Methods by Which You Learn Investments
Develop critical and systemic thinking and the skill of working with information
Critical thinking is the ability to question any incoming information. It is also an understanding that any information not confirmed by facts is just shaking the air. It can verify data in original or reliable sources or with one’s hand. It is a skill that helps get closer to the truth in case of conflicting information. It is a filter that separates valuable information from background noise and fakes.
How do you develop critical thinking? Yes, not particularly. Try to think with your head, not to take a word for everything said, check and double-check the data. Remember that any information that comes to you is beneficial for someone. But for whom and what? And does it benefit you?
Systems thinking. In general, this is a whole separate science, but we will not talk about the complex. To make it easier to understand what it is, you can think of “non-system thinking.” When conclusions are made unstructured, judgments contradict each other, and decisions are made chaotically, generally a mess in the head. In turn, systems thinking is the opposite of all this. If you describe systems thinking in a nutshell, then this is a way to think holistically, and it is based on understanding the relationships between the elements of the system.
I don’t know how to correct this because I do not consider myself an expert in systems thinking, but the formula is the most obvious example of such thinking. The usual formula with which you can calculate something. We can calculate ourselves for any case based on the given conditions with a formula. Without a formula, we can know exceptional circumstances among some data.
It is much easier for those with an average technical education with systems thinking. There, they initially learn how to structure data and link them together. Learn to draw conclusions based on a known method. I recommend a good book on this topic: “Joseph O’Connor – Systems Thinking.”
Systems and critical thinking together are terrible forces
Working with a large quantity of information, analyzing it, and drawing conclusions based on critical and systemic thinking is one of the most needed skills, especially in investments. If this article has overflowed and overheated your “RAM,” I have bad news for you.
There is only one piece of advice here if “digesting” information is difficult for you – practice, practice, and practice again until it becomes easier. Learn new things, draw conclusions, structure data, and try to catch inconsistencies in incoming information.
Calculate the yield in dollars
Or any other hard currency. Rubles that can be 2-3 times higher than dollar returns (depending on how long you’ve been investing). But let’s not deceive ourselves; the domestic currency depreciation is sewn into the ruble yield.
By the way, it is foolish advice from financial advisers to keep the airbag in the currency you spend. It’s hard to argue with depreciation; if in 2014 you formed a pillow for yourself in rubles based on expenses for six months, then in 2020, it will be enough for you at best for three months. And it’s only been six years.
Do not think that there is a secret
What a sin to conceal, I once thought. There was a person, courses, or a book that would teach me how to invest. Someone is looking for the secret of how to love, get a good job, or not get sick. All of us are united by the find out for the magic button “happiness” (“loot” in the case of investments). Cunning people take advantage of this and actively promise to share their secrets for a modest fee. Some do not know only secrets but even basic things on the topic. Of course, some professionals can teach. But not in two days or even in two weeks. And not “for 1999 rubles when paying only today.” And if you are ready to learn independently, you can use my selection of free materials.
Investing is a process. If we take point A, where a person is when he still doesn’t know anything about investments, and point B is a seasoned investor. He smells the difference between rotten investments from cool projects or turnover amounts with more zeros than fingers on hands. Then, from point A to point B is undoubtedly not one step. Indeed, it is not a straight, smooth road.
Some steps make us better and bring us closer to the goal. You can move in big or small steps: walking, running, or driving. But you cannot take two steps in one step. At best, someone or something will help you take that one step. I hope that this article will be a positive step for someone. But there is nothing that can almost instantly teleport you from point A to point B. Moreover, you can perceive certain information only after some path from point A.
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