I read a dumb thing today: With the stock market, what does up must come down.
The stock market doesn’t obey the laws of physics. It’s not a bouncy ball. It’s not some bloke in a room typing numbers into a computer. It’s a haphazard aggregation of the thoughts, feelings and analyses of hundreds of millions of people. Crashes happen. Booms happen. We have no way of accurately and reliably predicting them.
The stock market isn’t a math puzzle you can solve. Nobody knows what future stock market returns will be. They are unknowable. Don’t waste your precious time and energy worrying about it.
I’m going to be candid. If you are the kind of person that worries about that kinda stuff – FIRE (Financial Independence Retire Early) isn’t for you. You’ll end up worrying yourself sick. You’ll never be able to relax. You’ll never know if you’ve ‘made the right decision‘.
Things that won’t help you towards FIRE
- Bitching about how much money other people make
- Complaining that your caviar-eating, champagne-snaffling, sports-car driving lifestyle is too expensive to be able to save
- Worrying about whether “we’re due a stock market crash” or “if bonds are overvalued” or “the market is frothy”
Or as The Escape Artist pithily puts it: “You don’t get into FI club by talking about FI club. Nor by arguing on the internet.”
Things that will help you towards FIRE
Focus on the things you control. Or as many people would say, common sense:
- Find ways to earn more money – the more money you have the more you can spend and save.
- Spend less than you earn – if you spend money on things you will end up with the things and not the money.
- Invest based on provable facts (evidence-based investing) – investing in long-term diversified index-tracker funds has been the easiest and most effective way of securing long-term returns above inflation.