Meet Danielle Town, a New York Times bestselling author, popular podcaster, startup attorney, and Investing Practice expert. Danielle started out desperately afraid of numbers and stock markets until she took her head out of the sand and discovered that, with a little knowledge and practice, her weaknesses were actually strengths. Here she shares with us some tips on starting out in investment:
A few years ago, I was running ragged, and had zero space in my brain for the future because right NOW required all my energy. I desperately wanted financial freedom, but any time put into investing would take from everything else I HAD to do. Solution? I brilliantly decided to simply save my money and assume Future Me would magically know what to do with it – until I found out inflation annually reduces the buying power of my savings at an average of 3% per year. Yeah. I was essentially losing money, without doing anything wrong at all!
So, I finally took action to find financial freedom – and it turned out to be far from painful. Focusing on investing became a great part of my life – much to my surprise – and gave me a way to be powerful beyond myself. I discovered that my money is an influential vote, and that vote is something I should not abdicate to someone else. My money has the same power in the public markets as it does in my local grocery store and, just as consumer choices have dramatically changed grocery offerings, it can change the world. I am a warrior with my money, and I dove in to investing in companies with a Mission.
Here’s how I started as a newbie investor:
Treat investing as a practice:
Just like my yoga practice, learning investing is a gradual process. I’m a newbie, and that’s not only ok, it’s actually a strength to recognize my fear. I started simply, by reading the business news. Only the interesting articles, so that I would stick with it without pressure. Merely by reading regularly over a few months, I started to learn the language of finance until, one day, it clicked. I had opinions about the companies. Suddenly, this investing stuff got really interesting.
Assume most companies are Too Hard:
It turned out, many everyday products and services are owned by public companies, and I not only knew about them, I had opinions about them. That gave me a strong starting place from which to decide what I wanted to research more, and what I would discard to my Too Hard pile. All I needed was to focus on companies I liked and could understand. No reason to get into anything more obscure.
Fall in love:
I refused to do anything until I fell in love with a company and could predict, with confidence, its ability to withstand competition and be more productive in the future. Only then would I pull the trigger and buy.
I’ve now written an entire book about how crazy it’s been to learn investing called ‘Invested: How Warren Buffett and Charlie Munger Taught Me to Master My Mind, My Emotions, and My Money (with a Little Help from My Dad)’ with my investor father, Phil Town. We also have a top-rated podcast, InvestED where we banter about value investing and life. My investing practice has given me the skills to confidently value private companies, real estate, and other investments, which is invaluable beyond my investing practice. Without it, my life would be – figuratively and literally – less wealthy. I love reading about publicly-traded companies and get annoyed when I can’t fit it into my day. I know – WHO AM I? It’s pretty good to feel free.
Pre-order your copy of Invested here and be one of the first to receive it in the UK (release date October 2018).