“How much time will it take to learn to trade and invest?”
This question came from Danny, a good friend of mine in Australia while we catching up over coffee.
He was looking for a way out of corporate life, and was thinking about investing and trading in the stock market as a possibility.
I asked myself this question many years ago when I first began investing.
Time Flies When You’re Determined
For those who know my story, I started my journey enamored with Warren Buffett and his long-term approach to investing.
The time required to learn the craft was funnily enough not even part of my thought process because I just began reading every book I could find on him.
That itself took about 6 months but I was just so happy doing it so I did not even measure myself in terms of time – it was a passion of mine to learn all I could as I was determined to become financially free at a young age.
Innvesting & Trading Has No Age To Entry Barrier
See, the great thing about trading and investing (unlike sports or many other professions like dentistry, doctor, lawyer etc.), is that investing and trading has no age to entry barrier.
I’ve met 15-year-olds who with the help of their parents have already built a small portfolio from their pocket money, as well at 80 plus-year-olds who are determined to finally look after their own financial destiny.
Both have their advantages:
- When you’re younger, you have more room to make mistakes and have much more time to reap the rewards of compounding
- With age actually comes wisdom due to life experiences (provided you take each good or bad experience as a learning curve and not something to fear for the rest of your life). You tend to have more access to capital and learn to invest better because you are more protective of your hard-earned capital.
The truth is, regardless of whether you’re young or old when you start, you do get better with age.
One classic example is none other than Warren Buffett himself who seems to be getting better by the year building his Berkshire Hathaway.
One thing his life long friend and business partner Charlie Munger famously quoted saying was that ‘Warren is only getting started’ several years ago. Therefore, can you imagine if Warren continued living well past 100 and still running Berkshire?
For me personally, I think the main thing that made all the difference though was that I began to action on what I learned by physically investing into the markets with my savings as I was learning.
That speeded up the learning curve as I had a big enough ‘Why’ and thus I knew I had to learn fast so I did not make silly mistakes I could have prevented by learning all I could.
So how long does it really take to become a proficient investor and trader?
The simple answer is, it depends.
I would rather be direct and tell you like it is than say you can just attend a weekend seminar and begin trading on Monday like a pro. It doesn’t happen like any other profession, and trading and investing is no different. It does take time.
However, I think the following questions you ask yourself can help;
- What is it you want to achieve from investing and trading?
- What level of experience do you already have in the markets?
- Have you physically invested in the markets before?
- Is investing and trading a passion of yours to learn everything you can or is it more of a means to an end?
There are of course many other factors involved but I believe these are the main that will determine how much time you will need in the markets.
For me, it took about 12 months on the investing side, then a further 12 months on the trading side just to get started.
I did have a disadvantage when I started though. The internet was only in its infancy and there were very limited resources such as articles, books, courses I could get access to online so I did it the old school way. Off I went to the the book stores and fumbled my way through. Amazon itself was only just established and I didn’t even know what it was (god I sound ridiculously old).
Times of course have changed and the vast amount of resources online these days already makes things so much easier. However, that could also be a hindrance as you can easily get overwhelmed with too much information and never actually start since more questions than answers could occur.
Another thing, which could help speed up your process of learning, is to find someone you could learn from.
Even Warren himself happily admits that his mentor was Benjamin Graham, the father of value investing and he is what he is today because of the mentors he had in life.
Therefore, you really do not have to reinvent the wheel as all giants today once stood on the shoulders of others.
Personally, I myself learned from the generosity of countless others such as Buffett and you can do the same too.
Learning from others does make things much easier but I want to emphasize that not everything you learn will immediately or permanently gel with you.
Your personality will determine what type of investor and trader you will become. That itself will take time.
This should not stop you from reading and learning from varied sources because it is through this learning and doing that you ‘find your path’ for which without the doing, can never be found.
My own experience taught me this.
I began with Warren Buffett and value investing but realized I also enjoyed active trading so I took up many and varied trading courses such as trend following, swing trading, macroeconomic trading, and even day trading in a vast array of securities such as stocks, options, forex, and futures.
Eventually, I settled down and found my love of value investing and positions trading in stocks and options. I naturally enjoyed this and found my edge in these markets and decided to let go of everything else like day trading, forex and futures.
It was this realization and willing to let go of everything else that my financial success from investing and trading took off.
So the path to investing and trading success is not about adding more and more but to find your ‘mojo’ in an narrow area you like and enjoy most and letting go of everything else.
This not only leads to sanity but a much happier and simpler process of achieving your financial freedom.
Give yourself the gift of 6-12 months at the minimum as opposed to (a weekend seminar) thinking you are ready.
Learn from a varied source and do not discount anything until learned and tried.
Begin investing first before trading, as trading really is investing but just on a much shorter time frame and with far more frequency.
Begin investing real capital on a small scale once you believe you have the basic understanding and knowledge as nothing will ever beat having real money on the line.
Decide on your area of love in the markets and be willing to let go of everything else.
Take on board one thing at a time. ie investing in stocks first as opposed to trading in stocks, forex, options, future all at once. Master one and then move onto the next. What is the rush?
Truth is, you never really stop learning even after you have done it for a while.
I have been on this journey for almost two decades and I am still finding things to improve on. Investing and trading is a never-ending process so it is best to focus on enjoying the journey and process and let the results look after itself because it will. Focusing on profits from day one not only places alot of unnecessary stress on yourself but can actually jeopardize your long term financial success.
It has for me and I am certain it will for you.
I have been through the journey as well as become great friends with many others who have also been through the same journey so I can share this from first hand experience.
The Difference? We were patient and did not give up when the going got tough, ploughing along like farmers until our crops was finally ready to harvest.
“Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.”
– Antoine de Saint-Exupe