My way to the wise way of money: From the beginnings to the first major lesson

In my childhood, I was particularly shaped by a nickname: “Mr. Sparing”. I grew up in a large, Christian family in the country in the Netherlands. Although the picture was right with tulips in the garden, we didn’t have any clogs – a cliché that you often see in Amsterdam’s tourist shops. Apart from such stereotypes, my family was typically Dutch: clever, business-worthy anddown to earth.

From family business to first lesson in dealing with money

My father ran an electronics store in the village with other family members. He taught me early on that you first had to work hard for your money and then handle it carefully. I deeply internalized this lesson.

Pocket money, piggy bank and the joy of saving

Even as a child, I was satisfied with my little pocket money, which I earned with help in the family shop and in the household. I counted my savings every day, looking for ways to grow my piggy bank – not only through more income, but also through economical behavior.

The financial diet: spend less, save more

My motto was simple: The less I spent, the more left. So I started a kind of financial diet early on, got to know patience and the principle of compound interest – a magic that my father explained to me.

The Eighth Wondr of the World: The Power of Competition Interest

My father showed me the compound interest effect that Albert Einstein described as the “Eighth Wonders of the World”. The math behind it is simple: 100 dollars with 10 percent interest will grow to $121 in the second year because interest is accrued on interest. For a child who saved small amounts every day, the pure fascination was.

First investment experiences: The search for higher returns

At the age of 14, I discovered the possibilities to increase my money faster. Early 1990s interest rates were comparatively high: A low-risk bond fund gave me a return of 6 to 8 percent. I invested my savings and followed the price development intently – but that was too boring for me.

Impatience and entry into the stock market

After two years I became impatient and wanted to invest more actively. My bank advisor suggested mixed funds or equity funds, but I wanted to choose stocks myself, convinced to learn more and make better profits.

The Adventure Share: Investment in a Dutch aircraft manufacturer

One of my first investments was a stake in a traditional Dutch aircraft manufacturer that was in financial difficulties. Despite the crisis, I believed in a recovery, especially because the German partner described the company as his “favorite”.

The dramatic price losses and the painful exit

I bought stocks of 12 guilders, but the price fell to 4 guilders. The daily losses were hard to bear – I sold and two weeks later the company filed for bankruptcy. The stock remained at a low level for years before disappearing from the market.

The most valuable lesson: losses as an investment in knowledge

Despite the loss, this experience was invaluable to me. The lost money was my “study fee” for dealing with risks and market mechanisms.

Overestimation as a dangerous misconception

I learned that overconfidence is one of the biggest risks of investing. My bank advisor on diversification was reasonable, but as a teenager I thought I was particularly smart and wanted to put everything on one card.

Unrealistic optimism and its consequences

My belief in the rapid recovery of the ailing aircraft manufacturer was based on optimism. Although optimism helps in everyday life, it can lead to wrong decisions as an investor.

Finding the balance between trust and caution

You shouldn’t constantly doubt yourself or become overconfident. The right attitude is in a healthy middle ground between self-confidence and caution.

Interest rate: A double-edged sword for losses

The compound interest is usually positive, but in the event of losses it can work against you. A 67 percent loss requires a 200 percent return to restore capital – a challenge many investors underestimate.

Risk and return: An important distinction

I realized that high risk does not necessarily mean high returns. The confusion of risk and opportunity led me to invest in a crisis that cost me a lot – but also taught me to treat the market with respect.

Patience, Diversification and Realistic Expectations are the Key

My path from the frugal boy to the cautious pier showed me: Success on the financial markets requires patience, risk diversification and a realistic assessment of your own skills – without losing courage, but also without high spirits.