Welcome to the 20th edition of my newsletter "Free As A Bird".
The Perfect Time to Invest
Like everyone, I sometimes struggle with waiting for the perfect time.
It’s no different with investing. If you’ve never invested before it’s hard getting started. It’s even harder if the market’s been steadily rising. Almost impossible when everyone is predicting a recession.
So what most people do is wait for the market to drop. They pick some random percentage: “Okay, when the market falls 10% then I’ll invest.”
Buy low, sell high, right?
It doesn’t matter what you tell yourself you’re going to do, because saying you’ll invest when the market drops is much different than actually investing when the market drops.
I know, because I’ve watched people play this little game. They tell themselves they’ll “get in” after the market falls just a little bit, and then just a little bit more, and then just a little bit more.
Always waiting for the perfect time, instead of just doing the thing.
This behavior often hurts investors. Dr. Jeremy Siegel, professor at Wharton, thinks the average Vanguard index fund owner gets just 50% of the published return.
If a fund is up 20%, investors will be up 10%.
Why? In reality, people aren’t buying low and selling high.
They buy high and sell low.
Like most things in life, investing is a lot like creating art. It’s easy to get stuck overthinking everything and trying to avoid mistakes and waiting for the perfect time.
What you need to do is just do the thing, and keep doing it.
My portfolio is at an all time high
I normally don’t check stock more often than once a month, but because I had some extra money to buy stocks for, I had to log into my account.
My index funds are now worth: $194,505 (1,755,807 NOK)
This year alone my portfolio is up 22,11% = $26,484 (239,075 NOK)
How is your portfolio doing?
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Quote that got me thinking
How much money is enough for you to never worry again?
Shall I quit working completely or not?
The way I see it I got 3 options:
A) Quit my job when I reach a net worth of $600K. I assume this to be in about 4 years, when I’m 36 years old.
B) Start to work less now. I could easily go from 5 work days/week to 2 work days/week and still live my life as I do today. The only disadvantage is that I barely can invest at all when the income is lower.
C) Continue to work for a lot longer and build serious wealth. If I continue on this path for the next 20 years my portfolio will be worth $4,238,639.
But do I need it?
As one of my favorite Twitter-accounts stated:
Have questions, comments or suggestions? I would love to help you.
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Thanks for reading,
Route 2 FI