The Wisdom of a Young Investor: Lessons from Soren Peterson
My notes from my last week's Talking Billions episode.
In the world of investing, experience typically comes with age. But what happens when someone begins their investing journey at seven years old? Soren Peterson, now 20 and co-author of "The Early Bird: The Power of Investing Young," offers a unique perspective that challenges our assumptions about youth and financial wisdom.
The Power of an Early Start
Peterson's journey began when his father gifted him a single share of Nintendo. "Invest in what you know" was the principle behind this choice—Nintendo being a company whose products the young Soren enjoyed. This seemingly small act initiated a profound realization: ordinary people could be part-owners in real businesses.
"The idea as a seven-year-old kid, where probably my main focus at the time was Legos, the fact that I had the potential to be a partner in a large corporation was something that didn't feel real," Peterson explains.
This early exposure to investing concepts has given him an extraordinary runway for compounding. In our conversation, Peterson calculated that someone who invests earnings from summer jobs throughout high school and early college years—without adding another penny—could accumulate a modest retirement fund by age 65 through compounding alone.
Businesses, Not Tickers
Perhaps the most valuable insight from Peterson is his emphasis on business ownership rather than stock trading. When you purchase shares, you're not buying abstract ticker symbols that fluctuate unpredictably; you're acquiring partial ownership in actual businesses.
This mindset shift fundamentally changes how you approach investing. Instead of fretting over daily price movements, you begin evaluating businesses on their competitive advantages, management quality, and long-term growth potential.
"I think the average hundred bagger took at least 19 to 20 years before it became a hundred bagger," Peterson notes, referencing companies whose value multiplied 100-fold. "If you're selling a company even as a long-term investor after five years, you're basically guaranteeing that you're not going to invest in 100 baggers."
The Role of Mentorship and Community
Despite his youth, Peterson emphasizes the value of learning from others. He references influential mentors like Todd Wenning and Tom Gaynor, alongside investment legends Warren Buffett and Charlie Munger, whose Berkshire Hathaway meetings he's attended since age 10.
"Being able to learn from other people's failures is a lot nicer than learning from your own, although your own failures are a lot more vivid," he observes.
This community aspect of investing often goes unacknowledged. Beyond the numbers and analysis, investing connects people with shared values and interests, creating opportunities for meaningful relationships and knowledge exchange.
A Journey Without Destination
For Peterson, success in investing isn't defined by a specific monetary achievement but rather by the ongoing journey. "I would view myself in a lot of ways today as successful. That being said, there's still a lot of things out there that I look forward to doing," he reflects.
This philosophy mirrors his approach to investing—a continuous process of learning, adapting, and growing rather than a race to a predefined endpoint.
As our conversation concludes, one thing becomes clear: wisdom in investing doesn't necessarily correlate with age but with curiosity, discipline, and the willingness to learn from both successes and failures. Soren Peterson embodies these qualities, offering valuable lessons for investors of all ages and experience levels.
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