Hindsight’s a wonderful thing. Had I known at 18 what I know now (almost two decades on), I suspect I’d have a much higher current net wealth. For me, investing isn’t about ‘getting rich’ - it’s about developing the freedom to shape a life not dependent on the 40-hour work week.

The global FIRE (Financially Independent, Retire Early) movement takes an aggressive approach to this concept, advocating investing early, living somewhat frugally and retiring years, often decades, before the traditional pension age.

Reflecting on a slow and fairly late start to my own investment journey, what are some of the most significant things I wish I could tell my younger self? There are a few crucial lessons which can hopefully benefit those earlier in their own journey:

1. Time in market/timing the market

When I first started dabbling in the share market, I tried to “beat the market” via short-term buying and selling, often reacting to media-reported events and issues around the companies I’d chosen. Over time I realised it’s VERY challenging (even for seasoned investors, unlike myself) to predict market movements … and I took plenty of losses along the way.

By focusing on the long-term growth potential of my investments, I now follow a buy-and-hold strategy, where you can benefit from the natural upward trajectory of the market over time. Short-term fluctuations can have much less impact on your investments if you can ride out the dips and then, usually, enjoy eventual recoveries.

2. Harnessing the power of compound interest

Had I better understood the huge power of compounding interest at a young age, I would have squirreled away a lot more, a lot earlier. Compounding interest refers to reinvesting any returns from your investments, which allow you to earn more on the accumulated investment amount. When combined with time in the market, your investments follow an exponential growth curve, making a significant impact on the long-term potential of your portfolio.

The trick to taking advantage of compounding interest is to start early, even if you can only afford to invest a little, often. The same dollar amount invested over a longer period of time (at a similar rate of return) will be significantly higher than investing that amount over the short term.

3. The benefits of passive investing

Actively investing (with money that you can afford to lose) can be fun, and may teach valuable lessons around trying to predict the market. However, I wish I’d known earlier the long-term benefits of following a passive, index-based investment approach, something that global research supports. Passive investments often mean lower fees, more diversified portfolios and consistency of returns, by reducing the risks associated with individual share selection.

In keeping with my “buy-and-hold” approach I’ve retained my Sharesies investments, but have evolved towards a lighter touch, lower cost strategy also investing weekly into a low-fee, diversified managed index fund that I know will accumulate wealth over time.

A final note on Dollar-Cost Averaging

DCA follows the idea of “invest a little, often” (meaning you regularly invest a fixed amount of money into whatever investments you choose) regardless of what’s going on in the market. This means you buy higher volumes of shares (or units in an investment fund) when prices are lower, and while you’ll buy fewer when the prices are higher, your overall investment will benefit. Over time this helps smooth out the effects of volatility and can lead to better long-term outcomes for your investments.

Investing can be a lot more simple, and easy, than you may think based on the proliferation of “experts” out there who’d prefer you pay them to do it for you. Arming yourself with knowledge early on - and just getting started, making mistakes, and optimising as you go, can set you on a great path to financial freedom maybe earlier than you think possible.