If you pay attention to day-to-day stock market performance (a habit I picked up while reading the newspaper in 6th grade on a neighbor’s driveway while waiting for the school bus) you know that yesterday was a doozy. These past two weeks have been rough if you’re investing for short term gains.
Which, of course, you shouldn’t be. Disciplined investing is about putting money to use, year after year, forgoing current consumption in the interest of returns. You won’t get year-on-year 12% returns like some personal finance types (and, incidentally, Bernie Madoff) seem to tout, but 5-6% returns, long-term, are feasible, as long as you can stomach volatility like these past 2 weeks (or heck, 10 years). Getting over a short-term mind-set goes against much of human psychology — but many of the biggest rewards in life come from (near) daily discipline, even through set-backs, in pursuit of long-term goals.
You learn to just keep going.
I’ve been pretty good about always making sure to have money left over — even during times in my life that were pretty tight — but one of my aspirations for this year is to be more disciplined about engaging in (near) daily rituals in pursuit of long term goals in other areas of my life. These include:
- Blogging 5x a week here
- Writing 1000 words of fiction a day
- Running 4-5x a week
- Planting seeds daily for a good launch of All The Money In The World in March 2012
Progress on many of these fronts is slow, just as building net worth sometimes seems to go very slowly (or in a negative direction). Readership goes up and down here, though we seem to have broken through the 10,000 visits per month barrier pretty regularly. I’m 22,000 words into my 1000-words-a-day experiment and it is definitely starting to feel like habit. I’m figuring out how the plot will work, though many of those words are going to be useless. Running through the summer heat, into my third trimester, has involved getting up early in the mornings, which means going to bed early, which takes away from the already limited personal time I have in the evenings after my sleep-is-for-the-weak kids go down. As for a book launch that is more than 6 months from now, who knows what makes a book sell? Many of the things I tried with 168 Hours took time but appeared to have no immediate pay off whatsoever. On the other hand, I’m starting to see long-term, aggregate returns, like the 100,000-150,000 people who now visit my BNET blog called “
168 Hours” every month.
As with investing, I think you have to focus on the small wins — a net worth amount that you first cross, for instance, then go up and down around many times, then you eventually wave goodbye to in the rear view mirror. In the 1000 words, you find a solid sentence, the germ of a scene, that you would not have created without that daily ritual. After many mornings of attempts, you finally run your sluggish body all the way to the top of a switchback hill with no walk breaks — and then turn around, look down on the valley, and ponder how far you can go when you just put one foot, one word, one dollar in front of the other.
If you pay attention to day-to-day stock market performance (a habit I picked up while reading the newspaper in 6th grade on a neighbor’s driveway while waiting for the school bus) you know that yesterday was a doozy. These past two weeks have been rough if you’re investing for short term gains.