Dear Daughter,
To Invest in something is simply to put your money to work for you in different ways in order to make more money.
There are so many different ways to Invest that it can seem confusing and intimidating. We have already talked about the Interest you earn by putting your money into the bank. That is an Investment because your money is making you more money.
We are going to dive into several different types of Investments in future Memos. We are not, however, going to talk about all of them because you (and I) don’t need to. There are just a few that are essential in order for you to grow your money successfully and consistently. Those are the Investments you need to fully understand.
One of the things I want you to get about Investing is that it is NOT difficult. It takes some time to understand the basic concepts but after that, it’s pretty breezy!
That won’t stop people from telling you that Investing is complicated and dangerous. People are going to tell you that if you do it yourself you are basically gambling and the odds are stacked against you. They will say that the best thing to do with your money is to turn it over to “the professionals” and let them invest your money for you.
Listen to good ‘ol dad on this one……..THEY ARE WRONG!!!!
When people tell you that, they are speaking from a place of ignorance. Either they don’t understand Investing themselves or they are trying to sell you something by scaring you.
In future Memos, we are going to discuss Financial Advisors and Financial News Networks; otherwise known as “the professionals”. Until then, just understand that you don’t need them in your life on an ongoing basis. Financial Advisors are great to use when you have a question about your investments or your overall investing strategy. However, once you feel better informed, walk away and only come back when you have another question.
Do not under any circumstances turn your investments over to a financial advisor to manage them for you. Seek advice, but do the investing on your own. It will save you a ton of cash over your lifetime.
Investing is fun and exciting! Please don’t let all the terms and other people’s opinions get in the way of you having fun and making money. Sure you are going to make mistakes and lose money every now and then, that is completely normal. Your wins will far outweigh the losses however and you’ll come out way ahead in the long run.
Love, Dad
