Lessons From 8 Years of Investing

Roughly 8 years ago, I was working a minimum-wage data entry job. To put it frankly, it sucked. As a new grad, I sat there thinking about how I could escape and gain financial freedom. During my self-development studies, I came across a book by Tony Robbins called “Unshakeable: Your Financial Freedom Playbook.” It was precisely what I needed – a thought-provoking look into some of the greatest financial minds, including Warren Buffett. I soon started experimenting with investing through the Robinhood app, one of the first mainstream apps to make trading free and easy. However, I hadn't learned quite enough yet and was attempting to make quick day trades – resulting in quick wins and even quicker losses.

Following more reading, I learned of Warren Buffett's favorite book, “The Intelligent Investor.” It was a dense book, but with plenty of time at my mindless job, I was able to listen to the audiobook. I didn't capture everything, but the essentials were very, very simple: buy assets you understand and hold those assets for a very, very, very long time. And that's just what I did.

I was awful at saving, but now, whenever I had any extra cash from my job, I'd buy some stocks I believed in. I started with small, lesser-known alternative energy stocks, hoping to gain from supporting renewable industries. They were also the cheapest I could afford at the time. The first major stock I bought was Tesla. I remember the sense of achievement of owning the stock at $250. Over the next three years, I kept accruing stock in companies I understood and saw genuine value in – and critically, I never sold. In 2018 I even started adding some crypto to the mix, primarily Bitcoin. For three and a half years, I had seen little to no growth, but I believed in the assets I held and the power of compounding interest. Eventually, a bull market arrived, and by the start of 2021, my investments had nearly quadrupled.

Now, it's not all happily ever after from here. The following year, I was caught up in the hype of the crypto and NFT boom. Like so many others, I made some embarrassingly risky short-term investments that resulted in me very quickly losing nearly half the value of my assets. It was demoralizing to have played it safe for so many years, slowly gaining profit, only to give it away on such senseless gambles. But the bitter lesson was clear: never stray from the fundamentals. Following that loss, I reinvested what I could in several assets I saw long-term growth in, with the determination to hold for the long term. In the recent bull market (Spring of 2024), that decision has resulted in a near 120% growth in my stock portfolio alone (more than doubling my initial investment).

I am no expert (although I strongly doubt those who claim to be), but here are my essential Do's and Don'ts:

• Buy only assets for which you understand their value.

• Dollar-cost average. Buying small amounts over a long period will reduce your risk of buying in too high.

• Don't sell. You can't predict the future, but if you hold onto assets long enough, there is an opportunity for them to compound growth. Also, long-term profits are typically taxed lower.

• Start as soon as possible. The sooner you start, the more time you have to benefit from the long-term growth of your assets.

Best of luck.

Take care,

Naser

Support whj and mindfulnas

If you’re interested in trying out Robinhood, this link will get you started with a free stock, and support this newsletter too.

You can also support the newsletter and videos directly through buymeacoffee.com/mindfulnas.