3 Analogies to Help You Start Investing

Give rationality to your money.

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I am 27 and I have been investing a major chunk of my income for the last 3 years now. I understood the importance of investing quite early in my life and I’m glad I started. It’s is a skill that anyone can acquire.

It can be intimidating at first because you will be bombarded with a lot of information. I am not an investor by profession but I always treat myself as one, a huge psychological tool.

Here I have shared 3 analogies that I consistently use:

Analogy 1: Extractive institutions

Russia experienced a huge economic growth under extractive institutions model for almost 5 decades. The growth came to a halt eventually since the incentives were so poorly organized. No motivation, no productivity thus no innovation.

Usage: Investing requires patience, a lot of patience. I fabricated a long term mindset when I started to invest since I am not looking for a short explosive growth. It’s more important in investing than any other field to allocate your resources(money and time) wisely. I invest 55% of my monthly income with the majority being in low-cost index funds. Don’t treat investing as just another paragraph to add in your “My 5 Passive Income Streams blog”.