Mind Your Own Business, Invest

(This is an edited version of a speech I gave at Toastmasters, Zurich. Toastmasters is an organisation that helps you become better public speakers.)

Most of us spend our lives working for some person or company. Most of us hope that this person or company will take care of us and our needs. And when these needs are not met, we change jobs in the hope that some other company will take better care of us. But what we don't understand is the fact that when we work in a company, we work for someone else. Why would this person take care of your needs at the cost of his? He would first take care of himself, and then if something is left over would he look towards you. Fellow toastmasters, today I will tell you how to get out of this vicious circle. Today you will learn how to start minding your own business and stop worrying about salaries, today you will learn about Investing.

What is Investing?
Investing, simply put, means to put your money in a place where it will grow and give you more money. People generally invest in Stocks i.e. they buy a part of a company they think will do well. People invest in Real Estate i.e. they buy land which they think will go up in value. People buy precious metals like Gold hoping that the value of gold will go up. These are the three main avenues of investment. Investing in Stocks is the most convenient by far and probably the best way to invest. All you have to do is open a safekeeping (demat) account with your bank and you can start buying stocks. I would recommend investing money in Mutual Funds, which analyse companies and buy stocks for you.

But investing requires time to understand and you have to know what you're doing. This brings me to my second point of Why should you invest? Why should you spend the time to learn how to invest?
To become rich. But what does it mean to be rich? Does it mean that after retirement you have enough money to live a comfortable life? Does it mean that you have enough money to send your kids to college? No, anyone can do that. Being rich, for me, means that after you die you leave a substantial amount of money for your future generations, so that they may build upon it even more than you have. That is being rich.

And how does investing help you do this?
Let me explain with the help of an example, consider the simple case of buying a car. A normal person buying a 30,000 CHF (swiss francs) car takes a loan to buy it. He pays a little more than 500 CHF a month for 5 years. So at the end of 5 years, what does this person have? He has a car that is worth only half as much as the original value i.e. about 15000 CHF.
What does an investor do in this case? An investor waits. He waits till he has enough investment to generate 500 CHF a month. Then he takes a loan and his investment pays for the loan. So at the end of his 5 years, he has a car worth 15000 CHF plus he has his initial investment. This is not like saving money to buy a car, investing lets you keep the money you have and still lets you buy the things you want. This is the fundamental concept of investing.

Before I conclude, I would like to again put in a word of caution. Investing without knowing what you're doing is dangerous. That is why I have included the names of some great books on investing in the handout that you have in front of you. They will help you get started.
And where can investing take you? There is a guy called Warren Buffett. He did not make any software, he did not inherit his money. All he did since he was 25 years old, is to invest. He my friends is the world's second richest person and the world's greatest investor.

(Books on investing mentioned in the handout are the same as the three mentioned in my previous post: Investment Vs Speculation)