It is often the small things in life that can lead to the biggest lessons. As a young individual just starting their career, investing money is something I always knew I would have to learn.
Unfortunately, the world has a lot of false information about investing. And mostly, it is people trying to sell you their course about how they can make you 30% returns in the market.
However, I could land on a few good books and websites which gave good insights. It was interesting to see how others had used their money to compound it over the years of their lives. The biggest lesson I took away was to start early, and you will reap rewards.
Many people my age are obsessed with making loads of money and retiring early. I do not blame them for thinking in this way. After all, I thought like this for a long time and felt that my life was doomed if I could not retire before 50 years of age.
There were so many things I wanted to do, I felt like retiring old would not give me the opportunities I wanted. In my old age, I would probably be too slow to enjoy holidays and live what others call, “my best life”.
However, learning about the principles of investing and investing money gave me insight into life and happiness. I realised that I did not need to push myself out of full-time work to be happy. Instead, I had to learn to make the right decisions to ensure my fulfilment in the present.
Life Is About Taking Risks
Before learning anything about investing, I was scared of putting my money into the market. Funny enough, this is the reality for most people. They are scared to invest money because they believe it is too risky.
But when I learned about the principles of investing, I realised that investing was the study of minimising risks. It was all about finding the best trade-offs between safety and growth to ensure happiness.
Choosing to put our money in a savings account is a risk. By default, it is a risk because there are many other options for our money. The same with choosing a profession, a life partner or friends.
Choosing to invest money is a risk, but what makes it less risky is my understanding of the risk I am taking. When we take time to understand and grow our knowledge of something, the risk we incur begins to minimise.
Our lives are not all planned out for us. We have many choices to make along the way, and these choices have risks associated with them. There is always another choice we could have made. Therefore, carefully considering the choices we have is pivotal to making choices that are less risky based on what we want out of life.
As an investor, I look at a broad range of things before putting my money in. I do not simply close my eyes and hope for the best. Nor do I follow the hype because I think I can make a huge amount of money. Instead, I take a steady approach and consider the alternatives.
Fair enough, I may miss a few opportunities along the way, but I am not perfect. And knowing I am not perfect ensures I take more time to think about the decisions I am making.
And it is the same with life. Our lives are full of risks, and learning how to navigate them is key to our happiness. Choosing to follow others or make rash decisions is not the way to go if we wish to ensure happiness in the long term.
Happiness in Our Risks
There is no joy in having everything laid out for us. Without any alternate choices, we would live in a world where the risk taken is decided for us. And this would limit our freedom to build experiences and get the most out of life.
At first, our risks often scare us. Investing scared me for a long time. I was planning to put everything in a savings account and buy a house or two. However, once I learned about other options, I realised how risky that was.
Choosing to become an Engineer was another risk I took based on misinformed guidance. Due to desiring to have a high-paying job, I believed that STEM fields were the only thing I could go into. And although there is some truth to that, I certainly did not consider the risk of not pursuing my passion for writing.
We all take risks in life, and it makes life worth living. We learn from taking the wrong risks, and we are opened up to new opportunities when we consider alternate choices.
Our happiness depends on making the right decisions and taking the right risks. In doing so, we open our lives up to a range of possibilities and grow through our experiences.
Are You Taking the Right Risks?
I realised that working to retire early was not a risk I was willing to take. I enjoy feeling useful and working, so I would love to work to my old age.
Having the money to retire would be great, but I am not pressuring myself to do that either. In my opinion, a life of slow and steady growth is much more fulfilling and enriching. And my mindset only changed when I opened up myself to alternate options through understanding the risks of my current way of thinking.
For many of us, we struggle to critique our current thought processes. However, understanding the risks you are taking by thinking in one way is essential to opening your life up to other opportunities.
Take the time to think about the risks you are taking in your own life. That may be staying in your current job, choosing to study for an extra year or staying with your partner. All of these are risky. However, they can reap many rewards if they are the right risk for you.
Remember, just like investing, your happiness is dependent on how well you understand the risks you are taking. By understanding the risks in your life, you can find a good balance between risk and reward. And happiness lies somewhere in that balance.