Investing is as “Simple as That”

Investing: Simple as That

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?


Buying vs. Science

Science can only prove a negative.

This is a simple way to view science, that you disprove your null hypothesis.

In investing, the null hypothesis is that low cost broadly diversified ETFs are the single best way to invest simply and effectively. Prove me wrong!

Can you reliably show that active management beats indexing? Nope. There have been outliers, for sure, as there always are. But prove that you know that person over the next 20 years.

Can you reliably show that stock picking is a good idea? Options? Hedge funds? Venture investing? Real Estate? Ok, skip real estate for now.

Long-term investing takes faith because there is no scientific data for the next 20 years. For the future, there are only probability distributions and likely outcomes. If there is no proof, there is only faith.

The Power Laws predict that humans cannot understand technological growth through linear models.

Take Moore’s Law or the genome project. First, the US economy and thus the stock market will grow. Then, probabilistically, the way to invest is via low cost and broad diversification. These are the only free lunches in investing.

Remember that science uses statistical significance to “prove” a point. There is always a tail outside of that P-value that will prove you wrong. The 100-year flood. Any other tail risks come to mind?

By getting market returns, you will beat most people most of the time.


Buying vs. Data

If it were as easy as data, everyone would do it and become rich.

At one extreme, the efficient market hypothesis posits that all information is equally known by everyone instantaneously.

On the other hand, there is the behavioral finance theory that we cannot control our human biases.

The truth is somewhere in between the middle.

You, individual investor, will never have all the data you need to make choices. Yet, all you need is to own a slice of everything, and you will be fine.

Patient investing requires a little faith that even if you aren’t the most intelligent person in the room (or the one with the most data), you will do better than most as long as you are well-behaved.

And those who read this blog are likely better off than 90% of those in the world.



If you are better off than 90% of people, you can rely on 90% of people going broke before you do. But that is still an end-times scenario. Do you want to live in a world with 90% of people on breadlines?

We cannot rely on history, science, or data. Instead, buy stocks when you have the money. The world will keep chugging along, and you can benefit from owning a small slice of everything.

There is no certainty in life aside from that, eventually, you won’t need your investments anymore. But meanwhile, have an investment thesis and stick to it.

As I like to say, you buy the whole world economy when you have the money, and you sell it when you need the money. That is an easy decision to avoid the problems with an investor’s biggest flaw: thinking. It is not over-thinking that is even the problem; it is thinking. This is the main idea behind behavioral economics.

Decide that this is the best course of action: buy when you have money, sell when you need cash. And then don’t think. Buy.


The Investing Road is Simple as That

The investing road is simple as that. Or, as a DIY investor, it can feel like a hero’s journey!

The opposite of simple is the so-called “monomyth” (another name for the hero’s journey). It is often integral to the plot of great sagas.

The journey stages include leaving the real world to go on a quest, facing great challenges, and returning victorious back to regular life.

How is that for simple?

Let’s look at you before discovering DIY investing and then plot out your crisis and victorious return!


Investing Road in Three Acts

There are three acts to the monomyth. One myth in three acts, or maybe it is three-for-one.


In the monomyth, the hero is called to action. Initially, she refuses to leave the “ordinary world” (refusal of the call) but does so after meeting a mentor.

On the investing road, the ordinary world is one where we watch the “news” and think that active investing provides superior returns to passive before we know that expense ratios matter.

The call to action is the realization that less is more—that once you get set up correctly, there is no need to fiddle with your portfolio.

She refuses; how can it be that complicated is not better?—but then meets a mentor (Bogle, Merriman, Ferri, Collins, Bernstein, Dahle, who is your mentor?).

She follows the call and departs the ordinary insurance world, stock picking, timing, and broker dealing.


The hero enters the “special world,” where she goes through a series of tasks before encountering the main impediment.

This special world is one of products and complexity on the investing road. Though continuously tempted by fancy products, syndications, and fear and greed, eventually, she learns that doing nothing is the correct answer 98% of the time.

This is the “Evolution of an Index Investor.” You discover simple, then try out different complexities, only to return to simple again.


Now back in the regular world again, the hero realizes how she has changed.


That’s the basic outline. Simple. Now, let’s dive deeper into the many steps of the investing road. Trust me; it is worth staying on the investing road!


The Steps of the Investing Road

All 13 (or 17) steps of the hero’s journey are now modified for the investing road.

investing is simple

The 13 Steps of the Investing Road

The Ordinary World

First, we begin in the ordinary world where we do not learn personal finance at school or home. Naturally, we think that wall street and the big banks/financial institutions will try to do the best they can for us because that is the standard for other professionals (fiduciary care in medicine, law, accounting, etc.). The call to adventure is realizing that the financial industry does not have our best interests at heart.

They do not have our best interests at heart; their perverse incentives promulgate bad advice more often than not.

“No, that cannot be possible. My guy (or gal) is so nice! They seem to care about me.” This is the refusal of the call to manifest DIY investing. “I can’t do it on my own; after all, volatility is so scary!”

Next, you meet your mentor. Personally, for me, it was the FIRE movement. VTSAX and Chill.

What was revolutionary: it was normal and expected for the market to go down.

Once you understand that stocks will go down 10-40% at irregular intervals and that is not a reason to fear, you are ready to leave the ordinary world of bad advice. After all, stock market volatility is why there is an equity premium (where those who fear to transfer their money to those who don’t sell low and lock in losses).

Who was your mentor? How did you accept the call to DIY invest? What stopped you, and what was your final breakthrough?


Crossing the Threshold

Next, you cross the threshold to the special world where you face this challenge: you need to educate yourself! Your quest: whom can you trust for advice?

There are many trails along the way, and it is not uncommon to fail. How do you fail in your early days of DIY investing? Options, memes, NFTs, crypto, day trading, and, in general, what can be called speculating instead of investing. Investing means having a long-term positive expected return (as you do in a low-cost, broadly diversified ETF held forever). Speculating involves moving in and out of whatever is new and selling to a “greater fool.”

You learn new ideas and products that challenge you with greater complexity during this journey—the siren song to squeeze out better returns. And you meet more mentors who implore simplicity.

Moreover, you begin to learn behavioral finance and realize that YOU suffer from recency bias, overconfidence, and the other behavioral biases that plague all other investors. You are tempted by fame or wealth to speculate and take risks when you don’t need to with money you don’t have.

After this great challenge… facing your shadow self in the abyss… atonement is next. The tide has turned, and you understand your goals: that money is merely a tool.

You spend at the intersection of experience and loved ones. Beyond investing, you find the purpose for your money. Hard Stop.


Act Two is Always Too Long

Time for a bathroom break in our DIY Investing Hero’s Journey. While you are there, reflect that you discover the purpose of investing, the goal of money, which gets you moving back to the ordinary world. At the peak of despair, there must be the knowledge that money means nothing without purpose. Because…

Apotheosis is next. I had to look that one up. It means culmination or climax, the highest point in your development. Though you are now armed with purpose and skills, your most difficult challenge still awaits the ultimate boon.

You reach your goal of the perfect portfolio and realize that you only need to look at it once a year. There is nothing left to do after all the education and experience but let time work its magic. After all your hard work… what a letdown that there is nothing left to do. Let time pass and stop thinking about it.

No! There must be some more complexity to explore! An annuity?

Permanent life insurance?

Structured products as a hedge?

Longevity Insurance?

Come on, man, it can’t be that easy!

It is not. You now learn that accumulation is easy, but de-accumulation awaits around the corner.


Back to the Ordinary World

Once you master accumulation (primarily by getting things set up right and then doing nothing), you realize that, at least to some degree, you need to tear down what you have built. Back to the ordinary world!

Complexity awaits anew! Retirement income planning is full of new problems that must be solved by wall street, insurance, and financial advice! It has to be hard, doesn’t it? Someone has to help! Someone?

No! Next: “the magic flight: the hero must escape with the object of his quest, evading those who would reclaim it.” Retirement is one last chance for the financial industry to claw back assets.

We need a guide or a mentor again, one who makes retirement planning as simple as possible, but not any simpler than that. Any idea who that might be?

And finally…

The closing step: master of the two worlds. Simple as possible; complex when needed.

Our DIY investing hero now balances who she was before the journey and the spiritual enlightenment gained along the path.

Now, she is at peace with herself. Complexity handled; the retirement income plan is in place.


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?

Investing is as “Simple as That”

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?




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