As we take this day to acknowledge the sacrifices that military veterans have made and continue to make, I can’t help but reflect on the lessons I learned while being in the military-both in the field and in the markets.
I graduated high school with the goal of going to college. But after growing up in a single parent household, there was not a whole lot of money to pay for it. So, I joined the army and received a college fund and a different kind of education to go with it. I was an army Combat Medic serving in forward aid stations, attending medic on a medi-vac helicopter unit, as well as in a main hospital for theater. At Ft Riley we trained and trained and trained some more. Then, when we were finished cleaning our gear from training, we trained a little more. I couldn’t understand why we trained so much. Then I went to the 1st Gulf War, and in an instant I figured out why we trained so much. To those that have never served they may view veterans as being disciplined. To those that have been in the dirt, we view it as the trained or the untrained.
Before I left for the military, my uncle sat 6 of his nieces and nephews down and talked to us about owning real estate. So, when I arrived at my duty station of Ft Riley, Kansas I was intent on learning all I could about real estate and stocks. I started reading everything I could on stocks and business. I read but didn’t understand much so I had a pad and paper and would write down words I didn’t understand and would look them up in the base library. I joined the book of the month club and started reading everything I could and still read a book a week to this day. I picked up the business section of the newspaper from the Day Room because it was always available (the sports section wasn’t). It was in the business section that I first learned about Warren Buffet and Berkshire Hathaway.
Two things got my attention:
1. A single share of Berkshire stock was valued at over $9,000.
2. Warren Buffet was doing his thing from Omaha, Nebraska and refused to move to the coast.
I told myself that if Buffet can do what he was doing from Nebraska, I could do it from Kansas.
So, for those two reasons, in 1988 I bought a share of Berkshire stock (ticker symbol: BRK-A). Then, I bought several shares of Zenith electronics at $25 a share because I was familiar with their brand. Most people these days have never heard of Zenith but it was the equivalent of Samsung or Sony.
There was no Excel spreadsheets in 1988 that I knew of so every day I painstakingly wrote the stock price of both companies in a notebook (I found that notebook a few years ago but I don’t know where I put it since).
Then two things happened:
1. Zenith went from $25 a share to $0 as it is no longer listed.
2. Berkshire Hathaway went from $9,000 a share to over $600,000 a share the last time I checked.
These two companies taught me my first lesson in the market: Price vs Value. Value investing is also the principle that Buffet uses after he studied Benjamin Graham.
While Zenith was far cheaper than Berkshire, Berkshire had better value. This is a simplified analysis of what transpired to illustrate the importance of finding the value of a company and to not just look at the price.
While in Kansas I also started taking math courses at Kansas State since they had an annex on base. I also saved up my money and my leave (vacation days) and cashed it out to help with my real estate purchase. Then, after 3 years of studying, learning, and saving, I was able to buy my 1st investment property at the age of 21.
Since then, I’ve retired early, and now that I’ve reclaimed my time, I use it to teach financial literacy to the youth, young adults, and the mothers who raise them.
To help spread the message of financial literacy, share this with 3 people:
- Your children/family
- Your good friend
- Your work buddy
Then ask them to give YOU their opinion on this post.
MonkSays.com