Investing is as “Simple as That”
Investing is as “simple as that.” That is:
- Buy stocks when you have the money
- The investing road is worth traveling
- Make the Next Decade the best of your life
Buy stocks when you have the money. It is as simple as that.
Buy through the good times and primarily through the bad. It is just what you do when you earn a steady income stream during your life. When you have the money to do so, buy stocks.
The investing road is worth traveling. It is as simple as that.
We all make mistakes, and a wrong turn here and there isn’t the world’s end. How can you stick with it when you have made a wrong turn in the investing road?
Make the Next Decade the best of your life. You simply have no other alternative.
It’s as simple as that. Let’s start with buying stocks when you have the money.
Buying Stocks is as Simple as That
You buy stocks when you have the money because you have complete trust or confidence in someone or something. Think about trust, belief, confidence, conviction, credence, or reliance.
Why do you need to have complete trust or confidence to invest? Because we all know the end is coming!
At some point, after all, the sun will explode, and our universe will be recycled. That’s not the end I’m talking about.
This is the actual end that destiny requires: the collapse of the US economy. After all, eventually, all societies will collapse. However, I have faith that this will not happen in my lifetime. Thus I invest in the economy of the US and, indeed, the entire world.
But more importantly, we know recessions and depressions are just a matter of time. They are a normal part of market cycles.
Buying stocks when you have the money is necessary for investing because, at some point, you will feel like you can’t take anymore. You will want to quit! The market is so bad that I will never retire or meet my income needs if the market keeps crapping out on me. Some felt this way in the 2000 dot-com bust; many more in the great financial crisis of 2008. Some sold low and have not come back.
Buy because the market will come back. After all, in the US, at least, it always has.
Let’s look at buying when you have the money and see how it likens to history, science, and data.
The Wrong Kind of Buying
Don’t have faith in your stock picker, hot tipper, or anyone who will predict the future. That is the wrong kind of investing.
If you own your portfolio because someone told you you should, it might be time to reach out for a new thesis.
After all, no one can give you complete trust and confidence. You have to believe it yourself at some point.
Buying vs. History
Economic growth is the power that drives the US economy and, thus, the stock market. Therefore, the stock market is worth more because our economy is growing.
Look at the history of the US stock market and note it goes up and to the right on a log graph of returns.
You can understand market history and know that the US has always been a safe place to stay invested despite all the horrific events of the past centuries. Moreover, history teaches that, at least over the decades, broad-based low-cost total market ETFs will grow your money safely and effectively above inflation.
Buy when you have the money because this will continue. After all, some look at the world we live in and say, “this time, it is different.” The US is an old economy, and we will lose our most favored status.
Why will the US economy remain strong? Creative destruction.
Railroads ruled the past. After that, many other industries. Telecom. Oil. GE. Oh my, the list of companies and entire sectors creatively destroyed. This will continue, as will the growth of our economy.
After all, think about “peak oil,” “global food shortages,” “global warming crisis,” and other problems that weren’t. As with commodities (and the “cure for high prices is high prices”), the cure for these intractable problems is unleashing the free-market economy on them. We will find efficiencies, and you gotta have faith that “I will survive.”
History teaches us that the safe place for long-term investments is the global economy and free markets. What is the alternative?
Summary- The Investing Road is Worth Traveling
The investing road is worth traveling.
The path of the road? First, start where you are before enlightenment. Before simple, broadly diversified, and inexpensive ETFs to buy and hold forever in the real world.
Next, go through the complexity of a DIY accumulation journey. We all have stories to tell here! What shiny object caught your eye?
Finally, return home only to realize that you have to face de-accumulation back in the real world!
The Investing Road faces all DIY investors. You are the star. It is as simple as that. Make some mistakes, so the road has twists and turns. We all make mistakes. Make them small and frequent, and learn the lessons.
The DIY investing road is long and full of colorful characters, but it is a road nonetheless worth traveling.
It is as Simple as Making the Next Decade the Best of Your Life
It is as simple as making the next decade the best of your life.
What is the alternative?
A hero of mine who traveled a non-investing road is Jared Diamond. He had twins at the age of 49 (I had mine at 45); he also says his 70s was his best decade of life.
Moreover, after an entire scientific career studying the gallbladder (seriously), he switched to writing popular books in his 50’s. All of his great books… have been part of a second (or third!) act.
What do we know about second acts, and how can you make this current decade—the best decade yet? Simply this: what is the alternative?
His 70’s Was His Best Decade
I know Jared from reading his books.
Guns, Germs, and Steel is truly a paradigm-shifting book. It describes why, through luck of geography, certain populations have come or gone.
Next, Collapse is also an important book about why civilizations fail. Yup, they use up all their recourses and wreck their environment.
Sounds almost prescient? Not really, since a concern for his newborn boys (when he was 49) spurred his writing career. The climate challenge and resource depletion motivated him beyond gallbladders to study the end of the modern world due to environmental collapse.
He remains “cautiously optimistic” about the future. “Why have children if you are not optimistic?”
He gives us a 51% chance of pulling through our current challenges.
While he is a great and famous author, the amazing thing to note is that he started writing in his 50s. And his heyday, in his 70’s, was the best decade of his life.
How can we make the current decade we are in the best decade of our life, regardless of our age?
How to Make This the Best Decade of Your Life
So, how did Jared make his 70’s the best decade of his life? Now (at age 84), he wants to continue his work for another decade or two.
He credits his youth and curiosity. His childhood was full of interests he didn’t pursue until late in life. Geography. Languages. Ecology. What were you interested in as a child that you can call on?
And he knew he had to work for something greater than himself. He is trying to save the world for his twin sons. We all must find work for something greater.
Find new passions and challenges!
Reflections on Youth
Jared knew he would be a scientist, so he took Greek instead of science in high school. In college, he took non-science classes because he knew he was going to spend the rest of his life doing science again. What non-traditional courses did you take that aren’t part of your career?
His interests in his youth were multitudinous; he spent 40 years on one interest before moving on to others. He was a true polymath because he had interests, curiosity, and time.
It is fascinating to understand that he studied the gallbladder because it was the simplest organ he could think of. He studied gallbladders in his own lab at UCLA before closing it down and moving to the geography department. Meanwhile, he became a leading expert in ornithology because it was interesting.
Then he started writing.
How to Make This Decade Your Best Decade Ever
So how can you make this decade your best decade ever?
I described the happiness U-shaped curve in my bit about Investing During Mid-Life.
Happiness, in general, decreases from your teens until about 40 and then increases. That’s right! On average, you are going to be happier the older you get! Why not make this decade your best decade ever?
I’m not great on how-to lists, but using Jared as a reference. How to make this decade your best decade yet:
- Explore what made you curious in your youth
- What classes came easiest to you in high school that you didn’t pursue as a career?
- What electives did you take in college?
- Leave your career early to pursue your passion
- Use the above link and discover Ikigai
- Do something because it pleases you but helps others
- Find your passion in Retirement
Conclusion: My Best Decade Yet
Jared left birds and gallbladders behind to explore topics that span all of human knowledge. He is a fantastic synthesizer and a polymath genius. None of us will be able to do what Jared did, but he provides inspiration that you can make your 70s your best decade yet.
Jared Diamond says, “the atmosphere is mixed just as microbes are mixed.” The implication is that the environmental crisis we all face is a larger issue than the covid one, and one we must figure out together as a world.
He had kids at the age of 49, and it spurred him to change his life, to remember his youth. Two decades later, he was having the best decade of his life. Yet he admits that he cannot use the remote control for his TV because technology.
What will you learn that will make this next decade the best decade of your life?