How to start investing with no money – story of Strive Masiyiwa


Strive Masiyiwa is one of Africa’s most intelligent and richest men. Forbes currently estimates his net worth to be around $600m. Though Strive made the majority of his money as an entrepreneur by founding Econet wireless, he has always been interested in investing in the stock market – even when he had no money!

 

The following is an extract from a piece written by Strive Masiyiway:

When I was still only 17 years old, I asked an elderly gentleman who was a headmaster at a school, about buying shares on a stock exchange. He was not particularly rich, but every day he would get a newspaper and begin to look at the stock prices, in much the same way many of you read the sports news.
“Do you need to be very rich to buy shares?” I asked him.
“Not really. Here in England, even working class people, like me, can also buy shares, if they know what they are doing.”
“Can you teach me, sir?”
“Off course, I can. Why don’t we start you trading right away!”
“But I have no money!”
He told me to bring a clean note book, which would act as my book on buying and selling stock.

“Let’s create a fictitious £1000, as your share buying account.
Now what I want you to do is to choose some companies, and pretend you have bought some shares, using your money. And every day you must check how your companies are doing.”
In less than half an hour, I was studying the stock prices of companies, and choosing which ones to buy with my £1000. I carefully wrote down which ones I liked.

Soon I was checking every day, how I was doing.
“The trick is to get to know your businesses. Remember you have “shares” which means you are a part owner in these businesses.” He said to me gently.

Before long, I had become disciplined in checking prices of “my companies”, because I had a “share” holding in these companies. If I heard anything mentioned about these companies, I was quick to check.
“Do your research, son; you must know “your” businesses. Those big managers, they work for you… Its your business, not just theirs.”

Soon I was passionately debating companies with him, and others…just like some of you discuss sports scores. Only these scores could make me money!
When my companies were not doing well I would get distressed, and if they did well I got excited. If they paid a dividend, I recorded it in my book.
“Easy, isn’t it?”
“Very easy, sir.”
“You will be a millionaire one day.”
“I hope so sir.”

That was a long time ago.

Whilst I did not buy real shares until I was working, many years later. Through this simple game I trained myself to understand Stock Markets, and share buying techniques. I bought books, I read financial and company news in newspapers. Whenever companies published their results in the papers, I studied them carefully, and read all the commentaries. I undertook accounting courses to help me understand how to read statements of companies.
When I needed to raise money to build a business, I knew exactly what to do!
THERE ARE NO SHORTCUTS OR FORMULAS TO THIS APPROACH.
I have taught you 100 x more than that blessed old man, who drew my attention to the simplicity of Stock Markets, even for ordinary people.

You see, Strive Masiyiwa learned his trade by doing. To become good at investing, you need to dip your toe in, even if you are not using real money. This is because it will make you learn quicker as you will want to know how well your investments are doing. Whilst Strive used a note back, today you can use online platforms which give you virtual money so that you can trade for free. One such platform is eToro. With Etoro you can open a virtual account to learn how to trade stocks. Etoro is a ‘social networking’ trading platform offers the unique benefit of seeing what other traders are doing, learning from them by reading their analysis or simply ‘copying them.’

 

The importance of investing can not be underestimated. The stock market is the only level playing ground that can make low to medium income earners millionaires, even billionaires over time. The Stock Market can properly redistribute the wealth of every Nation where it exists. The major challenge is proper educations about how the Market works. For example, you see people compare investing in “Shares/Stocks” to other forms of Investment, and I tell them, there is no such thing as investing in “shares” or “stocks”; you invest in companies (viable businesses by owning the companies shares. There seem to be a conscious effort to hide the real benefits of investing in the Companies listed in the Capital Market (Capital Market is another phrase for the Stock Market). The Media’s focus on the speculative aspect of the share prices, in my opinion,is very deceptive.

In his own words, Strive states that “ if you do not know how to invest properly you will never really have any wealth of your own.” Investing must be always at the forefront whether you are in business or working!

Strive Masiyiwa even has advice for the risk averse:

Someone said, “I don’t like shares on Stock Markets because they go up and down!”

Strive stated, “Not if you are Warren Buffet!”

  •  the truth is everything, including land and property can also go up and down, even if you cannot see it happening on a daily basis. Even the value of the “cash” in your bank account is also being weakened by inflation and currency devaluation.
  • all those billionaires you read about, including the likes of Bill Gates and Warren Buffet, their wealth is not in property and land., and they would be the first to tell you that “cash” is “too risky”; Its mostly in shares of companies!
  • You would do well to follow the “smart money”. I will talk about this again one day, if I have time.
  • All risk is mitigated through increasing your knowledge, rather than listening to “old wives tales”.
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