IV. Investment Wisdom Learned from His Children

He and his family were on vacation, betting money while playing golf with friends. His two sons were also present.

The friends suggested the children jump from a 15-foot drop, betting $100 each. The 8-year-old younger son jumped first, landing safely; the older son hesitated and missed.

In the end, the children won money. They asked if they could invest in the stock market.

He gave the same advice: “What do you like? What do you think is good and useful? Go see if that company is a public company, and then buy it.”

The older son said, “I like Virgin Galactic’s stock price.”—He made some money, sold it, bought a computer, and never touched the stock market again.

The younger son said, “I like Xbox, PlayStation, and Nintendo.”—He bought shares in all three, achieving an annualized return of about 30% over the past three years.

In conclusion: If this is your first investment, look around and see what products you like, what you think are well-made, and what you’re willing to pay for.

Find out who manufactures them and whether they’re publicly listed companies.

This is a great introductory method for beginners.