How I learned investing
Learning how to invest is a long process, but it is not rocket science. You just need to be patient, learn about altruism and stick to the most reputable professionals and not to newspapers or bank advisors who just try to sell you out. In the following article I will summarize the way how I started investing.
You should always bear in mind that there are different ways and opinions on how to reach the same goal. Hence, there isn't a single version of the truth. However, I would like to give you a brief overview how I got started with investing:
2006 - 2009: Back in school and without any clue
When I was about to graduate with Abitur (A-Levels) from High School. I didn't know anything about finance, taxes, insurances or accounting at all - nor did I have any interest in learning it. I thought was ready to concur the world. I just wanted to enjoy life.
My key learnings on finance and investing from this time: none.
2009 - 2014: Traveling the world and studying Industrial Engineering but still with almost no clue
When I left school, I had no idea what to study, but I knew I wanted to travel the world and learn more about different cultures. Thus, I decided to travel to Australia first and enroll for an international Industrial Engineering program in Bremen, Mexico and Spain afterwards. During my first years in university I was more focus to enjoy student life outside classrooms rather than studying for my exams. My grades where good, but I did not exploit my full potential though.
It was while studying in Mexico when I first learned more about strategic management and corporate finance. This was the first touch point with the subject of finance and I already knew from that moment I wanted to learn more.
My key learnings during this period to become a serious investor:
The worth of money - I always got financial support from my family but it was not sufficient to make a living. Hence, I always had to work after class in all kind of jobs.
The importance of intercultural communication - Studying and working in Mexico and Spain plus taking classes in English helped me to find new friends around the globe and to learn more about globalization.
How a business works - My first business classes where very basic only, but taught me the interconnection between different departments within the company like sales, marketing, finance, logistics, controlling etc.
Unfortunately, at this time I did not have any money left to invest or to save, but I already started preparing my mindset. All I had invested so far was for my personal education.
2014 - 2017: Focusing on two graduate programs on investing in parallel
After I finished my undergraduate program in Industrial Engineering with a B.Eng. degree, I decided to move on with a graduate program in finance. This time, I told myself, I want to be a serious student and not focus so much on my life outside classroom. Hence, I moved to a different city where I had only small deflection. Again I got financial support from my parents, but still it was not sufficient to make a living. I was now facing the issue how to focus on classes and earn money to make a living. I decided investing in my education for the next two to three years is worth taking a student loan.
I took classes in various subjects like advanced financial economics, corporate finance, financial markets, banking, risk management, accounting, and taxation. Thanks to my straight focus my grades increased and the university offered me to enroll in a second post graduate program in business law and economic law. I saw the opportunity and accepted. Eventually, I started taking additional classes in subjects like international trade law, commercial law, tax law, and capital market law.
It was a great experience to focus on my studies only. The high quality classes I took taught me how to deal with advanced finance matters. I learned the fundamentals in investing and how the Nobel Prize winners in economics developed their leading theories. On the other hand, in my leisure time, I red books about investing and financial markets.
My key learnings during this period:
The importance of financial theory - Many people call themselves investors without knowing much about the fundamentals. You don't have to agree with the theory, but you need to know.
How markets work - Understanding markets and economic principles are key for the investor. It is not about knowing that the price is where demand equals supply, but much more.
How to learn from the best - While studying I red a lot of articles from Noble laureates and leading investors. It is key to rely on the serious sources and not on newspapers or any sales persons advice.
The importance of law and taxes - You can never make an investment decision without knowing the impact on taxation and how to deal with legal issue.
The importance of accounting - How would you want invest if you are not able to read a company's financials? Knowing about accounting is key.
At this time, I still had no money left to invest in the stock market. All I had invested was for my personal education - and it was worth every dime.
2017 - Today
After I graduated with honors (M.Sc.). I decided to apply at a management consultancy firm. I landed a first job as an intern with Volkswagen Consulting and gained a lot of experience advising C-Level executives of the whole Volkswagen Group. I was still enrolled in my second law program, but I took a break from classrooms to focus on my professional career.
After my internship with Volkswagen ended, I decided to move to Hamburg and continue to work as a management consultant. This is actually what I still do until today. It was always a pleasure and helped me to gain a lot of hands-on experience. I worked with a various clients around the globe on challenging projects with a focus on strategy, accounting and finance. In 2019, I finished my second graduate program also with honors (LL.M.oec.).
My key learnings during this period:
The importance of continuous learning - Never stop learning and investing in your personal education. Be open for new technologies and change.
How to combine theory and practice - I work with global corporations on challenging and exiting projects where I have to combine both theory and practice.
This was actually the first time when I could start saving and investing money. Still, investing in your personal education is key.
Invest in your personal education, listen to others, learn about different cultures, be humble, be social, be respectful, be open minded, have fun, be serious, be tough, be critical, rely on experts, question every advice from your bank sales person.