5 Lessons That Took Me 5 Years to Learn

Years ago I read a book called The Intelligent Investor by Benjamin Graham. It taught me how the stock market actually works. It also pushed me to change my mindset about money, and for a while I honestly didn't know what that meant.

Then COVID hit.

In March 2020 the S&P 500 fell 34% in about a month. Everyone around me was scared. One of the first things I thought was: this is the time to buy. That's when the mindset part finally clicked. Graham describes a character he calls Mr. Market, who shows up every day offering to buy or sell. Some days he's in a panic and will sell you anything cheap. You don't have to panic with him.

So I kept buying. Index funds, the TSP, and some individual stocks, every two weeks, automatically. I put every stimulus check in too. All told, I put in about $10,000. It grew to about $50,000.

Here's the honest part. Most of that growth came from individual stocks like Tesla and ETFs like VOO, during one of the fastest recoveries the market has ever had. I can't promise that happens again, and anyone who does is selling something. What I can show you are the habits that put me in position, because those you can repeat.

1. Automate before you trust yourself

I don't save what's left at the end of the month, because there's never anything left. My investing ran every two weeks without me touching it.

That mattered most in March 2020. If I'd had to log in and click "buy" while the news said the world was ending, I might have talked myself out of it. The transfer didn't read the news. It just ran.

Set yours for the day after payday. Start with any amount. You can raise it later. The habit is the hard part.

2. Living below your means is the entire game

The stimulus checks are the best example I have. Three rounds went out in 2020 and 2021: $1,200, then $600, then $1,400 per adult. I invested all of mine.

I could only do that because I was already living on less than I made, so I didn't need that money for bills. The gap between what you make and what you spend decides everything else, and you control both sides of it. Spending less is the side you can change this month.

3. Pay off high-interest debt first

I'll be straight about this one, because I didn't do it in order. I had about $5,000 across two credit cards while I was investing. I paid it off in about a year by refusing to pay just the minimum.

Here's why the minimum is a trap. On $5,000 at 22% interest, paying 1% of the balance plus that month's interest would take over 19 years and cost about $8,100 in interest. Clearing it in 12 months takes about $470 a month and costs about $600 in interest. (My math, rounded. Your card's terms will be different.)

My investments beat my card's interest rate in 2020. That was timing and luck. Credit card balances that carry interest average over 20% a year, and no investment reliably beats that. That's why this is still lesson 3: clear the cards first.

4. One income source is fragile

I have drill pay plus a civilian job. Two streams meant one bad month couldn't take everything, and that steady extra money is part of what kept my buying going every two weeks while the market was down.

A second stream doesn't have to be big. Drill pay, a part-time job, freelance work, a small side business. Even a small one means one bad month hurts less. If you're on active duty, check your branch's off-duty employment rules with your chain of command before you start anything.

5. Invest in yourself

One book changed how I handle money. That's the best return I've ever gotten, and it didn't come from a stock.

I kept going after that. I went through FourBlock's veteran career training, a free, semester-long career readiness program for veterans and military spouses. I've trained myself in cybersecurity, kept reading, and went back to school for an Information Technology degree.

None of that shows up in a brokerage account. All of it shows up in what I can earn and how I think. If you're getting out soon, look at programs like FourBlock and use the education benefits you earned.

Bonus: Buy when everyone's scared

This one wasn't on my list until 2020. When the market drops hard, the news makes it feel like it will never come back. In 2020, the S&P 500 fell 34% from February 19 to March 23. By August 18, it closed at a new record high. People who sold in March locked in their losses. People who kept buying got the discount.

This doesn't mean you can call the bottom. I couldn't. It means you keep your automatic investing running when it feels worst, and if you have extra cash, that's when it goes furthest. Mr. Market is panicking. You don't have to.

Start this week

• Set one automatic transfer for the day after payday, any amount.
• Write down what you made and what you spent last month.
• List every card balance with its interest rate. Pay more than the minimum on the highest rate.
• Pick one second income option and check the rules on it first.
• Pick one book, course, or program and give it a start date.
• Decide now that your automatic investing keeps running through the next drop.

These are simple. Doing them every month is the hard part, which is why after five years, this is still my list. Past results, mine included, are not a promise of future ones.

For the next checkpoint down this road, see 10 Lessons That Took Me a Decade to Learn.

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Disclaimer: I am not a financial advisor. The information provided here is for educational purposes only and should be verified independently. See the full Disclaimer.