FREE NEWSLETTER
I check our investments daily, often more if the market is jumping around. Why do I do that? There is no good reason. I don’t trade, I don’t even use the funds.
If I am honest, I check the accounts only to keep proving to myself that I have been successful meeting my own financial goals. It’s just between me and me.
Is there anything wrong with being proud of what you have accomplished when you started at the bottom with zero in hand? I read the stories posted by many HD readers who have accomplished a great deal or overcome punches in the face and got up swinging. I see nothing wrong with being proud of that.
I grew up in a modest household where money was not guaranteed from week to week, where paycheck to paycheck was very real, where there was no such thing as investments or any talk of going to college.
I didn’t get where I am by myself, I had a few great mentors. We have been blessed with the absence of serious misfortune. Still, both of us do take some credit for not being irresponsible with money. Hence, persistence and time – a long time, worked its magic.
So for those who have overcome adversity of any kind, who have achieved financial security and a comfortable retirement, be proud – even if you have more than your friends and family or have left national measures of income and net worth in the dust. You earned it.
Besides, no matter how well we have done, somebody has done better 🤷🏻♂️
Charles Dickens said it well; “Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness.
Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
Very good, I guess prudent money management is nothing new.
If I have done well, feel lucky!
Looking at my investments I guess I could give myself a pat on the back and my ego would love to take credit, but in fact, many investors follow simple rules. For example:
1. Save.
2. Invest cautiously and with purpose.
3. Use compounding to your advantage.
4. Avoid things you don’t understand.
My portfolio is a bit more complex than simply owning indexes, so I guess I learned a few things to enable stepping outside the box. But I followed the rules above and, as they said in the movie: “The monkey threw the switch.”
I have arrived where I am. Could I have done better?
After experiencing multiple “lost decades”, recessions and a few personal financial hiccups and spending shocks, I would suggest that consistently adhering to a few simple rules was helpful. Yes, I did make certain decisions. For example, in the dark days I suspended saving, but as soon as the budget allowed, I did resume saving.
I would say, one decision I consciously made that did make a significant impact was to work longer than the usual “full retirement age”. That had a profound impact on our retirement, as opposed to retiring early, say at age 62. But luck was a factor. Not everyone has the good health to be able to do this.
Luck, or providence is as much a contributor to success as any investing “skill” I may have applied. Investing isn’t rocket science. If anything, it is a slog, a slow uphill climb of saving and investing and no one knows with certainty the results 40 years hence. The experts tell us what we may expect. That isn’t fact; it is an extrapolation. A guess.
Following investing rules is hoping that the guess will materialize. Every time I buy an index or ETF, it is a guess that the S&P 500, or Ex-U.S. stocks or bonds (U.S. or foreign) will do well. The Callan Periodic Table indicates how mercurial this is.
Today, I do find it difficult to take credit for the outcome of “good” decisions. Memory tends to obscure the bad ones.
Yes, there are traits which are helpful, too. Resiliency comes to mind. But can I take credit for my wiring? It is true that I have done things to make myself a better human being. Investing for a long period of time is akin to achieving muscle memory. After a time, thinking isn’t required and decisions can become automatic. So too, are the results.
Sometimes, it all seems to be a simulation. In recent years, one of the significant decisions I had to make was to unexpectedly tap my Roth-IRA for a significant amount. Automaticity made this difficult. It definitely felt like the wrong thing to do, if for no other reason than a perception the Roth is a very long term, tax-advantaged account. I mentally stepped back and concluded that it was necessary and just did it. There was a temporary decrease in our portfolio. But within two years it had not only recovered, but had gained 10 percent. There were no negative effects, other than the blip to the value of the accounts. Life went on, there was no need for belt-tightening, etc. Looking at the financial reports today, and comparing them to 2021 it seems as if nothing had happened.
I’m happy for my good fortune.
Following those simple rules is beyond many people – even number #1