for me.

Just goes to show (me) that learning is an ongoing process. And learning doesn't amount to much without practice.

So after that, I went back to the basics. I'm saving as much as possible (up to 20% of my income now). I'm constantly learning how to invest, and researching the companies I know. And I'm actually investing again, not just gambling legally. :)

Hopefully one day (next year or the year after, if my plan works out) that second income stream will be realized as well.

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photo credit: antefixus21 via photopin cc

1 comment:

  1. Nice post Carlos I can also relate hehe specially when I still need to work and have a steady income even if not happy or inspired at my current job. I'm always tempted to take the "easy way" that would make me lose focus on my goals and the correct path in achieving it. Yes I also go back to basics since it always helps me to re-focus and be patient again.