Early life lessons

Max's father

I had saved $1,000 from a summer job in college. I had learned in high school & college the importance of not just saving your money but investing it too.

But I didn’t understand the “how” of investing.

How do you buy stocks, or bonds?

So I asked my dad.

My dad referred me to his broker at a name brand financial company.

My dad had been “working with” this well-groomed 55-year old man for the past 30 years, managing my parents’ investments & savings.

I get on a phone call with the guy–he tells me “since your father’s my client, sure I will create you a brokerage account. What do you want me to buy?”

I remember I spent several hours after that phone call on free stock research websites like Yahoo Finance, Google Finance, Morningstar.

I settled on an exchange-traded fund–a real estate investment trust ($FTY, now $BLK:US) and called up the guy to place my order for $1000 worth of $FTY.

“The trading commission will be $70.”

So I had bought $930 worth of $FTY for a $70 commission.

I spent 7% of my savings on a commission to be able to buy $FTY.

And it would have been another $70 or 7% to sell my $FTY!

Is that a lot? Is that a little?

It is a lot.

At that point in time (2009) you could open a free account with Charles Schwab where trading commissions were $7/trade.

So my father’s broker was 10x more expensive.

All for the opportunity to be able to place your order of the telephone, rather than a website.

I still rage at this experience.

But this experience taught me, there are even some very adult topics (like finance) that your elders (in this case my father) may not fully understand.

You must follow your passions & watch out for yourself–channel your rage into understanding.

Maybe one day you will have gained wisdom to impart to your family & friends that your parents did not.

· psychology, advice