Start somewhere

In a recent financial mentoring session I was helping the client decide how to build her portfolio. We did the profile analysis, to understand her risk tolerance, we looked at the different instrument options and it was time to make decisions. When I asked how she wanted to divide her money into those different options, she could not come up with an answer. Rationally she was where she needed to be. Emotionally she was not ready. I realized a bit later that I was forgetting my own advice: start somewhere, even if not everything is clear.

This happens in many areas of our lives. Whenever we start something new: a training, a course, a job, etc. we are overwhelmed by the new amount of information and while we try to make sense of everything, it is only in hindsight that we can understand the bigger picture. We will get there, somehow. We will attend the first class, make the first movement, complete the first task. We will struggle a bit in some areas and enjoy and move smoothly in others. The same applies for our financial growth. We do not have to understand everything at the beginning. Of course we should not blindly move forward either. But if we understand even just the basics of the step we are taking and, more importantly, if we actually take that step, we will learn along the way.

The advise always repeated of not putting all our eggs in one basket remains valid. But we still have to start somewhere. If, for example, we start our investment journey with a lump of money we earned unexpectedly or managed to put aside for some time and, understandably, we are afraid to lose it, then we just start with a fraction of that money that we are comfortable with and put the rest in a savings account. This way, while we learn and make clearer decisions, the rest of our money earns some interest not completely losing its value to inflation.

So back to my client’s story: Instead of expecting them to have super clear how to divide all that money, I had to dial it down to these questions: what is the next step you feel comfortable taking? What are questions you want answers to before you take the next step? And then, I take them along that journey.

My own investing journey started similarly. First, it took me years to get the spending-saving habit in place and think beyond these 2 uses of money. Not letting emotions alone dictate where my money was going, but actually being intentional about how I used my hard-earned cash. Then, like many people, after a while I finally was ready to invest even if I still felt scared. I went ahead and put an amount of money for 3 years in a fund and in the end I got zero returns (and if I account for inflation, I actually got less :)). That money would have been better off in a savings account. But in that period of time I learned a lot and started making bolder and faster decisions about where and how to invest my money. If I had not taken that step, even if afraid, I wouldn’t have learned the lessons.

In the end, no matter how many courses, consultations, books and webinars we consume. Nothing like real lessons learned from actual life experiences. We can still gather those experiences accompanied by educated decisions coming from learning materials and supporting mentors and advisors, but it is our decisions and their results that will be the best teachers.

So even if you are a bit afraid, take that first step. Start somewhere.

Happy Tuesday,
Maria 🌺