Experience Is The Best Teacher…?

Have you ever heard of the saying?

"Experience is the best teacher."

When it comes to investing and building your wealth - I feel that there are two parts to this statement.

"Experience is the best teacher, yet it is also the most expensive one."

Wise Men Learn From Other People's Success

Many times, people like to do this thing called, "I will figure it out on my own."

That's like saying, "Let me waste my time, learn from my mistake, and try some more, learn some more, and achieve my desired outcome in 10 years."

Figuring it out ourselves (i.e. gaining experience) is the most silly thing anyone can do.

The wiser thing to do, is to look for someone who has already spent those several years making those mistakes, and vow never to repeat those same mistakes.

You may wonder - who would openly share their mistakes and learning lessons?

Well, books, training materials, courses - you name it.

These are great educational materials, which are the most cost-effective way to learn from someone's else, and emulate their success.

There are many times where I noticed that there are people using options for the past 5 years, yet they have lost thousands of dollars. Put it shortly, they are just wandering ghosts - trying to figure things out on their own. A really expensive journey.

Don't Buy Another Property - I Disallow It.

I learn this lesson from a property consultation with a successful property investor, who hit his first million in his 20s.

When I had my first property consultation with him, I had already bought my first property. And as the conversation went on, he realised something - I was the kind of person who is a fast action taker, and learn from my mistakes, and continued to press on. He also realised that I did not have a strong foundation a property investment yet.

"I forbid you to buy another property - until you really educate yourself - go and attend XXX property course."

Why?

He did not want me to make an expensive property investment journey.

This is why education is so important. And the fastest way to educate ourselves, is not to learn from our mistakes, but to learn from other people's successes.

Figuring Out Yourself Is Okay If...

In terms of tactical details like opening a brokerage account, funding your account, looking at financial ratios...sure, I think these are easy things to figure it out on our own.

However, in terms of strategy - the five layers portfolio protection, when to use a sell put, when to use a buy call, how to structure your portfolio, what to do if the stock market is down - when to leverage...I think these are important elements that are expensive to figure things out on your own. In the long run, these are what will make your portfolio profitable.

The Bottom Line

The number of years of experience in investing matters little, if most of those years were just filled with mistakes, trying to figure things out.

Imagine if someone tells you that he has 15 years of experience, but he only figured it out and started becoming profitable at the 12th year...Do you really want to be that person?

You might be better off just learning from his successes from the 12th years onwards, rather than going through the painful journey of figuring things out.