long term investing

Three Rocks

photo shows river rocks on the ground

I have a yard now that was sadly neglected for years. My ambitions for it are modest. I still cut the grass with a checkbook, but I myself am working in fits and starts to reshape it into something better.

With many trades facing supply disruptions, price spikes, and labor shortages, it seems prudent to defer some projects until things loosen up. So… I have not called in the landscaping company yet.

In the meantime, there is a space that would benefit from a layer of rock. On my daily walk, I am picking one up and bringing it home. Three days into this plan, there are three rocks. They weigh about a pound all together.

The internet suggests I might need a ton of rock for this area—2,000 pounds. If I maintain the current rate of rock accumulation for, say, 300 days per year, it would take me 20 years to get a ton of rock. Twenty years to cover what I need.

I’m struck by three things: how insignificant three rocks seem against the total need, how simple arithmetic shows it could be accomplished over time, and how similar this all is to the challenge of saving money for retirement.

The first month’s deposit in a long-term investing plan might be a tiny fraction of 1% of the eventual sum accumulated over 20 or 30 years. It might feel like three rocks compared to a whole ton!

But simple arithmetic provides some hope.

Clients, if you would like to talk about your own accumulation plans—or start one with a younger relative in mind—please email us or call.


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Living on Purpose

photo shows a highway stretching out into a blue sky

Some say the young believe themselves immortal. When our whole lives seem to be ahead of us, it feels like there is plenty of time to do whatever we intend to do.

But we know the mortality rate is 100% in the long run. More than 3 million people died last year in the United States, about 1 person in 100.

And in our experience, many people coming to grips with their own mortality come to believe that life is short—no matter their age.

If it’s true, then how do you fill in the blank? “Life is short, I better ___________.”

In the prior chapter of my life, we filled in the blank with “we better have a little fun every day.” That’s still appropriate in this chapter, but I ponder what else fits in the blank these days.

Interestingly, some things are so basic to our natures they go without saying. A person who is consistently kind and empathetic to others might not think to fill in the blank with “be kind” because it is assumed. So thinking about how you might fill in the blank is another way to be intentional about how you live, to do things on purpose.

Maybe that’s what all this is about. By the end of the road, I’d like to know that I meant the things I did and did the things I meant to.

How about you?

Clients, life is short. How can we serve you—and help you connect your money with your one precious life? Call or email, anytime.


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The Good-Enough Place

photo shows two rocks balancing in opposition on other rocks on a beach

Clients, in our latest round of portfolio reviews, we’ve been getting into the nitty-gritty with many of you. There are changes we’re suggesting, but we’re also doing a fair amount of listening.

Our recent research endeavor into ESG—those investments that meet particular criteria for addressing environmental, social, and (corporate) governance issues—has deepened many of our conversations.

We’ve written about how ESG investing is harmonious with our focus on the long term, and whatever you call these styles, we’re interested: we want our practices to be more sustainable, more consciously capitalist, more socially responsible… You get the picture.

So what are we learning in our efforts to be more intentional? Well, that doing good may mean taking the time to define what “good” is. Every human endeavor comes bearing flaws, but how do we minimize harm and maximize long-lasting good?

The hit show The Good Place keeps coming to mind in these conversations. It’s an exploration of the afterlife, asking some hilarious questions about the meaning of life’s choices.

When things get dicey even for those who are “designing” the afterlife, Ted Danson’s character puts it this way: “Life now is so complicated, it’s impossible for anyone to be good enough… these days just buying a tomato at a grocery store means that you are unwittingly supporting toxic pesticides, exploiting labor, contributing to global warming. Humans think that they’re making one choice, but they’re actually making dozens of choices they don’t even know they’re making.”

Yikes, right? But just like the characters in this show, we’re trying to come at this with a lighter, more human approach. Given the costs of our choices, which do enough good to counter the cost? Which costs can we live with?

Big questions, important topics. Clients—let’s keep talking. When you want to know what this might mean for your portfolio, write or call.

(For a little levity, Maya Rudolph’s character replies to the speech above: “That’s your big revelation? That life is complicated? That’s not a revelation. That’s a divorced woman’s throw pillow.” The show is worth a watch.)


Environmental Social Governance (ESG) investing has certain risks based on the fact that the criteria excludes securities of certain issuers for non-financial reasons and, therefore, investors may forgo some market opportunities and the universe of investments available will be smaller.


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Your Safety Net Is Not a Hammock

photo shows a safety net in midair

The advancement of technology has helped humans perform more tasks more safely.

Backup cameras and drift warning systems help curb preventable accidents in our vehicles. Even in our pastimes, technology can monitor more risks and dangers than ever. Big-wave surfers take on, well, bigger waves, prepared with more data about the conditions than ever before… not to mention a jet-ski nearby, ready to help anyone who crashes.

Such monitoring technology may allow us to take on more risk, but this doesn’t mean we ought to. Specifically, this tech becomes dangerous when we let it take over and do our thinking for us too.

Some providers offer tech tools to help “measure” risk tolerance. The tools are, in theory, designed to increase transparency. If we know more about the dangers present, shouldn’t we be able to make better decisions?

For some investors and clients, it’s perfectly comfortable to use such scores to determine the “appropriate” investments. The trouble is that then the tech tool is doing the interpreting, moving from observation to decision.

That middle part—the thinking, the choosing, the deliberation—that’s where we like to focus our energy in this shop.

Many tools may seem like safety nets, keeping us from ever falling too hard, but they should not replace the process.

You may remember The Flying Wallendas, a family that for generations has performed high-wire stunts (one of them crossed the Grand Canyon on live television a few years ago). The family avoids nets when they can.

Why?

The net may make you feel better about the risks involved, but it’s counterproductive—and dangerous—if it leads you to behave with less awareness, intention, and energy.

You must behave as if the risks are always present… And carry on, making the best decisions possible.

Clients, wondering about nets, risk, and more? Let’s chat: call or write anytime.


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Raphael, Donatello, da Vinci… Markelangelo?

photo shows paint jars and brushes on a painted surface

When you mow a lawn, or paint a wall, or run a race, every bit of effort moves you closer to the end. There is only progress. You see tangible, visible results: grass clippings pile up, or the paint covers more of the wall, or the finish line gets closer. 

Long-term investing is different. On nearly half of all days, the broad market averages go backward. This has also happened over whole years, about one out of four historically.  

When we paint a wall, there are no forces moving with us and wiping away one stroke of paint for every four we make! 

So in this respect, investing is more like creative work. An artist who paints might have to add layers over their earlier work to create the effect they want. They might even use a palette knife to—yep—remove paint and clear a space for something different. 

Maybe investing and creating both require a long view, guided by a vision of what might be. Both pursuits require the patience to work at it even when results come only in fits and starts. No guarantees in either arena, but we don’t know which ideas will pan out without the pursuit.

I’m no artist, but that sure is what investing feels like. 

A lap with the mower provides its own immediate feedback. When we make an investment, the early results could be positive or negative, and it may feel like a coin toss. Only as the months and years roll by do we see the fruits of our work. Some backward movement, sure, but we expect to see progress across the process. 

We cannot do this work for just anyone. It takes people who have perspective, the ability to take that long view, to have faith that we are on the right track even when temporary setbacks engulf us.

Fortunately, here at 228 Main we have the best clients in the world. We are grateful for you. 

If you would like to talk about progress toward your goals (or anything else), please email us or call. 


All investing includes risk including loss of principal.


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Raphael, Donatello, da Vinci… Markelangelo? 228Main.com Presents: The Best of Leibman Financial Services

This text is available at https://228main.com/.