Twenty Investing Lessons Learned
Michael Batnick, co-host of ‘Animal Spirits,’ one of my favorite investing podcasts, released an article I enjoyed called ‘Twenty Lessons Learned’ in response to the recent downturn in the stock market.
Here are some of my favorites, but I suggest you click to the article and read all 20:
- Survival is the most important thing. Your portfolio must be able to weather euphoria, panic, and malaise.
- Nothing is risk-free. The S&P 500 is down 16% year-to-date. Intermediate-term “risk-free” government bonds are down 20%.
- Past performance is not indicative of future performance. Past behavior is.
- You didn’t know this was going to happen. You don’t know what’s going to happen next.
- Investing is hard.
More Language Learning Tips
In last week’s email I included a Twitter thread on ‘how to actually learn a foreign language’ and a few of you wrote in with great follow-ups:
Mary said, “I found a free app called Tandem and it is a gold mine. You talk to real people who speak the language you want to learn. Everyone is so nice! You can just text with them or opt for audio or video calls. They are just regular people living all over the world and they want to learn English so it is a win win. I have learned so much Spanish just talking to regular people and learning about their culture and their lives. It doesn’t feel like studying!”
Anabel said, “ChooseFI is my favorite podcast. I can’t wait to hear you every Monday. I read your email and wanted to see if you could support a side hustle from a member of the ChooseFI community. I founded Hola Everyone; we are a Canadian-based social enterprise dedicated to making people fluent in Spanish. Our dedicated Spanish certified instructors help students with fast-track language learning with customized courses built around their level of comprehension, interests, and goals.”
ChooseFI Community Taking Action This Week
- Dathan said, “My 1% better was to actually take the time to look into the funds that my 403B contributions were being invested into. The expense ratio was 0.6% (and the returns over the last few years were suboptimal). I was able to transfer all of these funds to Vanguard index funds with an expense ratio of 0.04% (and better average returns over the last decade) as well as send future contributions there. Fifteen minutes of navigating the website to save thousands over the next few decades.”
- Sara said, “My 1% better is actually 8.83% better (x2)! I made the choice about 18 months ago to leave the full-time workforce behind and now work a variety of part-time and contractor jobs that I love. It gives me a lot of flexibility with my schedule and allows me to do things that I actually enjoy without having a specific company dictate everything. I recently found out that my primary job finally did a cost-of-living adjustment after a decade of the prices increasing in the area. While we were getting 3% annual raises, that wasn’t keeping up. So, this year, we all get two raises within 3 months, one now and one when we normally do. Given that it is incredibly difficult to have your pay adjusted without a position change where I work (which I’m not interested in), I’m stoked. Plus, I get a 401k match even as a part-time employee, so that’ll go up twice as well. All in all, this is a huge win and requires no effort on my part other than showing up to do a job I love 3 days a week.”
- Kira said, “My 1% better is setting my mom up for a stress-free retirement! A couple years ago, I moved her retirement funds from fee-laden managed accounts to Vanguard, signed her up for Personal Capital so she could visualize her finances, and built a budget for retirement. Now, shes ready to retire! I planned out her safe withdraw rate, set up her cash buffer, and figured out social security and healthcare costs. I gave her a pdf for Mother’s Day that illustrated her cash flow, net worth drawdown, and annual steps I plan to take to keep her on track. Acts of service doesnt usually rank high on my love language priorities, but it feels really rewarding to do this for my mom since I find personal finance so interesting (and she does NOT). I have advised my girlfriend and friends as well and I plan to keep helping friends and family in this way. The FIRE is spreading even to people who don’t (even know they) want to learn about it.”
- Daniel said, “My 1% better is that I start a remote job on Monday that pays 56% more than I’m making now and allows me to reap the benefits of geoarbitrage. I’ve also been keeping housing costs extra low this year by doing pet and housesitting. High salary and low housing costs will accelerate my FIRE progress beyond my original start-of-year estimates.”
- Mike said, “FI is a bit different in Australia as there’s some differing economic factors, tax structures and cost of living but the principles you guys have offered over the years stand true and as always, it’s about mindset. Our biggest wins and things that have translated across from the podcast are decision making, life systems, small improvements and the psychology of money. You’ve provided universal and practical steps for people to not just aim for FI, but to take control of their life and improve it. Thanks for being such a force for change. My improvement of the week was the discussion my partner and I had when things started to look awry with the stock market in the past 2 weeks. It was the first time we’ve seen a large dip relative to our investment and my partner was concerned. We spoke about the long term and how this will be a small event compared to the many to come in the future. This was a win for us given it took my partner some time to come around to investing and it was great to chat about it with her.”