I am 28 years old, and I have accumulated net assets just shy of $1 million.
I made most of this money before going to college, and in college I majored in Economics and did relatively well. I have never held a job even remotely related to finance/economics/accounting, although I did own and operate several small businesses and I also worked as a programmer in the past.
I’m guessing that my situation is unique because I’m not constrained by the desire to get a job. My primary goal is to gain the education necessary to manage my own assets and maybe that of a few close friends. I hope that someday I will be able to generate 10% annual returns with low volatility. I hope that someday I will be better prepared than the average person when it comes to foreseeing and getting ahead of major economic downturns and collapses. I am passionate about getting good at this, as I’m sure many of you are. I am not against getting a job if it is the best way to learn skills related to asset management, but I am seeking your advice as to what combination of work experience and educational resources would be optimal in pursuing my goals.
I started trading when I was 18, with a very small account, and like most people, I lost money. I’ve since gotten a little better, and I did fairly well in 2011 and I’m up so far this year as well. I know this doesn’t mean much, but I’m just trying to convey that I have some experience and that I read financial statements and I know what implied volatility is and I trade some basic options spreads. But beyond that, I’m an amateur.
I want to learn more and I’m thinking about taking the CFA’s just for the sake of developing my intellectual understanding of how best to manage my money. Would it be worth it for me to pass 3 levels even if I never get a job? I know that there’s all kinds of garbage coming from academia, such as efficient market theory. But I want to understand everything, including the concepts I disagree with. I want a deep understanding of international economics, monetary economics, derivatives, risk management, accounting, etc. I want to understand in order to have an edge, but also because I fear what I do not understand. When I read news on finance.yahoo about some far off country’s policy actions and I don’t have the vaguest idea how to quantify its effects on my life and my finances, it scares me. I want to devote my life to understanding finance and economics + some accounting too. What is the best, most efficient way to do this?
I’m also really sick of just learning on my own without any community to support me. My friends are all pretty ignorant/uninterested in this kind of stuff, so I have no one with whom to check my understanding against, to see if I’m missing something. And if I join some kind of investment club, whether it’s in real life or an online discussion board, how can I even trust that the people there know what they’re talking about? I once met a professional value investor who managed a few million dollars for his clients and he didn’t know his ass from his elbow. Well, he did teach me about the importance of accounting with respect to value investing, but that’s it. He had no formal education in finance, economics, or accounting and he said that the CFA (or any license for that matter) is a complete waste of time and that I should just read books on my own.
Sorry for the long post. Any help would be very appreciated, thank you.