Ask Colin

How much time will it take me to learn investing?

This was a follow-up question on the earlier question How much time each week do you spend  on your investing? An edited version of the follow-up question:

With complete respect to you, you are obviously highly passionate about what you do which is inspiring, but the amount of time you put into your investing is by far way too much for me.  I am 34 years old, I am moving back to Australia after 12 years, and as such will likely go back into the workforce to get a good start and meet people.  At some point I will likely be looking into a business, maybe for my wife to run, property in Australia and possibly a family.  I will be currency trading about 1 - 2 hours per day and a few hours over the weekend reviewing markets, past trades etc etc.  I am looking for an investing path to go down to begin learning and not risking a lot of money as I understand I have a lot to learn.  I am looking for now at least an avenue where I could do an hour or two per day, similar to my currency trading, with a couple on the weekend as well.  Is this possible? Do you believe that if I read your book, or subscribe to your website, that I can take part and learn on this amount of time per day? I know that once I get into it, and likely get as passionate about it as I am about my currency trading, that I will most certainly find more time.

 

You asked me how much time I spend in investing, but you seem to be interpreting the answer to my question to be an answer a different question, which is how much time do I think you need to spend on investing. I only addressed the question you asked, not the question you did not ask, but which seems to be what you really want to know. I don’t know if you are an opera fan, but if you are familiar with Wagner’s opera Siegfried, Mime is given the chance to ask Wotan three things that he desperately needs to know. Instead Mime asks three irrelevant questions. He never gets to learn what he really badly needs to know and fails in his quest to forge Nothung, the magical sword. There  is an important lesson here.

 

My experience is that it takes at least ten years of hard work to become a good investor. It may take less if you already have a tertiary qualification in the field or have worked in the field professionally. However, if you start from scratch your education will take about 5 years of full-time study and at least another five years to gain practical experience. This is fairly much the time to reach independent competence in any similar profession to investing.

 

It took me far longer than this – maybe 20 years, but I did my study gradually while working full-time in sales and marketing. Later, I took two years out to do a post graduate course full-time (which I later taught). My experience also took longer, because of time constraints, but also the time to build up savings so I had the capital to work with. My timeline is probably typical for most people because they need to be working so they earn a living and accumulate capital for saving.

 

Of course, it all depends on how good an investor you want to be. Most people are seemingly content to be very ordinary, relatively unskilled investors, so they do not learn the profession. They remain very much amateurs and, as far as I can see, they do not do particularly well. In particular they get badly hurt in bear markets, because they do not understand risk and they panic, selling at the worst time and not buying back in when stocks are very cheap at the bottom.

 

I don’t want to discourage you, but I also need to be honest with you. It really  is up to you. There is a spectrum from beginner to professional. You start at the bottom and begin to learn a new profession. You can choose to be as good as you want in terms of commitment and effort. It is up to you how far you go along the path.

 

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