In this video, I review the beginning parts and first chapter of the Invested Book (2018) by Danielle Town and her father, Phil Town and share my experiences and thoughts. I discovered these authors’ podcast, Invested, in 2017 and I was super grateful that they dedicated a whole book to their insights and approaches as discussed in their podcast.
Is investing as risky as skydiving, bungy jumping, and snowboarding? Typically, I’m not afraid of much of anything, but I’m afraid of losing my money and I fear making investing mistakes even more than adrenaline-pumping daredevil activities.
Since it’s still January 2021, I discuss how I have integrated the book’s chapter 1 (January: Becoming Brave) lessons into my investing practice. Danielle encourages us to approach investing just like we would any other practice, like when we practice yoga or exercise.
Many of us desire financial freedom for many similar reasons: we want to have options in life and we want to be able to help family, friends, and causes we care about. It can be overwhelming trying to figure out how to best invest our money because there are many paths, and this one (Buffett/Munger style) tends to be among the roads less traveled.
Back in 2017 I was questioning whether I was investing in a way that I truly believed in, and back then I didn’t feel like I was on the path towards financial freedom. I started listening to a bunch of different podcasts, including the Invested podcast which I found totally resonated with my values and how I envisioned myself investing. When I learned about the Buffett/Munger style of investing from Phil and Danielle Town, I totally took to this way of investing (some call it value investing but this approach goes deeper than that blanket term). I encourage everyone to try out different ways of investing to see what really makes sense for you.
While Warren Buffett and Charlie Munger have never entirely given away their investing secret sauce recipe, this book provides stories and valuation methods that Danielle and Phil modeled after their interpretation of how Buffett & Munger evaluate companies in which to potentially invest.
I loved the concept about how when we invest, we are voting with our money and voting with our values. I like the idea of voting with my money in companies whose mission and values I can believe in, and my investment in a company shows I want them to exist and thrive financially into the future. The concept of Margin of Safety (MOS) is buying a company at a discount to its intrinsic business value.
I relate to Danielle in how she did all the right things: got educated and got a good career, but then she struggled to have a work-life balance and she didn’t want to be a wage slave for all of her life. She initially had fears about embracing investing but gradually overcame it in learning from her father because there wasn’t a better alternative.
To Danielle, just hoarding (saving) money in a bank account or abdicating one’s decision making to the financial industrial complex were not satisfactory options in order to reach financial freedom. Inflation that is outpacing our low interest rate environment will lead to lower returns in one’s savings bank (compared with investing), which might not allow for a secure retirement fund. Just buying and holding diversified index funds might not be enough, either, to reach FIRE.
The concept of dharma, doing what one is meant to do, is pretty neat. I believe I was meant to become an investor, and I think many of can also become investors as long as we do our homework, study companies properly, and try to invest wisely.
Let’s grab the Wall Street bull by horns and figure this out for ourselves! Of course, we could lose money investing, but by embracing this investing mindset and taking a few steps forward, we can start overcoming any fears we have. We can go from being financially illiterate to being an educated investor, just like Danielle is now.
Let’s ask ourselves the question: if we had financial freedom, what would we do? Then write it down and use it as a guiding light in this journey.
All of us are on our own hero’s journey towards FIRE (Financial Independence, Retire Early) and this journey is one filled with much gratitude and enlightenment, and I look forward to making more investor friends.
Let’s connect on instagram: michellemarki! 🙂