How did you learn about stocks, bonds, investing? Investing vehicles? Especially if you weren't born with a silver spoon. If you parents had no investments and no idea what it was? What happened to change your course? And how did you learn live below your means and invest?
My friend asked me that yesterday most seriously and she talked about how her husband and her learned nothing from their parents. Their parents had middle class jobs and now retired with SS and pensions but no investments.
So they were savingbut didn't see meaningful growth until a friend (not me) told them to invest in QQQ and SPY. I mean i do that and alluded to it since i'm a bogelhead mostly.
But my mom was the same as her parents and still couldn't tell you the difference between a stock and bond. And she isn't even sure what a roth ira and 401k is. Except you put money in and let an investment guy handle it (it's how my parents got ripped off and they even had a lawsuit and settlement for the advisor who got censured, fired, and sent to jail). So my mom and dad were not exactly financially savvy and they didn't start with spoons either.
But luck and interest and tons of reading for me. Just reading books (before the internet).
Something of a "Brady Bunch" type of combined household with a bunch of siblings spread across a very wide range of ages, with me being the only one who finished college. I majored in a field that turned out to be lucrative for me. But you can bet that as soon as I finished college I got out of the small town and poor state where I was raised as quickly as I could. Even today, except for 2 of us, the rest of my siblings live within 50 miles of where we grew up. Their kids, however, are scattered across the globe.
Dad was a depression-era kid and Mom was just after. Dad worked for a megacorp and then opened up his own business but kept it tiny, unlike his former colleagues who had their own businesses and expanded them. Parents lived from paycheck to paycheck and never seemed to be able to save much, so the learning didn't happen there, except perhaps what not to do. Upon retirement, they lived off of their SS benefits, with some help from the kids. I'm beyond happy that we could help, but it was clear to me that there was no way I wanted to live like that myself.
Learning happened gradually at first - my first employer didn't have a 401K until I was there for a few years. Once that happened, I took about 50% of the raise I got every year and increased my contributions. But I still didn't have a clue as to what I was doing with my investments. Once I was hitting the maximum IRS limits, I opened up a taxable brokerage account and started investing in individual stocks (Dogs of the Dow anyone?). Eventually everything was in mutual funds with ranking performance of different funds over different time periods and updating my holdings probably annually. Clueless, but as least I was saving regularly.
Then 2008 hit. I was too busy at work (mainly laying people off) to pay much attention to my investments. But late in the year, I panic-sold everything and stopped 401K contributions. More stupidity. Anyway, the layoffs had stopped and I was coming up for air at work and started to spend some real time studying things like Asset Allocation, starting with Scott Burns' website. One month after the panic sale, I was back in, with something of a sensible allocation. But, hey, at least I had many years of capital loss carryover to show for having panic-sold! Also, I've been tracking everything since 2004 and despite some of the stupidity I did, things worked out well - sometimes being lucky works, but no way I could count on that as a plan, so the 2008 wakeup call helped to put me on a more sustainable track.
Over time, I continued to read everything I could get my hands on from the likes of Bernstein, Ferri, and many, many others, along with joining this group and Bogleheads. At some point I realized that there were enough bits and pieces I picked up along the way that I was able to use my math & spreadsheet skills to go beyond what most books and websites discuss. That allowed me to try out several ideas, confirm or dismiss what others have said and ultimately shape my investments in a way that suited me and my family. Things definitely evolved over time, always moving in the direction of more simplicity, as I learned more both during accumulation and on into retirement now, where things are quite stable at this point.
We have only 1 kiddo who is only a couple of years into a career post-college and one of the biggest gifts I've given to her is to teach her what I think I know. She's saving into her 401K up to the max corporate match and she's making regular, automated purchases in her taxable brokerage account, still leaving her plenty for daily life and the fun stuff that most 20-something get to enjoy. Hopefully she'll not be making any of the mistakes her pops did at this point.
Cheers.
