Tuesday, March 4, 2014

Let's Go!

I am in my mid-twenties and I currently live and work in London. I grew up in a middle class household, and while I never lacked anything, for the majority of my life I always got this notion from everyone that a very easy route to happiness is being rich, and let's face it, if you just think about it quickly, it definitely doesn't look untrue! Actually the first thing that comes to mind to the majority of people is: "That would be Great! I would be able to leave the daily grind that is work life, and finally dedicate myself to my interests/family/traveling".

I have just started working roughly a year ago, and let me tell you, I work in IT and I genuinely love my job, I am also handsomely rewarded for it (for someone my age), but, despite all of this, I found myself having the exact same thoughts that everyone seems to have about being rich: "It would be really great to have enough money so that I could stop stressing if I am taking the right career steps" or "I wish I didn't have to go to work tomorrow so early in the morning so I could go to the gym without having to wake up so ridiculously early", or even "I wish I didn't have to commute today in a tube so overcrowded that my face will be resting in some unsanitary random person's armpit".

However, I realized something.. Looking at those "wishes" I realized that I didn't want to be rich. Instead, I realized that I wanted to have control over my life, specifically control on how I choose to spend my time. I know that it sounds obvious, but because being rich is such a romanticized way of having control of your life, I believe we end up getting it imprinted in our collective conscious as the solution to our problems.

The reason why this realization was important for me, was because it helped me realize why I didn't feel that I was going in the right direction even if my career was progressing well and fast. I used to think that with dedication and time, I would move to executive job roles and thus I could earn enough to be "rich". However, picturing myself in such a position and imagining the money in my account wasn't bringing any joy or sense of achievement. In fact I just felt like I was grinding for nothing, because in the end I would just have more responsibility meaning that even though I would be rich, I would still not be in control of my life. Of course I could just try to reach such a position and leave after 1 year to "cash-out", but that would require many years of relentless dedication and some luck, and I particularly don't like to rely on luck. I understand that luck is necessary in all our endeavours, but in my opinion, the less you have to rely on luck to be successful the better.

Having finally figured out what I wanted, the obvious answer for this was investing my money. I live quite frugally and am pretty happy like this. In a way, it's just the way I am., luckily the things I like the most are either free or very cheap, so despite how incredibly expensive London is, I have a small chunk of disposable income that I intended to invest every year.

I went on looking for investment techniques and approaches. For a long time I thought that the stock market was akin to betting on race horses. Yes, I was aware that stocks represented ownership in a company, but in my head people that actually owned companies took a chunk of the profits as income representing their business gain. When you owned a stock, you barely had any decision power, you didn't get any money, apart from some random occurring "dividends" which were very very low amounts and you depended on other people's perceived value of the company to make money.

As I learned in more detail how stocks and dividends work I immediately got fascinated by dividend investment, I realized that they truly make you an owner in the company, and, not only are dividends not that low, they are regular, fairly predictable for mature companies, and have a tendency to increase at a rate that beats inflation! It just resonated with me instantly, it was in fact a simple model: You buy ownership in a company and you have a proportional right to a % of it's profits, the stock market is literally just "a market" where ownership in companies is sold. Like a market that sells anything, your job is to look at the products and prices and think "Am I willing to pay this amount for what I will get in return?", in fact if you were at a market and were surrounded by people screaming: "Buy, It's cheap! A once in a lifetime opportunity!" or "Don't buy that one, buy this one instead!". Should you really let the screaming completely drive your decisions? That's what I see the stock market price fluctuations as: noise.

Now that I had understood what possibilities I had even on a fairly modest middle class salary, I decided to take define my goals and go for it! By gradually increasing my ownership is several companies and gaining increasing chunks of their profits, I expect to reach a point where I can have a predictable income stream to ensure that if at some point in my life I decide so, I can survive without having to sell my time to someone else for as long as I want.

So, for the sake of fighting survivorship bias and because it is a good opportunity to invite feedback that I can learn from, I will share my journey as I go along. Thank you for reading all of this and I encourage you to take this journey with me and to share your opinions and thoughts.

Let's go!


  1. It's really good to see someone start investing so young, I will definitely enjoy following your progress and see where you end up in 20 years time :)

  2. Hey Anonymous,

    I'm really glad you enjoyed the blog. While I am just starting, but even though my contributions are small, I have compounding on my side. I'm hoping that in some time, I will have a bigger and more interesting portfolio, stay tuned!

    Best Regards,

  3. I wish I had started when I got my first real job, but luckily it wasn't too long into my career before the light bulb turned on. I think DGI is a great way for the "average Joe" investor to build up the core of their portfolio. It's so simple to understand once you grasp the concept to focus on the cash flow instead of the share price. Looking forward to following along.

    1. Passive IncomePursuit,

      Glad that you liked and happy to have you on-board!

      Very true, looking at cash flow, business position and dividend history makes it a much more intuitive process that definitely makes more sense to the average joe than complex technical analysis of the share price.

      Seeing so many people constantly reinforcing that they would wish they would have started earlier really tipped the edge for me to start as early as possible. Initially I thought my ability to invest capital is very low and so I would probably move at a very slow pace, but when you take into account the dividend growth rate of some of the biggest players, you definately see that the earlier you own the stocks, the better, 2 or 3 years make a massive difference with a dividend growth rate of 10%.

      I added you to my blog roll and will definitely be looking forward to track your progress as well!

      Best Regards

  4. Congratulations on starting your new journey! You are quite fortunate to be so young in your career that with career growth and investment compounding on your side, you should be in great shape as you move forward!

    1. Hi writing2reality,

      Thank you!

      I have tried to make my assumptions of my progression assuming no career growth at all and it already looks pretty good. I am hoping that when you factor those in, the growth will be much much higher. I'm quite hopeful, let's see!

      Nice website you have, I particularly like that you mention real estate and p2p lending, very interesting investment vehicles as well. I intend to diversify to those as I have more capital available