The stock market.
Never have three words created so many different ideas for so many people. I’ve heard people call it ‘gambling’ and ‘corrupt’ and ‘evil’. Most people perceive wealthy hedge fund businessmen running around in their thousand dollar suits and hundred thousand dollar fancy cars. There is such a discrepancy in people’s thoughts about the stock market.
For me personally, I simply find it very very interesting. As just about everyone does, I have a relative who is an investment adviser. In a short description, he sells mutual funds. Of course, he also sells insurance and other things, but primarily he takes peoples savings and invests it into ‘diversified mutual funds’ in a blanket of safety (often mutual funds are spread into bonds and other less volatile investments for protection). At first, I thought, hey mutual funds sound appealing. All the benefits of investing without the headache or concern of doing it yourself.
A few years ago I read Anthony Robins book: “Money: Master the game”. While it is definitely a long read, it preached again and again the pitfalls of mutual funds, calling them the trillion dollar scam. Also calling them witchcraft. In a simple to understand way, Anthony explained two important things about mutual funds:
- Over a period of time, over 95% of mutual funds won’t beat an index fund
- The small 1%-3% fees associated with ‘managing’ of mutual funds creates a gigantic money pit of terror for your investment.
So this got me thinking. If I could avoid the 1-3% mutual fund cost, and do so in a way that made sense to me, why not? OK wait a minute, let me back up 7 years.
In August of 2010, I started a small online business called CanadaVapes. Started from my basement on a shoe-string budget, for the first 1.5 years nearly every penny earned was re-invested into product purchasing. During the early days, I had other business adventures going on, so Canada Vapes was part time for me. Sometime near the end of 2012 I had a month where gross sales exceeded $10,000, and I decided to transition all of my attention to Canada Vapes.
Long story short, moved out of basement into 600sq ft office space, then within a year into a 2700sq foot office space and two years ago, opened a retail store in London, Ontario, Canada. We now have 12 staff, and are actively looking at a second location.
I do not have the mindset of a small business owner. I don’t like the idea of being a ‘boss’ and handling the day-to-day operations of running a small business. It kind of crept up on me slowly, and before I knew it, I was figuring out raises, creating HR templates, and running monthly staff meetings. Not something I was too keen on. So, at present I am actively attempting to remove myself from the ‘day to day’ operations, and allowing myself to (part time) focus on the big picture business matters, as well as getting into other adventures (stocks being one of them).
So that is my base. I currently have a few dollars I can invest, and have a fairly high threshold of loss. Ok let’s continue.
So mutual funds. I am not going to lie to you, I still have money in mutual funds. I have taken out a portion of my savings from the mutual funds to ‘tinker’ in stocks, and also in index funds. As I get more comfortable, my plan is ultimately to be in control of all of my savings and diversify myself into both high risk and low risk investments. I have ideas on property purchases, bonds, index funds, stocks, and maybe even a new business, as i have many ideas.
My general idea is to ‘make my money work for me’ and I have no issues doing this actively. I am excited about the stock market, and while it is terrifyingly complicated from the outside, every day I study and learn it slowly becomes easier and easier to at least understand the fundamentals. I hope this journey, as have my past journeys, help me to continue to diversify my life in new and exciting ways. And ultimately, if you are reading this and following along, you too!