Should Young People Learn About Investing? Musings of a Novice

First, a disclaimer: I’m currently a growing greenhorn in investing. That said, maybe even a greenhorn can share some thoughts on finance and investing.

In 2007, I had been in the workforce for 2 years. For a while, two programmer friends I was close with were talking about the funds they bought. I listened. After a while, they seemed to reach a consensus: funds carry high risks, and if you’re not careful, you can lose a lot. I listened, and internalized one idea: don’t touch funds.

From there, I adopted a cautious attitude toward all financial products. I never engaged in any financial operations—not even simple fixed deposits. On one hand, I thought my salary wasn’t substantial enough to warrant financial management (the returns on fixed deposits are pitifully low). On the other hand, I felt that “buying funds, trading stocks” was not only risky but a “distraction from the main job,” something to steer clear of. I preferred to focus my time and energy on design and work.

Looking back, I can’t say my past thoughts and actions were absolutely right or wrong. But if I could go back to 2007 with today’s knowledge, I would approach financial management differently.

First, as a young person just starting out in the workforce with nothing to my name, dedicating time and effort to improving professional and work skills is undoubtedly the right strategy. For example, in 2005, my first job paid 3,500 a month (in Changsha), and by 2015 (in Shanghai), it had increased more than tenfold. Impressive? Not really. It’s pretty middle-tier in the industry. But I want to highlight that young professionals start with low pay, but there’s vast potential for future growth. For most people, as long as you explore and define your career path and work diligently, the first 10 years in your career can yield a very high return on investment.

What about the next 10 years, or even longer? That’s what I want to talk about next.

Realistically, salary increases cap out pretty easily for most people. Take designers as an example: in top-tier cities, after reaching a salary of 40,000 per month (not counting stock/options), the annual salary increase is minimal. Besides, not many designers even reach 40,000. So what then? This topic is vast, and I’m still pondering it. But based on what I’ve learned in the past year, if I could send a message back to my 2007 self, it would be: learn and practice financial management. This could be a new path that opens up after a decade of work, leading to unexpected breakthroughs.

Starting in 2007, I made two mistakes regarding financial management: one, I only heard friends talk about it and, without understanding or practicing, came to a conclusion by feeling: don’t touch funds; two, I thought my salary wasn’t enough to require financial management.

Over a decade later, my views on investing and financial management have been gradually influenced by some trustworthy friends around me.

Many aspects of life need managing: time, health, education, career, relationships, finances…These should be in dynamic balance. Meaning, you can emphasize one at a certain phase, but you cannot completely ignore any of them. Financial management, naturally, should not be ignored, whether you’re young and single or with a family. Whether you have a million in assets or just earn a few thousand each month.

When it comes to investing and finance, I’m a beginner. Currently, I’m learning about value investing. The book I’m reading is “文明/现代化/价值投资与中国”.

Though I’m a designer, I find joy in learning value investing, and I’m motivated and willing to pursue it—this is indeed fortunate. Just starting this journey, with a long road ahead.

More later.

For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs. — 1 Timothy 6:10