Years ago, when I was an office assistant for a summer job in college, my boss asked me to run a quick percentage calculation, and I couldn’t. As she stared at me, aghast that I couldn’t complete a fraction, I knew I was different. Math was always my most difficult subject in school, and numbers didn’t get any easier as I grew up – I’m still the one after a dinner out who needs a full thirty seconds to calculate the tip.
But, no matter – I easily ignored the one part of modern life that does require some numbers savvy: the financial world. It was only after I tackled finances on my own terms that I proved being numbers-phobic won’t keep me from being financially free. I actually have the inherent skills; all I needed was some help.
The financial world lives for the language of numbers and math. Naturally, I avoided those people and their products completely, including my own father, who is a financial type by nature and found learning investing as easy as learning to drive a car. Yeah, he had to learn the rules and how to operate, but soon it became second nature.
My dad’s favorite language is numbers – he’s a value investor and hedge-fund manager – so when he would talk to me about investing it was by describing equations that were way over my head and I simply could not follow what he was saying, which, looking back – OF COURSE it turned me away. I was acting completely logically, avoiding something complex and incomprehensible. Same thing when I looked into investing online or on the financial news – all anyone talked about are numbers I didn’t understand. Yelling about stocks seems to be the preferred mode of communication, which I wanted nothing to do with. It was a world that, though I was plenty smart and savvy in other areas, was completely inaccessible to me.
The problem with my plan to ignore it, though, is something I discovered only recently: inflation. Inflation is slowly destroying any money I save, dollar by dollar and day by day. Inflation is when the buying power of money erodes, and it does so at an average of 3% per year. That means that I need to get 3% on my money, every single year, JUST TO STAY EVEN. It’s awful. It seems all the financial types think we know about that, but I certainly did not. I mean, I knew about inflation existing, but no one had ever connected it to my savings. Ever. Not my dad, not any financial advisor, not a friend – no one.
Once I really understood what inflation is doing, and once I realized that each year I waited, I was losing out on great returns that could change my life NOW, not in some far-distant imaginary retirement future, I took action to get help.
First, I visualized, very clearly, what I wanted from putting time into learning the math of investing – what does financial freedom really look like? My time was extremely limited and I needed to know taking time from other important things would be worth it. For me, financial freedom looks like being free from depending on my salary, so I could work less and be happier. I wanted that, and soon.
Second, I asked my investor dad to prepare me in real-life words; words I could understand, which he did on our podcast, “InvestED”. “Go to the feet of the master,” he said, “Warren Buffett.” Buffett has written an annual letter to his Berkshire Hathaway shareholders for more than forty years, and his ability to explain financial numbers to us Normals is unparalleled. I read a few letters a day until I had devoured them all. Most of it was over my head, but I started to become familiar with the language he used, and as a beginner, that was all I needed.
Finally, and actually the easiest step, I started reading the investing and business sections of a major newspaper every morning. As I practiced, day after day, the players, the companies, and the landscape all became more familiar, and instead of continuing to avoid everything math-related, I found myself actually wanting to know how to use numbers to evaluate what I was reading – which was rather an exciting turnaround.
I’d get to equations and valuations down the line in my Investing Practice, but first, I had had to begin learning the language. None of us were born knowing how to navigate an incredibly complex global financial market – and they don’t teach it in school. Of course, we don’t know! We just need some education and a guide who knows the language.