Route 2 FI - Free As A Bird | Not putting new money into the markets is also an active asset allocation decision.
|Jun 5||Public post|| 1|
Hi everybody! Welcome to the 5th edition of my newsletter "Free As A Bird".
The name of the newsletter represents us - we want to be free. Free to choose how we spend our lives.
How often do you check up on your stock investments?
This graph really caught my interest.
I, myself, check my stock investments only once a month to update my portfolio.
You can read about my 12 investing principles here that I picked up from reading books from Buffet, Graham and following the best investors on Twitter.
I would love to not check my portfolio that often, but at the same time I look forward to publish my net worth update every month.
To the point:
If you’re checking performance of the stock market daily, chances are that you’ll see a loss about 50% of the time.
If you check on it just once a year, that chance drops to about 25%.
At seven years, the chance of seeing a loss drops to 1%.
The graph below shows that the probability of experiencing a loss decreases over time.
This tells us that looking at short-term returns when you’re investing for a long time may feel riskier than it actually is, because you’re paying attention to those short-term losses.
Even though you might see immediate losses, staying invested for a longer period of time means that those losses may turn into gains if the market goes up.
Since the market generally tends to move in an upward direction over time, the likelihood you’ll see gains generally increases as time increases.
How long is your investment horizon? 5 years? 10 years? 20 years? More?
How often do you check your portfolio?
Would love to hear from you on this, so please send me an email at post@route2FI.com
Articles I Read This Week That Got Me Thinking
Sometimes the right question at the right time can spark the right answer that changes your life.
One of the most important lessons I’ve learned from reading books, talking to smart people, and having conversations with my mentors is that questions are more important than answers.
I’ll show you three of my favorite questions here:
1) How can I help one person today?
A simple gesture is enough. Give your family member a call. Cheer your friend up. Start by helping the people in your life. And then ask them to pay it forward.
You see, it all starts with questions. Just don’t be surprised if you receive everything you ask for like Maya Angelou once said:
“Ask for what you want and be prepared to get it!”
2) What’s my #1 priority right now? How can I achieve my #1 priority faster?
It’s not about being impatient. It’s about pushing yourself to think of creative ways to get faster results.
My #1 priority right now is reaching FINANCIAL INDEPENDENCE.
What about you?
3) How can I get better at what I do?
When you get better at what you do, you can make a bigger impact and solve bigger problems. That gives you more satisfaction. And also more income.
4) What new things am I learning?
This is the most important thing for me. When I learn, I feel like I’m moving forward. When I’m moving forward, I feel good.
5) What questions am I not asking myself?
There are a lot of things in the universe that we don’t know that we don’t know. So always try to look for the unknown. Keep an open mind.
There are a lot of questions that I’m not asking myself. That’s why I will keep questioning everything — all the time.
That by Kapil Gupta (5 min read).
Beautiful story! A must read article.
“Everyone in the world around him is chasing, chasing, chasing.
Some are chasing jobs, others high positions, others more wealth, others happiness, others religion.
And that is all fine and good. But somewhere within this mass of humanity, by sheer odds alone, there must be Someone who has found “That.”
There must be at least one person who has found the thing that they have been chasing their entire lives.
He comes to the realization that no one, not even the monks who have devoted their lives to austerities, have found the “That”.
He sees that not a single thing will give him what he seeks. That not a single location on the earth holds the answer to his problem.
And suddenly his dissatisfaction vanishes.
He sees as clear as the sun that shines upon him, and he closes his eyes and begins to laugh.
He touches the dirt upon which he sits. He runs his palm along the grass. He feels the weight of his limbs.
And he quietly whispers to himself,
THIS . . . is “That.”
What are you chasing in your life? Most people are slaving for their monthly pay check. But not us, right?
You finally did it.
You got the promotion, secured the raise, finished the project or otherwise leveled up in your career. It’s a wonderful feeling of accomplishment! You should be proud!
But then you come down from that high, and reality starts to sink in: Where do you go from here?
“Arrival fallacy is this illusion that once we make it, once we attain our goal or reach our destination, we will reach lasting happiness”.
The problem is that achievement doesn’t equal happiness — at least not over the long term.
But this isn’t a message that most of us are familiar with. In fact, it’s almost antithetical to the American dream, which tells us that hard work and achievement deliver a happy life.
“The No. 1 predictor of happiness,” he said, is the “quality time we spend with people we care about and who care about us. In other words, relationships.”
You should banish any sentences like this: “I’ll be happy if I can just achieve X.
So wait. Reaching a goal can make us unhappy, but setting goals makes us happy?
Participants engaging in activities that made them happy correlated with overall happiness.
In other words, don’t think, just do the things that make you feel good. If working hard makes you feel good, then great. Dive in.
Just don’t expect getting that promotion or winning that Pulitzer to punch your ticket to bliss.
This Week's Writing
May 2019 Income & Expenses – Savings Rate: 64,2 % ! (3 min read).
Here is my income & expenses for may 2019!
The flow diagram visualizes both my income, expenses & savings in the same figure. What do you think of it?
The currency is as always USD $.
This month’s savings rate was a whopping 64,2 %, which I think is really good.
I mean, my goal this year was a savings rate above 60 %.
But somehow I feel bad because I didn’t reach a 70 % savings rate this month. Weird, right?
How was your month?
Quote that got me thinking
Have you ever thought about the quote below?
Even if you invest in index funds and think you are a passive investor, you’re active when you choose not to invest.
Solution: Invest the same amount every month no matter what.
Have questions, comments or suggestions? I would love to help you.
If you liked this newsletter, I would appreciate that you subscribe or like by tapping the “heart”.
Thanks for reading,
Route 2 FI