When you consider the range of educational choices offered to a new investor, you have to marvel at the spread of options now available (partially due to the arrival of a matured web packed full of educational content).
I could quickly list off a few distinct options:
- Books about investing
- Online courses (video-based)
- Investment training classes (physical lessons)
- Online blogs and finance news/magazines
- 1:1 mentoring or coaching
- Higher/Further education
- Professional financial advice
That’s quite a menu for an investment novice to choose from. Which is the best?
Which is the best option?
The task of seeking the best option is a false one. There is no single ‘best option’ which will universally provide a superior experience to all students.
This is because the needs, learning style, spending money and flexibility of each new investor will be totally different.
Consider the working parent, aged 36, who wants to finally get to grips with the stock market so that they can improve their pension saving for the future.
Contrast that with an undergraduate student, cash poor, who wants to learn more so that when they get a graduate job they can begin investing into companies they know and love.
Finally, what about a semi-retired individual who has just received inheritance from the death of a parent, and doesn’t know what to do with the money?
As you can tell, the needs of each person differ dramatically, as does the budget available to buy educational products. So let’s not try to pigeon-hole one option as ‘the best’ and consider which solutions might better match these three individuals.
Which education matches different scenarios?
The working parent’s pension provision
A working parent will be time poor, and will therefore need a very flexible solution or a time-intensive and quick solution. Therefore formal education is off the table.
Investment books allow for the ultimate flexibility, as they can be picked up and read in small stints during the day.
The student’s active investing journey
The student has plenty of time to learn about investing and could afford (in time) to develop a very deep theoretical understanding. They may also have the option available to them of selecting a single elective module in a finance related topic to get some insights from professors.
Therefore a bachelor’s degree module may be a good option. The irony of course is that any module will come with a significant reading list, and therefore the average hour spent by a student on that module may look quite like the working parent who is reading an investing book. The key difference being, that the student’s reading will likely be a curated shortlist of excerpts rather than entire topics.
The retiree’s inheritance challenge
The retiree has spent their entire life avoiding investment knowledge as they preferred to let someone else deal with it.
If they haven’t changed their mind, then professional financial advice might be appropriate, as this allows for the decisions to be suggested by a professional, and the lump sum of inheritance will probably be large enough to justify paying fees to receive advice.
Other options available include an investment class, if they decide that this inheritance is an opportunity to finally teach an old dog new tricks! As a retiree, they will find it easy to schedule in a regular series of classes, and might benefit from the ability to ask questions of the tutor as they proceed through the classes.