Hi Julia,
Great thread. I decided to respond because my story seemed so different to everyone else who posted.
History, parents are both uni educated professional migrants (Iran-Iraq war on the Iran side, came here when I was 1). Both had to re-educate to be recognised by the Australian system so there was hard work to get where they are but no back breaking labor or double shifts involved.
We weren't poor but not rich either, so we never went hungry or missing the important things but I do remember haggling for a $30 xmas present based on my grades one year.
Basically I developed an indifference or even distaste for money very early on in my life because parents would often attach strings to it. So until I had a job I rarely asked for money unless it was important to me at the time.
Got lucky in the sense that I managed my foot in the IT profession door well before "my time", so I was working for professional money each day after school while most of my friends were still stacking shelves. Don't get me wrong though I've stacked plenty a shelf and even been a spruiker at Luna Park.
The value of money for me was always the independence provided, rather than the ability to spend nominal amounts of money on cars, alcohol, mobile phone plans that were always the cause of requests for loans from my mates and dubbed me the nickname "Bank of Sinner".
Due to family stress in 2006/2007 I started spending a lot of time at my best friends house and became close mates with her father. Turns out he is a gold bug and would often quote the price of gold to me in AUD and USD and tell me about the Federal Reserve etc. I didn't understand any of it but it piqued my interest.
Over the next two years I was researching the gold market in a passive way, to me it was just a non-BS version of the financial news, why did I care if gold went to $5000, I could earn $5000 before it got there! But in hindsight I was absorbing the information of supply/demand, charting technicals and gold market specifics through simple osmosis.
During my uni degree I landed a job at a major cable television providers master control room, working 12 hour shifts from 7pm-7am for $38/hr. High stress role monitoring and maintaining a millions of dollars per day encryption system. At this point I was studying full time and working 24-36 hours a week on nights and weekends. The wage money began piling up hard and I was still completely indifferent to it.
However this job allowed me to sit and watch the European and NY markets roll live all night, right up until the close. I began to develop a passion for charting and 24 hour markets.
Around this time I moved some of my savings into physical gold and took my super out of the market. I pestered my parents to do the same. But my father, who is a macro-economics professor with numerous publications etc scoffed and ridiculed me saying all my information was wrong, doomsday talk etc etc. He eventually only conceded that he should have bought some gold and moved his super out of the market after it was too late (he wouldn't even concede after Lehman popped).
Later he told me that in 2009 during one of his classes his students asked
"Did you see the GFC coming?"
"No, but my son did and he was right on the dot!"
"Does he study econ?"
"No, comp sci"
"
"
heheheh
Anyway, still being quite new to the whole thing I was enamored with the whole gold bug thing and was big on Jim Rogers. I wanted to be in on the energy/gold/Asia play. So being the comp geek that I am started widening my range of financial blogs and forums to look through, and found ASF.
Thanks to ASF, I ended up buying parcels KAR, ESG, CVN, IAU, TRY, IGR all around their 2008/early 2009 lows to fit Rogers concepts. I also picked up some IZZ and IHK at the time. This cost me the bulk of my savings, so after the purchases I was pretty much locked out of the market unless I wanted to liquidate or put more money in. So I just continued to work and live, watching the realtime charts as often as I could.
In 2009 I finished my degree and took a job at UniMelb. Decided the move to Melb would be easier with more cash and it wasn't apparent that there was about to be a hyperinflationary collapse, so I liquidated the majority of my holdings with some shares left in each company. The profits were fantastic, I was very happy with it. Also around this period, I liquidated lots of my physical gold holdings and converted it to silver. In hindsight, this was a great move, and I am about to liquidate the silver at almost triple the entry price for a switch back to gold.
However, still for me it was just a matter of "fun", I wasn't sure why I was doing any of it except it was very interesting. My living costs were low, so I didn't feel like I was doing it to make more money or whatever.
By now I was flush with cash and well acquainted with forex and futures and leverage and began trading the GBPUSD or EURGBP during London session with my stock profits when I would come home from work. This was a trial by fire and completely burned away all the gold bug thought process. In the end price is price, if you're not right you're wrong. However, I was lucky to enter these markets at an interesting point and it was mildly profitable rather than horribly unprofitable in hindsight. Now my gold bug past forms a sort of fundamental basis for my understanding of the markets.
These 5 in a row blocks of 12 hour rounds of intraday trading during lulls at work fueled my passion even more and somewhere along the line I came across the principle of "Income, Savings, Investment". If you don't mind I'll re-write what I wrote down as notes not that long ago.
Income: Income is the money result of any productive activity (not including trading, earning interest or earning rent).
Savings: Savings should be safe, liquid and easily accessible. A portion should remain in physical gold, the rest in hard and soft cash spread across various financial institutions. Savings should be retained in increments of "months worth of living expenses" and you should have at least a year worth of living expenses before investing in anything but 90 day term deposits.
Investment: After savings are secure, retain a portion as seed money for "trading/investing" business. This should be split, majority (say, 70%) going directly into low risk bonds and notes diversified across govt and corporate sectors.
The minority (say, 30%), along with collected coupons and yield of the majority, can be implemented into higher risk strategies like swing trading and options markets. That way the principal of your "investment" seed money never gets touched.
For me this was the formative experience which
made my attitude towards money, rather than being indifferent to it.
Now I could see,
Income is the result of a happy existence in healthy society, if you are unhealthy or unhappy you will be unproductive and commensurate income will not be a result of your efforts.
Savings are the result of deferred consumption of income, without an income there can be no additions to the savings pool and in all likelihood a net reduction.
Investment is the result of excess savings capacity and has the potential to increase the returns on savings as well as expand a net asset base (through the addition of stock certificates, long term bonds and gold bullion) thereby reducing reliance on income. Plus, it is really fun!
For me this interdependent harmony was only a relatively recent epiphany, but this attitude towards money completely changed my outlook on life!