An Open Letter to My Loved Ones: I’m a Scrooge & I Invest Every Penny I Earn
Difficult conversation(s) on money, investing, and economics we must have
Dears,
I know you are unhappy with me.
That I am a Scrooge. That I am miserly. That… I don’t spend money on the good stuff in life, like cars, travel, a fanciful shelter, and Michelin 2-star restaurants.
Yes, I don’t.
I don’t… because these things make zero sense to me. I march to a different drum beat.
That drum beat, simply put, is investing.
I have devoted my life as a student of investing through study and active practitionership and will continue to do so.
But let me explain why I do what I do.
Money Talks & Thoughts Are Necessary. It Enriches Our Mind.
There is no way we can achieve…
- Financial independence,
- Financial freedom,
- A life we seek,
… without money or thinking about money. It is impossible.
Our thoughts drive our behavior. Our hands respond accordingly. If we want to be the best runner on the red track, we must,
- Believe that we can, one day, cross the line first,
- Act on that belief and train accordingly,
- Take failures as practice,
- And repeat ad infinitum.
This mode of thinking is accurately captured in Ray Dalio’s Principles.
In short,
- We start by thinking about it,
- We act on our thoughts,
- We stumble,
- We reflect,
- We get better,
- We set [slightly] bigger goals,
- And the cycle repeats itself, allowing us to spiral upwards.
This mode of thinking applies to track runners, corporate folks who aspire to reach the top of their organization, and all of us seeking a better life.
- A life where our money concerns are well taken care of.
- A life where money grows on trees.
- A life where we slog less for money.
This is what I am obsessed about.
A better life backed by financial knowledge, stability, and smart investments.
The Big Picture: Why Investing is No Longer Optional
Firstly, working hard for our keep is no longer sufficient to keep ourselves going.
We exchange our labor, sweat, and tears for an honest living. There is nothing wrong with it, per se. My beef is with the game itself.
This game no longer works when we are planning for,
- A dream retirement we seek,
- Exiting the rat race we hate,
- Paying for things we want.
For me to better explain this, we must look at facts. Or reality. Or economic Truths.
Yes, Truth. With a capital ‘T’.
Let me start with currencies.
That is one thing we exchange our efforts for.
This is the story of the famous currency we [all] know in a diagram.
In a nutshell, what we can buy with our hard-earned money has diminished over time. Will it continue to lose value?
Maybe.
After all, we have been losing money on our money since 1913.
That is 100+ years of data we can read and rely on.
Thus, having our financial stability and future retirement on the back of pure cash holdings is a losing game. Maybe we won’t feel the bite of inflation immediately today. Or tomorrow.
It will be… with time. A downtrend. A sustainable down trend.
Therefore, we must act to preserve what we have.
Investing is my preferred choice of doing so.
At this point, we must identify 2 things.
- What has been steadily going down?
- What has been steadily going up?
The Big Picture: Investing Over Years and Years
I will focus on and share what I know.
This is Gold, measured in USD, since 1971
It is on the rise. Steadily.
And now, this is the S&P 500, measured in USD, since 1971.
It is on the rise. Steadily.
What would you do? What would you accumulate? The answer, to me, is obvious.
- Buy things [assets] that rise in value over time.
- Reduce our holdings on things [assets] that drop in value over time.
Sounds simple? Yes.
Is it easy? No.
Here’s why.
We find it [really] difficult to invest our money. It requires us to part with our hard-earned money with no clear idea whether we will get it back, plus some more, or lose it all.
Do I always make money?
No, I don’t.
But.
We must give ourselves a chance to understand the market. I do. We can part ways with $100 to test the waters.
This is the reason I’m firing all cylinders in my investing journey.
- I keep putting money into what I know.
- I put small amounts of money into what I am interested in and watch how it does.
This is how I learned the money and investing game.
This is why I never had [spare] money for anything else.
Haha!
And by the way, I enjoy what I do. Really.
I am not missing out on the good things in life. AND~DD I’m happy.
So, yes, my dears.
Call me Scrooge.
I am not listening.
The Real Question: What Should We Invest In?
This is, to me, the toughest question to answer.
It is like heading to the doctor’s, asking for medication without seeking consultation on the symptoms or the cause.
But I get it also.
- You are new to the investment game and don’t know what to do.
- Like Mum, you don’t want to think about the financial markets during waking hours.
- Like Dad, you don’t want to get too carried away by the daily price actions.
I got your back.
But don’t hear it from me.
Take a page from Jordan Belfort, the Wolf of Wall Street.
This is what he said, on tape, when he was asked for investment tips.
“Just buy a low-cost index fund or ETF on the S&P 500, don’t do anything, and hold the darn thing for 30 years. Nothing beats the index. It has been mathematically proven to be so.”
The Wolf has spoken.
The Close
Must we invest our money?
To me, that answer is yes. A big one.
There is no other way, especially if we want the best things in life.
And I don’t mean a shiny car or a Michelin 2-star restaurant dinner.
I mean,
- A dream retirement we seek,
- An escape route from the cubicle jail,
- Doing whatever we want, whenever we want, without worrying about money.
And, oh.
Before I forget.
We must learn to invest because we act to prevent our money from losing money. Is that a worthy cause for a lifetime study?
I think so.
- And so I am obsessed with my study.
- And that explains why I am always broke.
Cheers, my dears.
From,
Scrooge
This article is inspired by:
- Neha Sonney, Speaker — She left a comment on my recent article.
- Matt | Financial Imagineer, Denis Gorbunov & Sarina Chiu — A topic that spiraled to a life of its own in our group chat.
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Oh, oh, you can buy me a cup of black too! Thank you!
Disclaimer # 1
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.
Disclosure
I hold physical Gold bullion and an Index-tracking S&P500 Exchange Traded Fund (ETF). There are no affiliate links in this article.
Note: These assets do not represent my entire investment portfolio.