The Investing Paradox

Despite interest rates being high, you can’t grow your wealth with fiat currency for one simple reason:

Inflation.

This makes investing as important as ever, to achieve financial freedom.

But, in my years of investing, and having learned from others who’ve invested for decades, you learn a valuable lesson that goes against everything you thought would’ve been true of investing.

This is The Investing Paradox.

The Importance of Investing

There’s no denying the importance of investing.

Exchanging your cash for assets like:

• Stocks

• ETFs

• Real Estate

Is essential for growing your wealth, as well as providing yourself with a couple of additional income streams.

Older generations will continue to tell you that investing is:

• “Too risky”

• “Not worth it”

• “Only for rich people”

But in truth, these money myths have been passed around for generations to dissuade you from copying the actions of the rich to build generational wealth.

There’s still a negative stigma surrounding investing, and what I’ve noticed when trying to get people to start learning about investing, is that it is something that’s quite scary and daunting to start.

• You don’t know what you’re doing.

• You risk losing money.

• You’re going against what you thought was right.

But, people know that if you want to improve your financial situation, and you want to build your dream life, one of the most important things to do is to put your money to work.

What Happens When You Start Investing

I can tell you this through my own experience, and the experience of many others who I’ve helped.

There’s one thing that happens when you start investing, whatever asset class it might be:

You become obsessed.

The idea of buying something which can fluctuate in value every second fills you with joy, curiosity and the ideas of opportunities beyond your dreams.

The result? You overtrade.

Buying. Selling. Buying. Selling. More buying. More selling.

Why? Because the emotions of fear and greed have taken over.

I remember it vividly.

Buying stocks you had never heard of before because you got a tip off of a friend, or someone on Twitter that it was “going to the moon”…

Only to realise that a few months later you’ve been sold a dream and you’re so far in the red you have no choice but to cut your losses.

Thanks Lucid Motors…

Anyway, the point I’m trying to make is that when starting off, the vast majority of people overdo it because it’s exciting.

And because of this, people make mistakes, and the time spent on buying and selling would be better off spent doing something else.

The Big Lesson Learned

The big lesson is to not be consumed by the world of investing. See it more of a side-quest, rather than something that’s going to help you quit your job overnight.

The key is to not prioritise returns. But, prioritise efficiency.

Getting the best return possible, for the least amount of time and work put in.

This concept is why the “set-and-forget” strategy of dollar cost averaging into ETFs is so popular.

You’ll get the market average returns (8–10% annually) whilst doing zero work.

The very essence of investing is that you’re letting the money do the work, not you.

So… make sure this is a core principle of your investing strategy.

It’s a funny cycle, but a common one in investing:

1. Start with ETFs, because that’s what everyone else is doing.

2. See success with ETFs, so try to become more active.

3. Buy and sell too often, and realise it isn’t worth it.

4. Go back to the “ETFs and chill” strategy and wonder why you ever stopped.

How about skip this cycle, and stick with step 1.

There’s really no need to go elsewhere.

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