It was peak covid in Melbourne. You could only leave the house for two reasons:
- An hour of exercise
- Grocery shopping (only one person per household)
I loved it! Being indoors with a permanent excuse to read, watch movies, and hang out – it had my name written all over it. We were living with Charlotte’s mum, her partner, and friend. Packed house but it made for many lunchroom chats as everyone worked from home while I roamed around finding things to do.
One day, I woke up around 10 AM (typical during this time) and walked past the study. I saw the mum’s friend looking quite somber.
So I did the polite thing, asking, “Are you okay?”
She explained that a stock she’d been eyeing had gained tailwind, and she’d missed the chance to buy in at a lower price point.
Stocks. Low price point. Tailwind. My ears perked up as my curiosity was tickled.
“What kind of stock?”
She then spent the next 30 minutes explaining all the details and why it was a winner.
I had never been big into stocks, thinking it was just for wealthy old people to dabble in. Still skeptical, but curious, I did what any reasonable person would do – Create a CommSec account, bought $1,000 worth of shares, and spent the rest of the day and night researching the stock intensively. Satisfied with my findings, I finally dozed off around 3 AM.
For the next month, I was obsessed. I’d monitor my CommSec account daily, checking repeatedly throughout the day to see if I was in the green or the red. My mood swings became apparent that everyone in the house could tell how my investments were doing.
Note: This isn’t the right way to go about trading shares, FYI.
Over the month, I saw some positive signs with the help of my mentor – a veteran investor guiding this rookie. Encouraged, I invested another $2,500. In the space of three months, with covid still running rampant, the stock took off! It had partnered with another reputable company, causing a spike in the stock price. My initial investment of $3,500 multiplied nine times, now worth $31,500.
Needless to say, I was on cloud nine! Oh, and FYI, the mum’s friend hit the jackpot. She had significantly more shares and ended up cashing out a cool $400K. I was dreaming of all the things I could buy with my earnings. But I took the safe route, with some gentle nudging from family and friends.
Charlotte and I talked to a buyer’s agent to help us buy our first house. She started looking and found quite a few options. Our search criteria were:
- Newish build
- Easy to maintain
- Close to the city and beaches
- A spare room for visiting friends and family (you’re welcome mum)
After exploring a few options, we settled on a suburb called Prospect in Adelaide. I had no clue whether this was a good or bad choice, but it ticked all our boxes. We’d found a solid place to park our cash.
During this time, the government was dishing out free money in the form of First Home Owner Grants. Another big win! We were given $40K. Adding this to our deposit, we signed on the dotted line, and became official homeowners. Our house was a new build scheduled for completion within six months.
Over the next 12 months, something extraordinary happened. The housing market boomed! Our house’s value skyrocketed from $550K to $750K. We gained $200K in equity without lifting a finger. Talk about luck! But it didn’t stop there. Charlotte and I capitalised on the low interest rates, securing a fixed rate under 2% for the next three years.
Quick recap:
- Covid was tough, but it brought valuable opportunities
- Stumbled into a stock that netted me $28,000
- Bought our first house in Prospect, Adelaide
- Received $40K from the government
- Locked in a low interest rate under 2%
- Gained $200K in equity within 12 months
These wins during covid naturally made me feel on top of the world. I wanted to keep riding the wave. However, I also made some poor decisions by drinking my own Kool-Aid. I tried picking a couple other stocks that failed miserably. The tried-and-tested path is choosing stocks within your knowledge base that you plan to hold for a very long time. Remember: slow and steady wins the race. Be the tortoise, not the hare.
All of this wouldn’t have happened without a few key factors:
- Lady Luck smiling upon us
- Recognising opportunities and acting on them
- Great people guiding us with sound advice
So what’s the lesson here?
Be ready to take a leap of faith when opportunity knocks. Sometimes you get lucky, sometimes you learn. But if you sit on the fence too long, you might kiss a potentially good thing goodbye.
Life is Rich!