Investment Lessons from my Grandfather

“Life’s tragedy is that we get old too soon and wise too late” Benjamin Franklin

An assortment of United States coins, includin...
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When I was 19 I started investing in shares. My grandfather was a lifelong sharemarket investor and he encouraged me to get me started. When I say lifelong investor I mean he bought and held forever – he hated selling. He didn’t even like when a company he owned was taken over, especially if it was an overseas company!

At 19, I was part way through an Economics degree and thought I knew it all ( as most 19 year old’s do!). Over time I came to realise that I knew far less than my grandpa did back then.

He taught me some invaluable investment lessons:

  • Be patient, investing is for the long term. Don’t check the price every day – it just encourages irrational decisions.
  • The value of dividends – if you buy a decent investment at a decent price and over time the income increases – what a great result.
  • Don’t be distracted by the noise of newspaper and magazine headlines – stick to your strategy. (And this was before the 24 hour news cycle!)
  • Save regularly and save often – make it a lifelong habit.

These lessons have been important for me in shaping how I believe financial success is achieved.

2 comments

  1. Great post, this is a key to success in the stock market. But it is also the reason a large majority of people, especially young people lose money on the stock market. Your lessons above are simple and easy to follow.

    A lot of young people these days don’t like simple and easy to follow. They see the above strategy as boring and as such they don’t stick to these basic principles.

    1. Well said Adam! I agree that the idea of a simple strategy that you stick to over time just doesn’t seem “exciting” enough to many people.
      I also find the saving lesson can be the hardest to get implemented. You can’t simply rely on growth to build wealth – you have to save and sacrifice!

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