When to Start Investing: An Unconventional Answer

This article addresses the question of when to start investing, arguing against the common advice of starting with small amounts. Instead, it proposes a strategy that prioritizes income generation as the primary foundation for wealth building, especially for those starting with no assets.

The Market Environment and Its Challenges

The author notes that we are in a prolonged “bull market of everything,” where assets like stocks, gold, and real estate are near all-time highs. This environment creates two key problems:

1. Asset-less individuals fall behind: Rising costs of living and consumer culture make it increasingly difficult for those living paycheck-to-paycheck to save and build wealth.
2. The investor’s dilemma: Potential investors face the tough choice of buying at market peaks or waiting for a correction, risking missed gains and the erosion of cash value through inflation. The author advises against trying to time the market.

The Core Argument: Income First, Investing Second

The central thesis is that for individuals starting from zero, their most crucial asset is their income. Therefore, the primary focus should be on maximizing earning potential by investing in personal skills, education, and career development. The author suggests a concrete threshold: focus on investing in yourself until your annual income surpasses 100,000 PLN. Only after reaching this level of income should the focus shift to investing in the capital markets.

Conclusions and Takeaways

The recommended strategy is to first build a strong income foundation. Once your income is substantial (above 100k PLN/year), you can begin systematically building a financial portfolio, for instance, by maxing out tax-advantaged retirement accounts (like the Polish IKE). The author also reframes market downturns, viewing them not as threats but as valuable buying opportunities for long-term investors. Building wealth effectively starts with human capital (your ability to earn) before deploying financial capital.

Mentoring question

The author suggests a specific income threshold (100,000 PLN/year) before one should start investing in the stock market. Do you agree with this ‘income first’ philosophy, and how would you define a similar personal threshold for shifting focus from career investment to capital investment?

Source: https://52notatki.substack.com/p/kiedy-zaczac-inwestowac-i-zaproszenie