“Get ready for the market crash!”
“Inflation is OUTTA CONTROL!”
“The housing bubble has now popped!”
“The recession is now here, are you ready for a layoff?”
It’s summer of 2022. I stopped doom scrolling, turned off my phone and entered into another great night’s sleep.
I wasn’t always cool as a cucumber like this. As I look back on my investment journey since university, I realize that I’ve come a long, long way.
Seeing headlines like that would keep me up all night, hunting for more information to get ahead of the herd, running all kinds of ‘what-if’ scenarios, then placing bets on some hot, new trend, and regretting it a few months later when it plops. Then I go, ‘wow, there goes X number of hours of work down the drain’. Then comes the panic sell. Followed by eating a great big mouthful of humble pie.
Like the time I lost almost half of my net worth in 2008-2009 investing in oil and resource stocks.
Sounds familiar?
Nowadays, my wife and I reflect back on the time when we switch to simplified living, no debt, a solid emergency fund, and solid savings.
We now have abundance.
For some of us, we often ask, what do we do with this abundance?
We invest. Let your abundance grow. Let it work for you, so that later on, you have options. You can do what you want, take risks, be generous with your family and community, but still be able to put a roof over your head and food on the table.
Like the time when my wife felt stuck at her job. We looked at our finances, and our investments and emphatically, we both said, “Why not!” She pulled the trigger and landed a better job soon after.
Or the time I had to get double cataracts surgery, because I literally scratched my eyes out because of my horrible eczema. We didn’t even ‘blink twice’ to pay for a private hospital to get the procedure done right away.
That’s because when we have the backing of good savings, no debt, a solid emergency fund, a rock-solid portfolio that generates income and steady gains over the long run, you have great confidence.
And I’m not talking about some kind of fleeting confidence – great one day and gone the next – I’m talking about a deep well of confidence, something we can always rely on to draw water when you’re thirsty. How comforting is that?
And with great confidence, it makes all other aspects of our lives better. We stand taller, our breath lengthens.
Wait, but there’s a ton of pitfalls out there. From pyramid schemes to get rich quick, we didn’t want to get burned, or feel like Chicken Little.
So one day, we sat down and decided to truly look at what our priorities are for investing in the long term, and set forth a plan.
What do we want out of our investments?
Steady GAINs Over Time
Let’s face it. We all want to earn a little more. That could be for retirement, a home, or a kid’s education.
Or heck, maybe something a bit more exciting, like hiring Celine Dion for your private anniversary dinner with your love. (We can all dream).
But we all don’t want to lose our shirts and end up on the streets, right?
But on the flip side, you don’t want money laying around in cash, collecting a pittance in interest while the real interest rate is sky high.
We didn’t want to miss out either.
So we wanted to strike the right balance between addictive gambling and stashing bills under your rocking chair with a shotgun on your lap.
So what’s the right balance?
Liquid and Mobile – Be Like Water
If only life is as straight a highway on the prairies; A to B. But we all know it’s more like the twists and turns of a mountain road.
Let’s say you meet your love of your life. Time to cohabitate!
Or a new bundle of joy sprouts up.
What about getting wild and diving into Southeast Asia!
It’s all about options and staying fluid. It’s that simple. It brings us peace and security.
For us, especially living overseas, being liquid and mobile with our assets is a top priority. Nothing should be locked in a one trick pony investment. It pads us from risks, and it lets us cherry pick opportunities.
Which is one reason why we’re so against GICs, even in this rising interest rate environment.
Who says a rolling stone grows no moss? Ha!
Simply Put – Get a Good Night’s Sleep
However we invest, it has to be simple, it has to follow a proven process, it has to be diversified to spread the risk, and it has to ignore the incessant noises of the news and social media.
That means we’re not hanging by a thread to all the jargon spewed out my the talking heads, exhausting ourselves by ‘timing the market.’
Timing means making decisions, and I absolutely HATE making decisions. It takes time and mental energy. You know how many things influence my decisions? Anything and everything!
This is the point I want to drive home. What’s the point of investing if it’s going to be a hassle?
Less sleep means poorer health. For me, that means my eczema might start up again.
Let’s not forget what the number one thing is…health.
By the way, like a lot of people, we have day jobs! We’ve got better things to do, like working on our magnificent life.
We wanted to set it and forget it.
Alright, buckle up, sit down and really, really define what your expectations are before entering into investments. We’ve listed ours, what’s yours?
So, the answer that checks all the boxes for us is…drumroll please.
A balanced and diversified portfolio.
This would consist of lost-cost ETFs (Exchange-traded funds) that contain a basket of diversified stocks and fixed income funds from around the world. We have 8-10 individual ETFs, that’s all. Simple.
Then, once things ‘unbalance’ like when high growth tech stocks run shoots for the moon, we simply sell some off, purchase the under performers, all in under 10 minutes on our phones, once or twice a year. Rebalance again when things are out of whack again.
And Presto! You systematically have a buy-low and sell-high process. Simple as that.
I hope this helps bring some clarity to investments. Arm yourself with a foundation, like we did, so you have confidence to face the noise and get a better night’s sleep.
Oh, next time you come across some hot trend, like Crypto, you can raise your nose in the air and say, ‘Naw. Thanks, but no thanks’. (70% evaporated in half a year, yikes).
And congratulations, you have abundance. Breathe easy, stand tall and onwards towards your magnificent life!
About the picture: A simple Chinese chard dish. Steamed. Sesame oil.