I was mostly self-taught. My grandfather (who developed Snowy Bleach, Glass Wax and Mr Bubble) taught me that growing your money meant spending less than you bring home. My step-father (who grew up desperately poor in West Virginia) taught me by example that chasing speculative investments, getting into tax scams, etc. was an excellent way to lose money. I think he had his paychecks garnished a three or four times during my school years. My father-in-law gave me a good example when we bought our first house - he went with us to the savings & loan office and told the loan officer that we were a good risk but he sure as heck wasn't going to co-sign for us. He said "Give them a loan and let them learn to be responsible for themselves" and the loan officer did just as he suggested - I think home loans were about 9% then, with 20% down.
I taught myself about losing money by investing in several companies whose products I liked, without knowing anything about the business behind the products. I even encouraged friends to invest, and watched them lose all their money too. It was money we could afford to lose, but it was still lost. Then I saw some older friends lose their shirts on land speculation. After I watched the sheriff's marshals come in and change the locks and throw my employer out of the building when he defaulted on a loan, I learned to think hard about losing.
Many years later, as a consultant, I decided to take only direct (cash) payment from my clients - no stock options, no commissions - nothing but honest dollars paid for honest time spent. Maybe I missed the big one ... but I was able to pay down my mortgage, live well, and owe nothing.
I watched another employer put her paychecks into the desk drawer, week after week, when she didn't have enough in the checking account to make payroll AND pay herself. Later when times were good, she could cash them (aerospace industry). That discipline made a big impact on me - just at the right time - in my senior year of college.
I started an IRA when in my early 20's. Because our expenses were low we were able to contribute regularly into IRA and later 401(k)s. I learned the hard way about front-load funds and back-load funds, thanks to a broker who took advantage of my lack of knowledge and put me into highly-loaded American Funds. While the load period was running down, I read all I could about investing. As I was living in England for a year, I started taking the Financial Times (which I still read daily) and I found Bogle's A Random Walk Down Wall Street. It made sense to me. I took all my money from that broker and moved it to Vanguard 20+ years ago.
One of my early mentors in the working world was a prof at Wharton Business School. He said "invest, don't withdraw". Until this year when I retired, I never withdrew anything from Vanguard. My advisor there laughed when I asked him how to take money out. That's my main secret - put in, don't take out.
Last edited by citromike
on Wed Feb 13, 2013 6:31 pm, edited 3 times in total.