Our client W is the one who came the farthest to become an effective investor. When he began, he had all the poor investing habits that untrained human nature bestows. He learned three huge lessons along the way. Because his journey has meant so much to his financial security, we are profiling his story in this series of three posts.
W learned that popular but over-priced assets are dangerous in the Tech Wreck of 2000. Many others learned the wrong lesson, to their detriment—they came out believing that ‘the stock market is dangerous.’
After the 2007 market peak in the financial crisis, W learned that fear about short term action did not need to be acted upon—that one could take the long view. He stayed in position to recover, instead of selling out at a bad time. And he learned to keep the long view in mind, instead of getting rattled by temporary declines.
Our work played a large role in these first two lessons. The third one, W learned on his own.
Within a year of retiring, a decision that his employer made for him in the tough times, W realized that all of his pre-retirement fuss and worry about having enough money had been a big waste of energy. W loved having control of his time, for time is what life is made of.
What hit W is that money is not the scarce resource one should be most concerned about. Time is the limiting factor. Living life became so important to W that time well spent became the source of his greatest fulfillment.
Understand that W had done a nice job of planning. He earned and saved enough for financial success. But when he began to focus on life, money became less important. He was able to disassociate from temporary downturns, and not worry about them.
Recently we reviewed our understanding of this long journey with W. He agreed with the notion that the three lessons were crucial to where he ended up. But he also made an interesting observation:
“The great conundrum is that once you stop worrying about money, it is much easier to have more of it.”
W learned along the way, and continues to learn. The lessons he learned were valuable to him, and have been valuable to others. If you would like to talk about your journey, please write or call.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This is a hypothetical situation based on real life examples. Names and circumstances have been changed. To determine which investments or strategies may be appropriate for you, consult your financial advisor prior to investing.