Saving & Investing

Why Didn’t They Teach Me This In School?

Written by Richard Thwaite

Make your money work for you

In my first post I talked about mistakes that I made on my financial journey. Here I want to share with you one of those mistakes.

In those early days, I had no money left at the end of the week as it all went on fuel for my car and tuning aids to make it go faster, in reality, it was probably slower but made a lot of noise which made me think it was faster.

It wasn’t long before I realized that what I was doing was a complete waste of time and money and was annoying everyone in peaceful Wensleydale. I sold the car and cycled the 10 miles to work and back each day which resulted in me having money left at the end of the week – quite a revelation! This was back in 1983 when we received pay packets each week. I’d never had a bank account so my spare money sat in a small box next to my bed.

I had what I thought was an ambitious goal of retiring at 50. The reason that I thought it was ambitious was because I told a group of elderly colleagues in the works canteen of my plan and they all laughed at me and told me it was an impossible dream. At first this disheartened me but I thought about it and decided to show them that I could do it. I knew my goal but had no idea of how to get there other than saving as much money as I could every week and so that is what I did.

Soon my little savings box was full and I had to upgrade to a bigger one. I worked hard and did all the overtime I could and continued to cycle to work. The contents of the box continued to grow and I was delighted that I was increasing my savings each week.

My first pension

After 6 months in my job, I was entitled to join the pension scheme which I did. I don’t recall the amount I paid but know it was a small sum. As part of the pension literature that I received, was an article on making your money work for you. It was a brief article but I thought I would find out more. Now bear in mind this is 1984, there were no personal computers and certainly no internet so I went to the local library in my home village. The only reference I could find to making your money work for you was investing in the stock markets and that book had a disclaimer plastered over one of the first few pages stating that you could lose all your money. That, unfortunately, is as far as I got with that book.

My first savings account

No one I knew saved any money or certainly they weren’t willing to talk to me about it so I decided to go to our local bank where I again was told stock market was for the big boys and no place for me. I left the bank with a new current account and a high-interest savings account. I can clearly remember that the savings account was paying 3.95%. This was it, I was on my way, however, when I look back at inflation in those days it was running at 4.58% so in reality my high-interest savings account was, in fact, losing me money each year due to inflation. Although losing much less than when I had it in my savings box.

Those early encounters with saving and the paltry research I did convinced me that the stock markets were a no-go area. For many years I simply saved into my Banks “High Interest” Savings Account before moving onto the dizzy heights of Building Societies.

My first experience of the stock market

It was not until a few years later in 1987 that I had my first taste of the stock market. I had read an advert in the back of Exchange & Mart for making money out of penny stocks. All you had to do was send an S.A.E. (stamped addressed envelope) and they would tell you what to do. I eagerly awaited the arrival of the information and when it did arrive I was quickly reading it to see what had to be done. The first thing I read was the dreaded “you can lose all your money” and back came my old demons telling me this was a bad thing. Anyway, I read through the first few steps which explained how you bought the shares then on to step 5 which asked for a cheque to unlock the next steps. That was as far as I went with penny stocks but it did strike a chord with me as it showed how easy it was to get started with buying shares.

Black Monday!

What it told me was to simply go to my bank and they would buy them for me. So off I went to see what they could do for me. I was initially met with a lot of negativity but was determined to give this a go. The outcome was that two weeks later I bought my first shares. Such was the negativity surrounding shares, especially from the bank, that I only purchased $500 worth. I probably spent more than that buying the financial times to keep abreast of my new found investment vehicle. Unfortunately soon after my purchase Black Monday struck and wiped 10% off the FTSE in one day, immediately followed by a further 10% the day after. Everything I had been warned about had come true almost instantly and curtailed any further involvement with the stock market until the mid-90s.

I kept saving into my High-Interest Savings Account. It was slow but steady progress and I was confident there would be no shocks like I had experienced with Black Monday.

Educate yourself

What I was lacking is what the vast majority of the people are lacking and that is financial education. I saved for years into accounts that were actually losing me money due to inflation. When I realized this I found ways to at least keep ahead of inflation (only just). It was a while before I plucked up the courage to venture back into the stock market, this time via funds.

We are so fortunate having resources like the internet now. You can find an answer to anything in seconds and learn from blogs, books, and other financial sites. The only problem now is filtering out the BS and get rich quick schemes.

Saving money is important but what is vital is that you make that money work for you. There are countless things we have all done in life that we look back on and with hindsight would have done differently. Mine is definitely to have made my money work harder from a much earlier time in my life, with the stock market featuring heavily in those plans.

My journey to where I am today took a few twists and turns, mistakes were made and lessons learnt but the most important thing I did, was to start my journey. As a wise person once said, a journey of a thousand miles begins with one step. My advice would be to take that step as soon as possible. When you do, don’t make the same mistake as me, make your money work for you.

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Had we been taught this one trick at school it could have changed our financial futures.

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4 Comments

  • Hi Richard,

    I can really associate with your statement:
    “What I was lacking is what the vast majority of the people are lacking and that is financial education. ”

    There have been so many times that I’ve wished that I’d received a better financial education at school or even at University. I actually find it incredible that so little attention and thought is given to educating our youth in how to be financially savvy and the route to wealth.

    Thanks for another great article, I’m certainly trying to play catch-up and get my money working for me now (making up for lost time)!

    OR

    • Hello OR

      I find it quite staggering the lack of financial education there has been in our schools. I do believe this is being addressed and is, or will soon be part of the curriculum.

      I am quite sure you will do very well for your self. After meeting you at the recent FIRE Escape it was very evident that you are very driven and passionate about making changes.

      Good luck on your journey.

      Richard

      • Hi Richard, I’ve just come across your blog and am working my way through it. Like you, I have recently reached 50 and have had the lightbulb moment where I realise I have financial independence. It’s taken 15 to 20 years but I’m there and it’s been a revelation. I totally agree with OR’s comments. I don’t know why they don’t teach this stuff in schools. I reckon the world would be full of much happier people if they only knew how to invest cleverly for the future. then again, there are also plenty out there who wouldn’t listen. I recently started my blog with the exact goal in mind. To help spread the word. Please feel free to check it out. In the meantime, I’m signing up for your future articles. Cheers, Martin – Get FIRE’d asap

        • Hello Martin

          It is great to hear you have reached FIRE.

          From my experience I believe there are far too many people who won’t listen which is a real shame. As you know it only takes 3 things, save a little, make it work for you and probably the most important time.

          I have had a quick look at your blog and it looks great. I have also signed up for your updates.

          Thanks and good luck

          Richard