The first job I ever had was horrible. I worked at a chicken farm gathering eggs on weekends. The job was very manual, and entailed me pushing a heavy-duty metal cart up and down very dusty and smelly rows of tightly caged hens picking up 4 eggs per hand and throwing them down into 30-egg flats over and over again for 3 to 5 hours (depending on what stage the chickens were at). At the end of the day, I would have averaged around 10,000 eggs gathered and needed to take a twenty minute shower to get the smell of the barn off of me. I was paid piecemeal, at (if I remember correctly) around four or five cents per dozen – it didn’t work out to a lot of money, but for an eleven year-old, it was quite a bit more than I had been making prior to that.
My parents instilled the habit of saving to me early, and would not let me just spend the money how I wanted to. I was “forced” to save money, and given very little access to the majority of funds. Through my parent’s investment advisor, a mutual funds investment, which I still remember (over 20 years later) being a Templeton emerging markets fund. Every weekend, I would check the finance section of the local newspaper and watch my “fortune” shrink and grow.*
One thing that I was allowed to buy was a Sega Genesis. My mom ordered this for me from the Sears catalog (I lived in a small town that had no electronics store, and this was pre-Internet 1991), and I had to impatiently wait the 3 to 5 business days for this awesome new toy to show up. My first ever game was “Sports Talk Baseball” and I probably played that for hundreds of hours – whenever nobody was watching our family’s one television that had 4 channels, I was on my Genesis, probably killing brain cells.
Since my Sega Genesis, I moved on to a Playstation 1, 2, and 3, as well as owning a Wii and X-Box 360. These days, I don’t play as many video games – It’s not due to anything other than I have other stuff I’d rather do – read more books or watch more sports, or spend more time with my wife. For 15 or 20 years of my life though, I probably averaged around two hours of video games per day. I liked the challenge of starting off in a game, being TERRIBLE at it, and slowly but surely getting better and better, gaining skills (useless skills in real life, but skills nonetheless) until I hopefully beat the game.
Personal finance is similar to video games. My personal finance life started with that terrible job, and having a savings plan strictly imposed on me by my parents, and continued on until today. Along the way, I have learned quite a bit from both experiences as well as following people’s lessons who are much smarter than I am. I somehow single-handedly paid for a University education, as well as the loans associated with those. I bought my first car, got a place to live, and paid off the entire mortgage of my house.
Similar to the video games that I probably spent too many hours playing, the whole process of personal finance is basically a grind. You save relatively small amounts of money, and slowly but surely through experience, luck or skill build up confidence and assets until you’re hopefully in a position that you can win. In my case, winning will be having a large enough portfolio that my wife and I will be financially independent by the time I’m 45.
Right now, I’m kind of at the beginning of the game – my portfolio is fairly small, the investments held are creating very little overall wealth on their own, and it’s kind of a frustrating process. I read as much as I can about investment planning and investment vehicles, but I am still pretty much a rookie at the whole “put money here and it will hopefully be worth more than it is now in a few years” strategy. Hopefully as time goes by, my odds of winning “The Personal Finance Game” will increase significantly.
*While I was writing this, I looked up the historical performance of this fund, and it has remained at essentially the same price point over the past 20 years.