What the stock market does and doesn't offer | Fin24

What the stock market does and doesn't offer

Nov 30 2016 16:59
Simon Brown

Simon Brown, founder and director of JustOneLap.com.

Related Articles

Basic but important investment considerations

Building a case for an investment

Adding clubs to your investment bag


The stock market, through trading or investing, has given me two very important things.

First, an ability to earn an income, be it a passive income via investing or a more active income via trading. Importantly, I can do this from anywhere with a laptop and internet connection. Second, it has ensured that I will be able to retire well. That retirement may not include a private island with a luxury yacht, but it will offer me a standard of living that meets my desired minimum level of comfort.   

It took me a long time and required a lot of skill sets in order to get these two benefits from the stock market. I got involved in the market as a 12-year-old boy when I inherited nine De Beers shares from my grandmother. That prompted my grandfather to offer to teach me about investing. 

In truth, his knowledge was limited as he’d really only been a jobber in the bucket shops of Durban in the 1920s. But it got me started, and importantly, it got me started with the only intention being to learn. I had no desire to be rich in a hurry or retire by next weekend. I just wanted to learn, so I read everything I could, tried ideas, pretended I had money to invest and started a paper portfolio that I ran for almost 10 years.  

This point about the desire to learn is critical. These days, people ask me to teach them about the stock market constantly, but they always come from a bad space and they are in a rush. They hate their jobs or their bosses. They have  huge piles of debt or just generally hate their lives, and they’re hoping that trading can solve their problems, and quickly.  

It can’t and it won’t.  

If you hate your job, get another one. 

Re-skill yourself for a new career, or ask to be moved to a new department. I know this is easier to say than do. But don’t think you’ll learn to trade while on leave for a week and then quit your job and trade from that luxury yacht.  

If you have a pile of debt, make a plan to pay it down. Seek debt relief, and just as importantly, change your habits so that you don’t just get straight back into debt when these debts
are cleared.  

In other words, trading is not going to solve the problems you have in your life right now. You need to solve your problems. Sure, the stock market can play a part in this in the longer term, but only if you’re first prepared to make the hard steps to get your life on track.  

I got a message recently from a reader who commented that “Wish I had this 15 years ago. It is the missing piece of the puzzle.” Aside from appreciating the comments, it got me thinking that knowledge needs to come to us at the right time. How often do we learn something and wish we’d known it years before? But would that knowledge have been of any use years before? Or would we have walked past it without even realising its significance? 

So while the stock market is a truly empowering thing to be involved with, it does not solve your life problems in the short term. You need to solve your problems yourself, and recognise that mastering the stock market will take time before it rewards you in many different ways, including financially. This is not an overnight process; you have to be prepared for the hard work. 

This article originally appeared in the 24 November edition of finweek. Buy and download the magazine here.


investment  |  portfolio  |  stock market

21 May issue
Subscribe to finweek