The Most Important Thing About Investing is to Start

Mistakes and Lessons Learned

If I could go back to 2016, I would tell my younger self one thing: start investing immediately. I saved money for years but only began investing in 2022. In 2016, I did not have enough information, I did not know my options, and I did not know how to start. No one taught me about investing at school or at home. I started studying this field in 2021 after seeing an interview with Radovan Vávra, a former director of a Czech bank. He explained how simple the math behind investing is, which was a big surprise to me. Even elementary school children could understand compound interest and a global stock index. It baffles me that these concepts are not taught in Slovakia. Just show these two things in math class, calculate a simple example, and that is it! Our whole society could be richer.

So far in 2024, the MSCI World index has returned an average 11.75 %.

The Basics of Investing: Compound Interest 10 %

Let me explain it as simply as possible. Imagine you have two piggy banks. Every month, you put $10 into each piggy bank.

Piggy Bank 1: No Interest

This piggy bank just keeps your money safe. Every month, you add $10. By the end of one year, you have saved $120. If you kept doing this from 1980 to 2024 (44 years), you would have saved $5,280.

Piggy Bank 2: With Interest

This piggy bank is special. It not only keeps your money safe but also gives you extra money every year for keeping your money there. This extra money is called "interest." Let us say this interest is 10% per year.

After the first month, you have $10. After the second month, you add another $10, making it $20. At the end of the first year, the piggy bank adds interest, so you get more, like $120 + 10% = $132. This keeps happening every year.

If you have any thoughts, questions, or feedback, feel free to drop me a message at mail@richardgolian.com.