I have been writing and editing money articles—personal finance and investing—since 2010. So I’m coming up on 13 years of experience in financial media.
Out of everything I’ve learned, here’s the most important thing. By far.
As a society, we settle on conventional strategies.
If they don’t work for us, we feel shame and double down on the failing strategy.
We refuse to admit when the things every money article says we should do simply aren’t working for us.
Blame on it on pride. The individualistic spirit of America. Or this sense of embarassment many of us feel when we’re different from the crowd. This feeling that we’re less than if and when we experience money-related problems that we won’t be able to solve by sticking to convention.
It’s this phenomenom (?) that led to this newsletter about Never Retiring.
For years, we see the same absymal data on the amount of money people have saved for retirement—
Yet, we rarely see advice that goes beyond save more so you can catch up. So, individuals internalize a collective problem—a national epidemic, really—and double down on a strategy that simply will not work for them.
Those of us who embrace the reality that we’ll Never Retire—traditionally—refuse to keep doing the same thing while expecting a different result. We change course. Maybe even drastically. We put living evenly across the lifespan at the forefront of our personal financial plans now and into and beyond relative old age.
In this newsletter, we focus on exactly how to think about and do this. It’s one benefit of being a paid subscriber. You get this focus on strategy. Plus, you help support my work, which I appreciate.
One thing we don’t talk about much is investing. While we hit on it from time to time, it’s not part of my Never Retire strategy.
Every time I go back to investing, the same thing happens.
In fact, it happened—again—last week.
Here’s my story. One I think more people can relate to than they would like to admit.
Bottom line first—
I’m perfectly happy watching a cash balance in a savings account grow.
I have next to zero desire to spend it. I organize my spending and savings plans to make this so.
However, I can’t stand to see my money invested in stocks. When it is, I have this irresistible urge to get it out. To put it back into savings.
Just last month, I started buying dividend stocks. Again.
Just last week, sitting on a solid 12% gain, I sold everything, transferring the proceeds to savings.
Why did I do this?
I didn’t need the money. I wasn’t losing money. I was making it.
I wish I had an answer to this question.
I used to wish for an answer so I could figure out how to stay invested. I no longer care about this. I want to know merely to learn more about the psychological underpinnings that motivate behavior and decisions like this.
I have done what I describe here dozens of times over the years.
I know—in my head and on paper—a lot about investing. But it’s—obviously—just something I’m not cut out for.
At times, it has had a lot—or everything—to do with cash security.
But not this time.
Instead, maybe I look at it this way.
Why go through the trouble of investing relatively small dollar amounts—hundreds or thousands—when the return I can reasonably expect to acheive on these investments doesn’t feel like it’s worth the time or stress? And I’m definitely experiencing stress if I keep looking at my portfolio and constantly consider liqudating it.
I used to answer this question with because it’s what I’m supposed to be doing. Investing is smart.
Then I realized that, while this might be so for other people, it isn’t for me.
For one reason or another, I’m just better off in cash, organizing it, alongside work, to position myself to comfortably meet my modest needs and wants today and for the duration.
Sometimes there doesn’t have to be an answer. You can just go with the feeling. Don’t fight it. Go with it. Even if every other money article you read makes you feel like there’s something wrong with you.
On investing. On retirement. On spending. On whatever piece of conventional money advice that just doesn’t work for you. On the ones you keep going back to—like I just did with buying stocks—even though you know where you’ll end up.
Even if I am an idiot for not investing, I’m a bigger one for going through the motions instead of adopting an alternative plan I actually have the psychological and practical ability to follow through on.
Echo Park Lake, Los Angeles
I invest, but my 401k is primarily Index Funds. I find that investing in individual stocks results in my looking at them far too often for my own good.
To your point though, I also have a savings account with what most advisors tell me is far too much cash "just sitting there." It's about 1 years worth of living expenses. What they don't understand-or have been conditioned to ignore- is that it gives me incredible peace of mind.
I work for an airline, and aviation can be incredibly volatile. Knowing that I'll land on my feet represents a massive ROI you won't find on the Big Board.
There are two ways to build generational wealth 1. Start a business and put in sweat equity to grow it. 2. Invest in the stock market. Take some risks with your capital with the goal of letting it multiply over time. Neither one is suitable for everyone. People have their preferences and their risk tolerance levels. E.g. I would never do #1 because I don’t want to or like to. I prefer to invest.
Rocco - the cool thing is that you know what you like and dont like. You know what you can stomach and what you prefer to stay away from. Many people dont know their personal finance compatibilities and end up chasing hopes and dreams based on hearsay and peer pressure.
Cheers!