Several years ago, I converted a small academic pension into a decade long annual annuity.
I used to be a teacher and an academic adviser many years ago. So, I had a small pension that I could have looked forward to in old age.
A mini-retirement nest egg.
When I converted my pension into an annuity, the investment and pension company created a contract where I would receive an annual payment for a decade.
It was the worst decision I ever made. I didn’t make this decision after carefully considering my options or after engaging in intense research about how such a decision would affect me.
To be honest, I was broke and thought it would be a great idea to get some quick money in my pocket.
For a short-term financial benefit, I sold out my long-term financial benefit potential.
As a result, I shortchanged my own chance for partial retirement payment.
My annuity has been very welcome over the years. It has come in handy in some very dire financial situations I found myself in.
But I look back and I wish I had shrewdly invested it.
It might have paid off by now.
I received a lump sum payment of a few thousand dollars to start off. That was then followed by annual payments for a decade.
I am learning about the stock market and small-scale investments one can make while learning about investment.
But the small-scale investment that I am talking about is myself.
“Skin in the Game”
Have you ever had an idea for a business? Who doesn’t want someone, like potential investors, to invest in you and your idea?
I have learned that investing is like jumping into a pool, except everyone at the pool party has anxiety.
No one wants to be the first one to jump in the pool when it comes to investing, especially when it comes to new and untried business ideas.
Most startup businesses organize 3 rounds of corporate fundraising drives to secure enough investors to officially launch. Investing is like an anxiety-ridden pool party – no one wants to be the first one to jump in. So, why not be the first investor? After all, it’s your business. I learned this lesson long after wasting too much money to take advantage of it.
I am ashamed to admit that I didn’t understand before that if you need an investor for a business idea, then the best way to seriously attract other investors is to first invest in yourself.
How many times have you ever thought to yourself, “How can I get an investor to take me seriously?”
Investors and financiers take ambitious business people seriously when its evident such enterprising individuals take themselves seriously.
In other words, you must have, “skin in the game,” when it comes to investing.
Instead of thinking of researching which stocks or companies to best invest in, I should have been thinking about how to invest in myself.
And, how to profit from a self-beneficial investment, if even in a small and incremental way, as a proof-of-concept fundraising measure to assure potential investors of profit potential and viability.
All I needed was the right, and realistic, business plan for my needs.
I know all of this now. But man, if only I knew it then.
Nothing in life is easy, especially when it comes to realizing a dream.
Still, as human beings, we tend to make life more complicated than it needs to be.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.
