46: Discover Your Investment Style

How to begin investing and discover your investment style.

In this episode, you’ll learn:

1. What makes a poem a poem and not a novel.
2. Why there are so many different ways to invest.
3. Three major decisions when it comes to investment style.
4. Why your investment style needs to align with your unique personality.
5. How the course Learn To Invest In 7 Steps can help you determine your investment style.

Show Notes

The portion of Samuel T. Coleridge’s Biographia Literaria referred to in the episode.

The Richest Man In Babylon by George S. Clason

The Greatest Salesman In The World by Og Mandino

Think and Grow Rich by Napoleon Hill

How To Win Friends and Influence People by Dale Carnegie

Summary Article

How To Start Investing

In 1798, William Wordsworth and his friend and neighbor Samuel T. Coleridge published an experimental volume of poetry called “Lyrical Ballads”.

Their aim was to depart from the elevated and learned tone of traditional eighteen-century poetry and use the conversational language of the middle and lower classes.

Coleridge describes his poetic focus as “directed to persons and characters supernatural, or at least romantic.”

The aim of Wordsworth’s poetry was to focus on the ordinary in a way that gave the “charm of novelty to things of every day, and to excite a feeling analogous to the supernatural, by awakening the mind’s attention from the lethargy of custom, and directing it to the loveliness and the wonders of the world before us.”

Although Coleridge and Wordsworth started this writing project at the same time, Wordsworth was much more prolific and contributed most of the poems to “Lyrical Ballads” while Coleridge contributed only five.

A Mixed Reception

The reception to Wordsworth’s poems, including his use of common language, was diametrical. There was as Coleridge describes an “eddy of criticism” that violently “whirled” the poems “round and round,” boosting their notoriety.

At the same time, Coleridge describes the “religious fervor” that characterized the intensity of Wordsworth’s admirers, most of whom were highly educated young men.

The Whole Is Defined By The Parts

In his 1817 book “Biographia Literaria”, Coleridge reflects on the response to his and Wordsworth’s experimental volume of poetry and then attempts to answer the question what makes a poem a poem.

He asks is a poem simply the presence of meter or other rhetorical devices such as rhyme? If we added meter to a novel would it then be a poem?

Coleridge’s answer is profound and goes beyond poetry and can be applied to a myriad of topics including personal finance.

Coleridge states, “The answer is, that nothing can permanently please, which does not contain in itself the reason why it is so, and not otherwise.”

In other words, a unique and satisfying whole is comprised of and defined by its parts.

A poem, for example, has numerous elements inherent in its structure that makes it a poem and not a novel.

Unlike a novel or a work of nonfiction, every line of a poem is equally important. A poem is not something to be scanned to get the general idea. Rather, Coleridge writes “the reader should be carried forward, not merely or chiefly by the mechanical impulse of curiosity, or by a restless desire to arrive at the final solution; but by the pleasurable activity of mind excited by the attractions of the journey itself.”

Each line of a poem excites “more continuous and equal attention” than a line of prose.

According to Coleridge, another distinguishing feature of poetry is how it balances or reconciles opposites or discordant qualities —“the general with the concrete; the idea with the image; the individual with the representative; the sense of novelty and freshness with old and familiar objects; a more than usual state of emotion with more than usual order;

Coleridge concludes motion is the life of poetry and imagination its soul.

Investment Styles Are As Varied As Poems

Just as physical objects have within themselves qualities and characteristics that make them what they are and not something else, the same principle applies to people.

Each of us is utterly unique, not just physically, but mentally, emotionally and spiritually. We differ in our experiences, our interests and our talents.

I often get asked by individuals how to get started investing. The implication is there is one best way to invest, and if they could just be shown the right path then they could begin the journey.

I have known many professional investors over the years and have found they are as unique in terms of how they approach the financial markets as one poet, novelist or painter is from the another.

Some preferred to invest in a few select stocks in a particular industry, others invested across multiple asset types.

Some held their investment holdings for a few weeks while others kept the same positions for years.

Some preferred paper assets like stocks and bonds and others preferred to invest in physical things like real estate or timber.

Some preferred start up companies while others preferred established entities.

Then there are investors that don’t care for investing at all and outsource the task to a financial advisor or use one of the new online investment advisors, such as Betterment or Wealthfront.

Each of these investors gravitated to a style of investing that suited their personality, likes and interest. The whole of how they invested was a function of their individual characteristics (i.e. their parts).

How To Start Investing

The best way to learn to invest is to start. Open a brokerage account. Many online brokerage accounts have no minimum.

Buy a stock, an ETF and/or a mutual fund with a small amount of money. Observe your reaction to the market gyrations that impact the account value.

Seek out virtual investing mentors and learn from them. Read their publications and books.

Just keep experimenting and learning and you will discover an investment style that fits you best.