Why You Shouldn't Force Your Friends To Invest
The other day at a party, I got a crowd to get up and go out into the kitchen instead of sitting at the dinner table in the living room. Here's what went wrong for me...
An old friend was showing off her Gucci bag and commented that it was actually her daughter's. I asked, completely amazed, how on Earth a 15-year-old could afford to buy Gucci bags?!
The mother told me that her daughter had a casual job, and was simply very good at saving up money.
And that's really great, too.
But now imagine if she invested that money, instead of buying bags from it.
And it was here that I made the mistake. I said it out loud.
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Two Gucci bags could turn into 51 million
I told her that $10,000 invested in a stock index in 1942 would have turned into $51 million today, if someone had just followed the market index.
Imagine how much money her daughter could have had in the future, if she just invested the money she earned instead of buying Gucci bags.
What did I get out of it?
A less fun party.
And a feeling that I was talking like Mr Scrooge.
What did the mother get out of it? Nothing, either.
In any case, she did not start investing, nor did her daughter.
I am often asked how to get a partner, his mother or his best friend to save up and invest, and my answer will always be: leave them alone. They are on their own personal finance journey, and you are on yours.
It's better to keep quiet about what you're doing — at least among your friends who find no joy in discussing finances.
The truth is that people start investing when they're ready for it, and there's very little you can do to influence them.
A much better strategy, is to discuss investing with people who are further ahead in their journey as an investor than you are.
Choose the ones that are better than you
Warren Buffett was once asked by a 14-year-old what his best advice was for having a life of success.
He replied that it was surrounding yourself with people who are better than you, because you will naturally move in that direction.
To which his partner Charlie Munger - who always makes the sarcastic side comment - added: "And if it makes you unpopular among your comrades, then to hell with them."
Now, I don't think for one minute you should avoid family and friends just because they don't just understand stocks! Instead, I merely suggest that you choose what you want to discuss with each social group.
Aunt Edna and her sisters may think that shares sound terribly risky, but it may well be that she has the best carpet shop in town, so you can of course talk cleaning and vacuuming with that side of the family.
Perhaps your best friend from high school has a spending debt as big as Everest, but it may be that he's also the best tennis player in your entourage.
Then, of course, you can keep playing tennis with him every Wednesday afternoon. But make sure you keep the conversation going around tennis shoes and Wimbledon, and stuff like that. Should the conversation fall on finances and stocks – better hurry to get it back to the tennis ball.
We let ourselves get dragged down
It happens to be that we are all unconsciously trying to fall into the pack. It's a primal instinct that originally protected us thousands of years back. If we didn't fit into the pack, it meant we didn't survive.
That is not the case today. Of course, you can survive in modern society, even if you stand out, and today you can have many packs to switch between. But the primal instinct is still there. It's in your body.
Therefore, you need to keep quiet with your project to become financially independent in your usual entourage. You need to find another circle that is more like-minded in the field with which you can discuss it.
Of course, you're welcome in the Money and Freedom group on Facebook, where we discuss stocks and money on the loose.
You can also draw much inspiration from the biographies of rich men.
The book `The Snowball´ by Alice Schroeder gives a pretty good insight into Warren Buffett's life. Once you've gained insight into how Warren Buffett or Charlie Munger think, you can imagine how they would act in different situations. That way, you create some fictional role models that lift you up.
Read also: How To Set Succesful Money Goals
If you want to invest, feel free to download my checklist of 12 questions that you should ask yourself about a business before investing. You can download it here.
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