My fascination with investing, trading and compounding started in the first half of 2007 when a couple of stockbroker acquaintances of mine first introduced me to the concept of allowing money to work for you, i,e, making money from money.

As an undergraduate in my penultimate year, I vividly remember my first reaction I  when I saw people invest in the capital markets and reap returns –  Life is so not fair! I thought. This is because I saw firsthand that, in life, you really do not get rewarded for simply working hard, NO, you get rewarded for working hard at working smart.

That got me SO excited, so I invested! And unfortunately for me, I got lucky and made astonishing returns the first few times I invested.

Soon, like your typical newbie investor, I started to see the financial markets as a get rich quick scheme.

Immediately, I started a campus based investment club, and even hosted a massive campus wide seminar advocating financial freedom via stock market investing. But because all I was focusing on were the rewards, I never really saw the inherent risks.

I arrogantly and naively attributed the growth of my portfolio to my personal investment competence, not realizing that the  stock market was generally upbeat, with the Nigerian Stock Exchange All Share Index (NSE ASI) growing on increased FDIs, even in the absence of solid underlying economic fundamentals.

I see now that those were all warning signs of an impending bubble burst.  Alas, back then, I was mistaking beta for alpha ( don’t mind me, I like using technical words, makes me feel smart).

I never took time to really understand the risk management and profit producing process involved in capital investing and obviously I got my fingers badly burnt in a short while. Why? My expertise and knowledge base were very limited relative to the investment opportunities which I was pursuing.

What did I learn from all this?

Your amount of wealth is directly proportional to your amount of wisdom, ALWAYS.

If you have a $1,000,000 idea or mindset, your bank account will eventually grow to $1,000,000 as you deploy those inner resources and abilities. However, if you get a $ 1,000, 000 bank balance (say, from an inheritance, a stroke of luck, a gift or something)  yet your mindset and attitude remains at a $1000 benchmark, then, eventually your bank account will shrink to reflect your mindset.

Do not try to grow your bank balance. Rather, focus on growing your value as a person and then deploy that improved value in a structured environment and watch your networth grow also.

It is your responsibility to understand your investment edge, refine your investment edge and only then can you exploit your investment edge consistently. And on handing over your portfolio to someone else to manage, that is a matter for another day.

All I will say for now is know how your investment portfolio is being managed. This is because if things go bad, you have more to lose than the fund manager does.




    • @Linda, thanks a lot. I am glad you enjoyed it. Please follow, like and share also. I will be posting at least 2 informative and practical resources/articles weekly that you will find interesting. So, in the famous words of Nollywood…watch out for Part 2, and 3 and 4…infinitum.

  1. Favorite line, “Your amount of wealth is directly proportional to your amount of wisdom, ALWAYS.” Nice write up. Thank you for sharing and I’ll keep coming back for more 🙂

  2. @Ogechi, thank you so much for checking out my blog. And I love the fact that you are also doing great stuff on personal finance via your own blog

    @whizhard thanks for reading and commenting…most grateful…
    I was fresh outta 20 years old when I started, which is late, compared to the great traders below…but my kids will start early, though…if they are interested in trading.

    At the age of 14, Micheal Platt (Blue Crest Capital) wagered 500 pounds on a little- known British shipping line named Common Brothers, which soon tripled in price.

    At age 12, Ray Dalio (BridgeWater Associates) began investing when he bought shares of Northeast Airlines for $300 and tripled his investment after the airline merged with another company.

    At 11 years old, Warren Buffet buys his first stock. He purchases 6 shares of Cities Service preferred stock [3 shares for himself, 3 for his sister, Doris], at a cost of $38 per share. The company falls to $27 but shortly climbs back to $40. Warren & Doris sell their stock. Almost immediately, it shoots up to over $200 per share.

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