Investing should be boring because building wealth is not a real live casino for you to be entertained from. Building wealth is done slowly but surely rather than to the extremes like some folks have been doing from 2020 – 2022. The people who built wealth quickly got wiped out eventually.
The ones who try to build wealth quickly through investing aren’t interested in building wealth. They’re more interested in the highs they get from buying options/puts/calls. Investing should be boring because the right kind of investing does not give you 50%+ returns in a single day.
Over 5 – 8 years, maybe they do. However, in general, they should not be giving you those returns in a single day. That’s not the best risk-adjusted way in order to build wealth. Otherwise, that’s not investing. It’s gambling. You don’t want to gamble your future away, you want to protect and build it.
Guess how I felt when after investing consistently all throughout 2016 and I only came out ahead by $1,000? That doesn’t even cover one month’s worth of living expenses. However, I kept at it and never gave up. In 2017, I made something closer to $3,000. Better, but still not significant.
Then now, I snowballed that amount even higher in that one year’s worth of good returns can pay for my entire expenses and then some. If the returns are particularly good, then it can even return more than my salary! What! The important thing is that it took time in order to get here.
Why Investing Should be Boring
Investing should be boring because you can SMASH that social share button and post to your favorite social media! Your friends may be getting the wrong idea by going into Reddit subreddits such as WallStreetBets and think that that’s the way to go. It’s not.
So with that said, let’s go over more reasons why investing is not something to be excited about!
1) Investing Should be Boring Because Wealth is Built in the Long Term
Anyone in America can become wealthy over the long term. Very few people can become wealthy over the short term. Sure, you have those people who literally become overnight millionaires by buying calls or puts at the right moment and ended up being right at the end. Or lottery winners.
However, these stories are in the minority of the minorities. True wealth is built over the long term. Investing should be boring because long term wealth building returns are not that exciting. They are a slow but consistent 7 – 10% returns per year.
Not the 7 – 10% returns that people are looking for in a single day.
It’s very difficult to become wealthy in the short term but it’s simpler to become wealthy over the long term. Why choose the harder route when you’re going to end up at the exact same place anyway? It doesn’t make any sense whatsoever. True, sustainable wealth is built over the long term.
2) Hyper-increase in Price Isn’t Normal
We all know the story behind the Tulip Mania. There was a hyper increase in price in a short amount of time and many people got burned trying to get in on the price increase action. A hyper increase in price isn’t normal. The hyper increase in housing prices in 2021 and 2022 is not normal.
The hyper increase in price in bitcoin is not normal. The vast majority of hyper increase in prices of anything resulted in a hyper decrease in prices in a very short amount of time. Then the cycle repeats over and over again.
That’s why investing should be boring. You may have a good time on the ride up.
But you will have an ever harder time on the way down. The price decreases of 2022 should have convinced you of that. It’s one of the fastest bear markets on record. The increase in prices we’ve enjoyed in 2020 and 2021 is over.
Prudent investing skills will always win out over in the long term.
3) Investing Isn’t a Game
You’re dealing with money. Money isn’t meant to be bet on. Squid Game is not a real life version of what money should be used for. Money puts food on the table. It’s what lets you have a roof over your head. Investing should be boring because investing is not a game. You’re building for your future.
Even the people at WallStreetBets who trivializes losing money eventually understands that money isn’t a game. They pay for that when they have to pay gas and rent at the end of the month. You’re dealing with your livelihood, you’re dealing with something that’s going to put food on the table.
Money isn’t everything, sure. However, that doesn’t mean money is nothing. The choices that you make today will have an impact on the choices you will be able to make tomorrow. You don’t want to work for your entire life and have nothing to show for it.
You want options.
4) Investing Should Let You Work on Something Else
You shouldn’t have to focus 24/7 on your investments. When investing becomes exciting, you want to put every single ounce of your attention into the investment. You can’t wait until new news comes out, giving you that extra hit of dopamine that you desperately crave.
You should be able to live life outside of investing. Investing should be boring because your entire life should not be based on whether or not you made or lost money today. There’s other things in life that you should be able to do. There’s other things in life that are even more important than money.
When you can’t even focus at work because you’re waiting on some earnings report to come out is when you’ve gotten too far deep into investing. There’s other things that you can focus on. Other things that you should focus on. Don’t lose sight of that.
5) Stock Market is Not a Casino
The stock market is where it allows people to build wealth over the long term. It’s not a casino where you get comped for losing money and playing at the blackjack table. The stock market is designed for people to build wealth. The stock market was created for people to build wealth.
Not to play around and bet it all on black. Casinos are separate entities from the stock market for a reason. Fortunes are made and lost in a single day in a casino. You don’t want to play in that volatile of a market. The inability for people to manage the volatility is what destroys investors.
Don’t ever think that the stock market is such a trivial thing that you can afford to just plop a couple dollars that makes you rich overnight. Investing should be boring because slow and steady preserves wealth. The fast and easy does not have a good historical record of preserving wealth.
6) The Minority Became Rich Overnight
Many more people got burned trying to become rich overnight than the many people who actually became rich overnight through the stock market. Very few people became wealthy in one day through investing. Don’t be convinced by what the few people have been able to achieve.
You are more likely not to become than person. It’s a better strategy to try to achieve what the 99% of people became rich doing. Which is to invest in index funds and try to get a coveted 7 – 10% yearly returns over the long term. That’s why investing is boring.
The long term is what matters. Not the short term.
Part of becoming wealthy is following what the successful people have been able to accomplish and try to replicate it. Who knows, by trying to replicate it, you might even beat out and surpass the heroes that you’ve been looking up to.
Finding a good mentor is key in building wealth because we don’t know how to do so straight out of the womb.
7) Excitement Causes Human Error
People have, what are called, emotions. So when they make money in one day from day trading, they suddenly think that they are special. When they just got lucky. When we get excited is when we are more prone to human error. We aren’t emotionless robots with 100% logic all of the time.
We have feelings that cause us to make decisions that stem from our feelings. It’s dangerous when those feelings spill over to our investments and our money. It’s what makes us think that we’re special and better than others. Even others who are much more wealthier than us.
Investing should be boring because it allows us to avoid our emotions. However, when we get our excitement from our investments, then we are much more prone to human error. You don’t want to lose money because you don’t just lose money at the end of the day.
You also lose time. Losing money is not fun.
8) Outperforming the Market Isn’t Necessary
In one of my financial services interviews, the interviewer asked me what I like to do with investments. I just flat out told him I just invest my money in the S&P 500. Nothing fancy, no need to outperform the market. He looked at me like I wasn’t a good fit.
He rejected me in the end, which was OK with me.
There’s no need to outperform the market. By trying to outperform the market, we end up underperforming the market. Investing should be boring because there’s no need to outperform the market.
A yearly 7 – 10% return per year is enough for the majority of Americans to become millionaires in 40 years.
There’s many people who say “a million in 40 years is nothing”. However, wouldn’t you much rather have a million dollars instead of talking about how having a million dollars is nothing? There are many people in the personal finance journey whose logic you just will not understand.
9) It’s Been Proven Boring Investing Works
Investing should be boring because historically, it’s been proven to work. There are many real life examples out in the world that shows that it’s been a proven way for people to build wealth. Boring investing gets people there. There’s no sense in going against a method that’s been proven to work.
When you have endless trunks of money, then you may decide to use a portion of your money in order to play the market. See if you can beat it. However, when you have to use money in order to build wealth, then it’s not a time to gamble it and hope that things work out.
It’s a time to use a proven strategy that gets you there. Many people just simply won’t get there because they have no patience. They want to get wealthy now through exciting means so they end up betting the house on something that doesn’t work out over the long term.
That’s a dangerous mindset.
Investing Should be Boring for Long Term Gains
Long term gain is what matters over short term wins. In the first three months of my investing journey, I actually lost 3%. I wanted to give up. After 3 months of consistent contributions, I ended up with less money than before? What! That’s not fun.
However, I stuck with out and brought my net worth into the $400k’s.
There are many people who lost 10% in their first year of investing. Think how badly they felt. However, the ones who stuck with it over years and even decades have seen their wealth climb to levels people can only dream of.
Investing should be boring for the long term gains because compounded returns are significant.
It won’t matter in the first year, or even in the fifth year. However, in the 8th, 9th, or 10th year, things will start to matter. These days, my investments can even pay for an entire year’s worth of expenses and then some. I can only imagine just how much more impactful it will be six years down the road.
I got here in just six years worth of investing. Imagine how much further I will get to after another six years. It can only snowball into bigger impacts and bigger amounts. Sure, the 2022 bear markets sure doesn’t make investing fun. However, that’s just a part of the time.
Investing should be boring because the long term wealth building is what matters. Not the short term volatile fluctuations that may or may not make you win money. I don’t regret looking at the long term for a second. I can only imagine how much further it will help me in the years to come.
Investing Should be Boring: 9 Reasons Why
- Investing should be boring because wealth is built in the long term
- Hyper-increase in price isn’t normal
- Investing isn’t a game
- Investing should let you work on something else
- Stock market is not a casino
- The minority became rich overnight
- Excitement causes human error
- Outperforming the market isn’t necessary
- It’s been proven boring investing works
