That Time When I Lost Nearly Everything I Had

I remember the first time that I invested in the share market. I bought into a company known for selling secondhand goods, although they made their real money through high-interest pawnbroking and lending.

It was an investment made on a gut feeling. I enjoyed shopping at their stores. They’d been receiving significant buzz in the media. I was excited at the possibility of being able to finally label myself as an “investor”.

I threw everything I had into it. “All In”, if it were a game of poker.

Life as an investor started well. The company continued to grow. As a new and over-eager investor I would check on the share price nearly daily, not really knowing what I was looking at. The numbers kept on rising, I kept on smiling.

My investing confidence continued to build. My belief that I was a share-picking genius continued to build even faster.

I began considering ways that I could find more money to invest, in an attempt to leverage my now proven share-picking skills.

Then one day, only a few months later, it all changed.

There was an announcement. The government was making changes to lending laws. Suddenly the somewhat relatively predatory interest rates that my company heavily relied upon charging customers in order to make their massive profits would be coming to an end. The cash cow had run out of milk.

My stomach sunk, almost as quickly as the company profits. As an over-eager investor I continued to check on the share price nearly daily. Still not really knowing what I was looking at. The numbers kept on falling.

At least now I knew why this change in price was occurring. The change in lending laws was an external factor which I had not considered when making my uneducated decision to purchase, it wasn’t covered under the “gut feel selection criteria”.

I continued to watch the price fall, and fall, until it was a mere shadow of the company it once was.

I lost nearly everything.

And it’s not just the money that I lost, but also my investing confidence and the desire to be playing the investing game.

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It wasn’t all bad though.

I was young.

In fact, I had arranged for my parents to make the purchase on my behalf, as I was not old enough to legally purchase them myself.

It was nearly everything I had earned through many hours working part-time. But it was only $300.

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For $300 I had received a valuable lesson. The lesson that I needed to perform significant research before purchasing. I learned what it was like to feel like an investing genius, only to then be completely humbled shortly after. I’ve been able to drawn upon those stomach-sinking memories when new investing opportunities have presented themselves, leading me to make wiser investing decisions.

That $300 I lost; it was a huge amount to me at the time, everything I had as a young part-time worker. But now, decades on, losing that $300 has had no real impact on my ability to be on track to meet my life investment goals.

What if I had waited until much later in life before first investing, when I was on a strong fulltime salary? That initial investment could have been several thousand dollars. I could have been playing with the whole balance of a retirement account.

Instead, the amount I lost was comparably tiny. I’ve had decades to recover. Over the long timeline of my life, it was a low risk investment, even if in the moment I had lost everything and felt financially ruined.

Start playing early, learn lessons, feel what it is like to lose, while the stakes are low.

And if it is too late for you to start early? Start now, but at least start small, as the lessons keep coming and they don’t give a damn about your age or how much you have to lose.

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