We caught up with young investor and money blogger Ryan Johnson to chat about how he got into investing (and writing about it).
Can you give a bit of an intro about yourself?
I’ve always been a bit of a numbers guy. I did a degree in Economics and Accounting. Interestingly enough, that degree also helped me with a major hobby of mine—playing internet poker. Today I work full time in an Analytics role.
When I’m not blogging or analysing, I’m playing basketball. I’m 2.04 metres tall (that’s a towering 6’8”) so I’m pretty much legally obliged to hang out on the court. Right now, I’m in a remote corner of Bangkok, Thailand, and I think I might be tallest person the locals have ever seen!
What's 'Money for Young Kiwis'?
'Money for Young Kiwis' was a website which aimed to help people grow their wealth so they can live richer lives!
It was aimed mostly at young people, but was for anyone that wanted to learn about investing and was confused by all the financial jargon and didn't know how to get started.
What made you start writing about investing?
It really sucks seeing people my age feeling frustrated they can’t get ahead financially. It’s really tough out there these days, and predatory fees and shady practices in the finance industry sure ain’t helping!
I want to empower people who know nothing about investment and the sharemarket, to become confident successful investors. This is something which I firmly believe is within anyone’s reach.
It’s also really great to write something from a New Zealand perspective—so many financial blogs and articles are aimed at people in the US or UK (what the heck is a 401k?).
People often think investing is just for rich people. What advice would you give to people who don’t feel like investing is for them?
This is absolutely not true! I know it can seem really frustrating and out of reach when people talk about investing thousands, especially when you don’t have any to spare. We live in an expensive world!
The thing is, small amounts now can add up to huge amounts over the long run. The power of compounding returns is truly awesome.
“A lot of people think investing takes a lot of time and that you need to be constantly studying the financial news. This doesn’t need to be the case.”
If you just buy and hold cheap index-tracking ETFs (Exchange-traded Funds – which track a whole market, like NZ or the US) you’ll get great returns over the long run and not have to bother too much about research. Buy, hold, whack it on an automatic payment from your bank and you’re sorted. This is actually what I do, and my investing plan is basically entirely automated now.
And what about the risk?
People are often worried about the risks of investing. People our age especially have grown up with recessions and chaos in world markets and thought “nup nup nup”.
What it’s important to keep in mind is while stock markets always fluctuate (sometimes crazily) over the short term, they’re almost always going to produce amazing returns over the long term.
“The biggest risk is missing out on the great long term returns that the sharemarket provides.”
Can you tell us about your first ever investment? What was it? And what was the process?
I’d ended up making quite a bit of money from playing online poker. But, I had absolutely no idea what I was doing with it. I didn’t want to buy heaps of crazy expensive stuff (except a sweet electronic drum kit) so decided to invest it instead. I had no clue how to invest, and followed the advice of friends, family and some people in the know.
I ended up spreading money across some actively managed funds, some gold and silver and some Apple shares. Some of these investments actually did quite well, particularly the Apple shares, and at the time I thought it quite the well-balanced portfolio.
While I did end up doing really well out of it when I sold the Apple shares, now I wouldn’t want so much of my money tied up in one company.
After that moment you became an ‘investor’, how did you feel?
It was a pretty cool feeling when I first started investing. It’s perceived as such a grownup, smart thing and I was both nervous and excited about it.
Unfortunately, as a fresh young thing new to the investing world, when the markets inevitably fluctuated and my investments were losing money it gave me crazy anxiety. I vividly remember checking my stocks app and getting all freaked out seeing any negatives next to the shares I owned!
These days, of course, I’m way more confident in my own knowledge and experience. I know that cheap passively managed funds are far better options than expensive actively managed funds. When one of my ETFs goes down in value it doesn’t worry me at all because I know they will make great returns over the long run.
What is the best advice you’ve given (or been given) about investing?
Get in the market and stay in the market! I know that trying to time the market is a battle you’re just really unlikely to win. Even professionals struggle to do it consistently. The best way to succeed over the long term is start investing now, keep investing regularly and hold for a long period of time (preferably 10 years or more)
Stay the course! Think of all the people who sold their US shares in a panic after the 2008/09 financial crisis. They missed out on the massive gains that happened in the boom over the next few years. You only lock in a loss when you sell.
Thanks, Ryan! 🙌