I discuss the money habits we develop from our families based on the June chapter of Danielle Town’s and Phil Town’s Invested Book (2018). No matter what the money stories are that we grow up with, we can choose to have financial freedom for ourselves!
If you’re interested in learning how to take control of your finances and start becoming an investor like Warren Buffett, check out my free PDF guide.
Our family traditions with money significantly affect our financial decisions in life. Danielle Town shared a lot about her life as she recalls the beginning of her investing journey in this chapter.
Investing is such a mental game and until we address the demons that are holding us back, we might be handicapping our ability to believe in ourselves as investor.
Danielle shared her awakening as an investor when she discovered companies she might want to invest in when she lived in Boulder, Colorado. She used to associate the financial world with uncertainty and complexity in a negative way, but the way her father taught her how to invest could not be any more different from what might typically happen on Wall Street.
She adopted an investing practice from her successful investor father, Phil Town, in a way that began to free her and affirmed that she, too, could be an investor. Danielle felt like her lawyer career didn’t lead her to feeling financially free, and she had been trapped on a hamster wheel.
I definitely relate to Danielle’s pre-teen experiences with her family. We all need to work through any preconceptions we have in order to become the investors we imagine ourselves to be.
I’m forever grateful that Danielle and Phil Town have included everyone in the community of investors they foster through their podcast and books so we can become investors like legends Warren Buffett and Charlie Munger.
Since we don’t have all the time in the world, we should strategically focus on the industries and well established companies that we like, know something about, and that we’re willing to go deeper in learning about.
Another way to frame the idea of circle of competence, when we think we know, we might not really know enough. The secret of Buffett and Munger’s success is admitting to what they know and don’t know. Humility is key here.
Reading annual reports (10-Ks) can be boring, but we should just force ourselves to get on with it if we want to become better investors. Toss some of them into Too Hard or Too Boring piles if we need to.
To formulate an investing wish list, we should create short stories about companies we love and keep track of them in a table or a document we will keep updated.
Danielle recounts talking with a friend about how opening a brokerage account and buying a security are not common sense, and people can do paper investing or paper trading to practice without real money on the line.
Toward the end of the chapter, Danielle wrote about how her father had been a Grand Canyon river guide, and when he became a father he put preconceptions about wealth aside to make real money for his growing family.
When Phil became wealthy, he realized he didn’t suddenly become a bad person, he maintained his sense of integrity. It’s an admirable rags to riches story!
I share a little about my family money story too! 🙂 It was instilled in me to save in case of a rainy day.
As difficult as adulting can be, especially for us “entitled millennials,” we just gotta do the best we can and live below our means until we have achieved our goals.
Danielle summarizes her decision to move forward with how she felt about money and wealth by 1) facing her fears, 2) being thankful, and 3) transforming herself to have an abundance mindset.
I look forward to making more investor friends! Add me on Instagram: michellemarki! 🙂