Having dinner last night, my father-in-law Dick Young asked, “Survival Guy, what’s investing mistake #1?”
“I don’t know yet,” I said.
“Let me tell you about living off your portfolio. It’s hard,” he said. “I’ve been writing about this my entire adult life. I didn’t expect how tough it would be to generate income. It’s expensive staying at Le Bristol, so you better figure out a way to make it work. I’m just getting comfortable. How’s your dinner?”
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Part of my inspiration for this series came from reading past issues of Richard C. Young’s Intelligence Report. Each issue was packed with information, often way ahead of its time and always sensible. This issue was from 1996. Here are a few subheads: “Fidelity Harnesses Artificial Intelligence,” “Fuzzy Logic,” “10-Year Zeros,” “Preferreds,” “All Weather Industries,” and my favorite, “Ten Mistakes to Avoid.”
“Last month,” Dick wrote, “I promised you my list of 10 scary and costly blunders many investors make. My son, Matt, who works in the business with me, and I came up with this list of whoppers. Here are 10 especially egregious blunders and how you can avoid each.”
A lot of you avoided them. Nice.
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In my conversations with you, I ask how you made your money. And you tell me what you did for work. But I know it’s what you did without that made it happen. You invested in yourself. You, my highly successful, fairly wealthy reader, did it. And, on reflection, you have no idea how you did it. You just did, and you don’t want to have to do it again.
The skills you harnessed to make money have nothing to do with the skills necessary for keeping it and growing it. It takes a different skill set. And when you’re emotionally attached to your money, you get tight. You feel pressure to do stuff. It’s hard just standing there and doing nothing. Because it is you who remembers making that $100 bucks years ago that’s worth many multiples more today.
Which leads me to my investing mistakes to avoid #1: Y-O-U. You can lose sight of what got you here. You can get caught up in the markets, or a couple of stocks, and begin thinking it’s easy. Then, out of nowhere, the black swan swoops in. Then “You” need to have a difficult talk about that trip, or the boat, or that new car.
“How’s our account doing?” your spouse asks. “Will we have enough for the trip to Europe?”
Action Line: I believe in you. I want you to succeed. I want you to invest with the peace of mind and comfort you deserve. It isn’t easy. It’s hard being patient, compounding money. Investing isn’t supposed to be fun. It’s boring. Boring until you have plenty of money, and then it’s quite fun.
When you’re ready to talk, I want to talk with you.
Read every one of the Investing Mistakes to Avoid here.
Originally posted August 11, 2023.
