The first mistake to avoid

Having looked at the differences between assets and liabilities, I now want to focus on the former, or rather, on investments, particularly financial ones. It must be said that there is a lot of distrust surrounding the stock exchange and investments. Partly fed, as I have already written, by newspapers and TV that report only particularly negative news.

Savers are thus inclined to perceive financial markets as dangerous, thereby influencing them into keeping their savings in their current account and seeing their purchasing power eroded by inflation every year. This means that their wealth does not increase and their situation does not change.

Many of you will have a family member, friend or acquaintance who has bought stocks and lost part of their capital. This may have led you to compare the stock market to gambling, considering it unethical. The reality, however, is very different from what you think.

This is why it is very important to have a proper financial education. It should be a taught subject, just like literature and mathematics, right from primary school. It is crucial that children be taught to understand the meaning of saving and investing.

But before I explain how you can make your savings pay off, I want to talk to you about a mistake that this very lack of knowledge could lead you to make. Trusting advice given to you by the wrong people.

"The gold in a man's purse must be guarded with great care, or it will be lost."

Advice, as a former colleague of mine once said, has two qualities: it is useful and it is free. This all depends on the person giving the advice, though.

The young Arkad invested his first savings by giving the gold to Azmur, the brick-maker, so that on his next journey he might purchase, on his own account, rare jewels from the Phoenicians. Thus, when he returned to Babylon, they would sell them by dividing the profit.

Unfortunately for Arkad, the investment went bad. The Phoenicians sold Azmur worthless pieces of glass that had the appearance of gems, and his gold was lost. "Every fool must learn, why trust the knowledge of a brickmaker's jewels? Would you perhaps go to the baker and ask for stars? No, if you had the ability to think you would go to the astrologer."

These days, there are many brick makers posing as financial experts.

A phrase I found on an Italian website and turned into my motto (a soft way of saying I "stole" it) goes like this,

"no one outside of you is worthy of handling your money because only you know the effort you put in to get it."

In a few words, this is the essence of investing. You alone know how much effort it cost you to earn your salary every month. You alone know the sacrifice of saving 10% of that salary. The worst choice you can make is to trust people who only care about their own gains.

You must decide for yourselves how to invest your money. "Of course," you will say, "I don't understand anything about investments, I would end up losing my savings anyway". That's why it's important to have a proper financial education. This does not mean being an economist who graduated with top marks from some prestigious university. It means knowing the financial markets (don't worry, they don't bite nor do they don't transmit any nasty viruses). What is important is knowing what instruments to use and being aware of what you are doing.

I created this journey to give you a basic financial education, to give you the stimulus to put into practice some aspects and have the desire to deepen others. What you have read and what you will read is not a commercial technique to sell you some courses or financial services for a fee. I don't have any to sell and I'm not interested in doing so. I wouldn't recommend anything that would put your savings at risk.

My goal and desire is to make people become more aware of their finances and above all, more responsible in the management of the money that they have earned over time. Deciding to delegate these responsibilities to others (banks) is very expensive and not always, as you will see later, particularly fruitful, as often their results are not much better than what you could do independently with simple tools. You will learn to use said tools if you continue this educational journey.

So, forget about the many gurus hanging around on the internet and for once, bet on yourself.