Controlling my greed is a useful first step.
But how does one do that?
Build a peer-group with better ethics, and less financial wealth.
Then let human nature pull me where I want to go.
Looking around, with my 1990s financial up-bringing, many popular assets look expensive at half their current values. That said, people are making big money and this can be tough to watch.
I work on creating a vibe that I can afford to miss out and seek to temper my envy.
I acknowledge I’ve done enough winning.
So. Much. Winning. 😉
Yesterday, I shared thoughts for my younger self. What about this time in my life?
I’m not young enough to earn it all back, nor am I old enough to lock-it-in and forego further capital appreciation. I checked our joint life expectancy and we’re 50/50 to get another 40 years.
Given that I’m debt free, I’m hurt more by a doubling, after selling, than a halving, and still owning.
Think that through – it goes against every emotion I have with regard to money (and I’ve had a lot of training).
Married, at 51, I need to be taking a 30-50 year view.
Accept the reality of my personal situation and remember the financial reality of near-zero rates.
- Stay invested
- Lean into severe downturns
- Maintain options, and skills, to add value-added work
- Stay debt free – while this is a great time to borrow against cash flow, borrowing against margin is nuts – at some point, the debt cycle will snap back and I do not want to get closed out in a sell off
- Keep my spending choices in check – know that every choice I make sets a baseline for my kids to follow AND creates a cash flow requirement for the rest of my life
Here’s the key lesson from my early retirement => If I’d gotten spooked and sold out (I get nervous in rapidly rising markets) then I wouldn’t have had the capital to buy back my existing positions, which remain “good enough” for my needs.
In a Free Money Era, the risk many of us face is acting on our fears and being priced out of a portfolio we never needed to leave in the first place.
Control your risks by focusing on skills, spending, relationships and daily exercise. These are things I control. Global macroeconomic policy, less so.
Tomorrow, why the heck are people buying non-, and negative-, yielding assets at current pricing?
Sorry about the dud link yesterday at the bottom – it was the same as the one at the top of the page, which worked. Here is is again, it’s the link to a calculation which led to some major changes in my life. Putting a price on my time.
Feel The Byrn 