Portfolio Addiction

I recently started reading Adam Alter’s book Irresistible. This book is a kind of a shell shocker on how technologies, like our iPhones and social media, are morphing into the methamphetamines of the 21st century. A bold statement but the more you read the book, the more you start to think to yourself “I might actually have a problem.”

Today, more than ever, we are so completely overloaded with information that it’s near impossible to stay focused on the important aspects of our lives. I can attest for this myself, in just the few minutes it took to write this article, my Apple Watch has sent me 5 alerts, I checked my e-mail a dozen times, and I keep staring off to check the market on CNBC. I also went to Amazon to find a URL for Adam’s book so there’s another distraction.

“…In 2000, Microsoft Canada reported that the average human had an attention span of twelve seconds; by 2013 that number had fallen to eight seconds. (According to Microsoft, a goldfish, by comparison, has an average attention span of nine seconds.)…” 

This makes perfect sense. Why does Google allow you to skip ads after 5 seconds? The answer, you don’t have the attention to listen much longer.

…Human attention is dwindling

Microsoft Canada

And this trend of diminished attentiveness is not going away anytime soon. The more technology is absorbed into our daily routines, the more we are doomed to NEED it.

It’s kind of ironic that Google will show me 294,000,000 results for “Internet Addiction” articles but zero results for any trends showing the growth of internet addiction.

Google Search – 294 Million Results
Google Trends – No Results

So this brings us back to your investments. With our brains only paying attention for maybe 7-8 seconds, how are we supposed to hold an investment strategy or plan a retirement for 20+ years? The world is becoming more and more complex for retirees and the reliance on the individual to provide for themselves is only growing.

As time passes, every bank, financial planner, investment firm or insurance agency is finding new digital ways to blast you to take action. You will never see an advertisement from any of these firms saying “just stick with your investments, you’re doing fine!” Instead, they tell you about making money quick, retiring early, avoiding losses and a mess of other nonsense.

And don’t think your financial advisor has immunity to this, honestly, they probably have it worse. I find myself having to step back from the ledge of stupid decision making all the time!

With that, I wanted to bring back a chart from my first post. This is a piece that JPMorgan put together that really helps break everything down.

I am perfectly fine with clients being hyper-attentive to their investments, and would never tell anyone to turn a blind eye to how they are invested. But WHERE we allocate the majority of our attention is where we are going to see the best results.

  • We have TOTAL CONTROL over our spending and savings strategies. 
  • We have TOTAL CONTROL over our asset allocation. 
  • We have SOME CONTROL over our health and employment. 
  • We have NO CONTROL over stock market gyrations, politics, tax changes, or impacts to social benefits.

Spending time on budgeting and taking an appropriate level of risk will nullify most of the noise the media blasts our way.

Focusing on our health through diet and exercise can potentially increase your longevity (longer retirement).

Bettering your employment through personal development, certification, and continuing education can improving your earnings and savings potential. 

What the market does on any given day, what any politician says, what CNBC just mentioned, or how your accounts performed relative to the S&P 500 are all useless. They have no direct bearing on your personal finances.

Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

The Downside of the Internet

Info Overload - Shirky

With the advent of the internet, the availability of almost anything you can think of is only seconds away. Whether it’s a recipe, directions, homes for sale, or a digital copy of the encyclopedia, you can pretty much find anything you’re looking for in a matter of seconds.

Social media, being part of this internet revolution, has been one of the most amazing components of this revolution. In one application, you are able to keep in touch with a massive network of friends, family, and co-workers like never before.

In what seems like an eternity ago, you once had to actually pick up the phone and schedule a time to meet. Now you can creep on someone’s social media feed and monitor their lives in real-time.

Why actually call someone when you can just check their Instagram and Facebook for all the questions you have?

The past few months I have been working hard to cut back my social media usage. As part of this process, I have deleted all social media apps (except Twitter), and access my profiles through the web. The more I tracked what I am spending my time following, the more I realize I am killing brain cells and wasting valuable time.

Along with the useless photos, videos, and news articles I’ve consumed, The Four work tirelessly to ensure we are fed sufficient advertisements to further steal your time.  Among “The Four”, it’s Facebook and Google that spend the most time attacking the rest of your spare time.

I would wager that Google and Facebook know more about you than your family does.

The 4 - Scott Galloway

With this detailed knowledge about your desires, wants, and dreams, they bombard you with wave after wave of products and services to hopefully convince you to make a purchase.

Now I could care less about the type of jeans Facebook convinces you to buy, I am instead concerned about the media, content, articles, and news outlets they think are relevant to you.

With this deep understanding of how your brain works, Google and Facebook send you an endless barrage of other (similar) content sources for you to consume. The overwhelming rush of media and news leads to an issue we have to keep an eye on.

This issue is what we call confirmation bias.

confirmation-bias (1)

Confirmation bias is essentially spending all of your time and energy only consuming content that agrees with your existing beliefs.


Source: Farnam Street

If we use the economy as an example, this can be seen quite easily.

Let’s assume you are concerned about an economic recession. A quick trip to Google or Facebook will land you right in the middle of a dozen writers concerned with the same thing.

Literally, searching the words “economic recession” in either of these platforms brings about the end of the world.

It’s scary but you can search just about anything and make it become true. Try searching your symptoms when your sick, or something about your political views, the platforms then fuel your confirmation bias to the point of no return.

My point with this article is simple and I’m going to repost the quote at the very top.

Info Overload - Shirky

Facebook, Google, and almost all media sources out there are simply yes men, aiming to agree with whatever the hell you want to think about that day. Your price for this agreement is that hopefully, you buy something from whoever bought the ad.

None of these platforms are in the business of economics, asset management, financial planning, or retirement. These media companies are paid on advertising dollars, so whoever pays the highest amount gets to determine what is seen the most. It is up to you to take the time to understand where your content is coming from and if it really affects your financial and investing decisions.

Nobody is going to control the amount of garbage floating around the web. Instead, we have to construct strong filters for rejecting bad content. Our goal is to make the best, unbiased, decisions we possibly can. So spend as much time as you can evaluating all of the facts, not just the ones that agree with you.

Please ignore typo’s, I will be editing grammar as I go!
Sources: Farnam Street, Scott Galloway, Google, Facebook
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Luck or Serendipity

Munger - Career Advice.jpg

When you think about the future, where do you see yourself?

For some, it’s retiring in a place you love and enjoy. While for others, it’s building a wonderful business and career that is both challenging and rewarding.

But when we think of these goals we set for ourselves, how do we actually get there? And when we see people ahead of us in life, how did they get there?

It Must Have Been Luck

I was listening to an old interview with Jason Zweig of the Wall Street Journal as he went into a long discussion on what younger investors should be doing with their time. His advice was to avoid spending a ton of time trying to trade financial markets and reduce time spent on social media sites for fear of massive waves of confirmation bias.

Instead of spending tons of time trying to outsmart the rest of the world, Jason’s recommendation was to put yourself into a position where good things can happen for yourself and your career. If you are able to change up your daily routines and network with new people, you increase your chances for success.

To further explain this, Jason uses the concepts of luck vs. serendipity. With luck, you are hoping something will happen by chance. With serendipity, you are actively putting yourself into situations to make something happen.

How I built this with Guy Raz

Source: NPR

This concept made me think of the amazing podcast How I Built This on NPR. Each week, a business owner is interviewed to understand exactly how they got from an idea to a wildly successful enterprise. These entrepreneurs literally kill themselves trying to solve a problem or create a brand. With countless years of dedication, eventually, the reward was found.

You can take the luck/serendipity example from Zweig and apply it to any of these entrepreneurs. Were they completely lucky in building out their empires? Or, were they so diligently working to build their business, it eventually worked? (serendipity)

So think about the goals you have in front of you right now. How are you going achieve them? What can you be doing besides hoping they will come true?

An interesting survey from TD Ameritrade shows some terrifying statistics that I hope for our entire population are untrue (1500 millennials surveyed):

  • 53% of millennials expect to be millionaires
  • The average age to start saving for retirement was 36
  • The average age to start retirement was 56

So to summarize, millennials want to work for 20 years, save at age 36 and have a million dollars or more in the bank by 56. This survey shows that Millennials have a high emphasis on catching a “lucky break”  and a lot less focus on reality.

With a few adjustments in Vanguard’s Retirement Income Calculator, you can see how far off these figures actually are. For an individual making $100k/yr, they would barely have enough saved to live off $2k/mo at age 56, even if they saved 30% of their earnings every year!


Source: Vanguard

Begin by starting to make REALISTIC goals for the future and some ACTIONABLE steps for attaining those goals. Sitting around and expecting something to happen is a fool’s errand. Instead of chasing the lucky option, look for the most serendipitous option.

For Your Career: Have you invested enough time into your biggest asset (YOURSELF) to get the job of your dreams? Or could you be doing something more with your time to better yourself and your job prospects?

Paying Down Debt: Are you actually making a budget to pay down your debts or are you just hoping it disappears? (debt grows, so pay it off)

Planning Retirement: Are you spending enough time actually planning out the road ahead? Or did you arbitrarily choose some magic age to quit work?

In the end, there are two ways to look at it.

  1. You luckily completed your goals
  2. You put yourself into every possible position to achieve your goals (serendipity).
Please ignore typo’s, I will be editing grammar as I go!
Sources: NPR, Jason Zweig
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Surviving Your Investments


I recently finished reading Deep Survival by Laurence Gonzales. It’s an excellent book that does a great job of evaluating how people make decisions and ultimately fail or succeed in remarkably challenging situations. These chaotic events are pretty insane. For example, Gonzales recounts the decisions made by a climber while basically falling off the side of a mountain.

In the book, Gonzales does a superb job relating how our brain acts in these stressful and strenuous situations, and where our reasoning goes wrong. Most “survivors” in these stories seem to share similar characteristics that help them overcome the struggles they were facing. I figured I would outline some themes I picked up from the book and how I see this related to everyday investing.

If we think big picture for a second, how survival relates to investing is quite simple. When we face difficult times, we tend to become blind to seemingly obvious actions and make decisions that seem irrational in hindsight. Everyone knows not to drink salt water but if you are stuck at sea for a week, you probably will forget.

Behavior Gap - Forest & Trees

We begin to focus way too intently on the trees and ignore the fact we need to remember it is a part of the entire forest. As with drinking salt water, we forget about the big picture of needing to make smart survival decisions. Just as we might abandon our investment process after a few bad days.

As investors, we need to make sure our decisions are matching our future goals. We cannot let one specific day of volatility (tree) take our eye off retirement, college savings, a new home or whatever our goal (forest) is. We have to maintain our ability to step back and double check our work. Our goal should be to make sure that we can see the forest for the trees, and not lose our perspective in any particular situation.

Traditional economics assumed perfectly rational agents. So does traditional survival training. Neither assumptions reflect the messy real world.

I love this quote by Gonzales as it really emphasizes this point:

Swindoll - 90.10.jpg

You will never have a simple, easy investing career. Shit happens sometimes we need to take a breather and recollect our thoughts. Don’t quit or give up when things happen but instead evaluate your surroundings and make the next move.

Investors tend to anchor their thoughts around economic forecasts, market predictions, and other historical stock market events.  These are good starting points but we have to remember they are measures of what has happened in the past. To quote Mark Twain, “History doesn’t repeat itself but it often rhymes.”

It is inevitable that we are going to see something happen in the markets, like volatilitybut maybe to a greater magnitude. This doesn’t mean to scrap our entire process or change what you are doing but instead to revisit our own process. We cannot let ourselves excess over one data point and become blind to other indicators available to us.

Just as with survival, nothing ever tends to play out as it does in training class. Very often these survivors get caught improvising and making adjustments based upon the experiences laid in front of them. As technology advances, information is more easily accessed, more investors enter the market, new challenging situations will be inevitable. It’s up to us as investors to evaluate what’s going on, make smart decisions AND SURVIVE.

Seeing the trees (February 5th, 2018):

dow feb 5

Source: money.cnn.com

Seeing the forest (1980-2018):


Source: http://www.macrotrends.net
Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Stop Chasing Returns

Buffett Quotes - Emotions.jpg

What is it about human behavior that has us all chasing the newest, shiniest investment that comes our way? Each and every year some new topic has the markets all excited and people rush out the door to figure out how they can take advantage of it. But the thing we have to try to focus on is what SHOULD we be chasing with our time, attention, and money.

Let’s look back to the theme for 2017: Bitcoin & Cryptocurrencies

Last year, people went nuts at the first sign of Bitcoin’s price skyrocketing. Without understanding what Bitcoin actually is, how cryptocurrencies work, or even what to do with a Bitcoin, billions of dollars continued to rush in.


The price of Bitcoin climbed more than 1,000% during 2017 and led every news outlet on the planet to allocate at least a few hours discussing the topic. Immediately your plumber, barista, mechanic, and attorney were all cryptocurrency experts and you were the idiot.

So, what exactly happened?

My guess… the FOMO got a little out of control.


Source: The Interwine Group

In the end, most global markets became volatile at the start of 2018, and so did the price of Bitcoin and other cryptocurrencies.


If we look at the Google Trends over the past year, as soon as the market volatility picked up and the price of most cryptocurrencies plummeted, consumer interest flatlined.


Source: Google Trends

If we run this scenario over and over again, there are dozens of other topics the average investor will chase. From international stocks to real estate, we could swap Bitcoin with any other asset class and see similar results in some prior year. We are consumed by the FOMO and seeing others make great returns, so we instinctively chase after whatever seems to be doing well.

So, thank you to Meb Faber for finally putting together this simple and elegant overview of where investors SHOULD be focusing their time.

Meb's Food Pyramid of Investing.jpg

If you take a look at Meb’s Investing Pyramid, we see the core of any financial plan should be focusing on emergency cash and paying off your debt. If you’re making 15% annual investment returns but paying 20% credit card interest, you’re going nowhere. You need a strong foundation to build a home and with investing that starts with a strong personal balance sheet.

Investments should be one of the LAST areas an investor should be spending their time and energy. If you think you have a real edge against the millions of investment professionals and computer algorithms across the globe, you are in for a rude awakening.

Focusing on the basics of personal finance, budgeting, and simple financial planning will vastly improve the outcomes of investors instead of grabbing an extra few percentage points of returns in your 401k.

With personal finance comes personal development. Continuing your education, completing certifications, excelling at your job, improving your well being and community involvement. All of these areas will provide stronger personal and professional returns than trying to focus on your investments to make up the difference.

Invest in Yourself Buffett - VC.PNG

Source: Visual Capitalist

Stop focusing so much on the small minute details like your annualized investment returns and instead focus on how to improve yourself and your household finances. Beating the market in 2018 will do almost nothing towards your retirement. Instead, pay off a few extra bills, advance your mortgage payments, or consider contributing more to your tax-advantaged accounts.

Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Status Quo Bias

Quit Talking - Disney.jpg

The inability to take action is one cognitive issue investors face. This “everything is alright” mentality defers our attention away from our investing and we focus on more interesting things (Netflix, shopping, etc.).

Understanding that we are neglecting our future selves will help us focus on making correct steps today to improve in the future. Without any action, we are blindly moving ahead with no real idea on how best to achieve our long-term goals. Ignoring the status quo bias will help us create the building blocks for an improved future.

Think about it like preventative medicine. If you are taking steps each and every year to ensure your health is in order, the likelihood of a major health issue can be greatly reduced. If you are regularly testing your blood, eating well, and exercising, there is a good chance your doctor will see and adjust your behavior to prevent any major health issues.

But if you spend no time monitoring your health and checking in on yourself, what is it going to take to get your full attention to making sure you are in fact healthy? How do you actually know if your healthy and not at risk of some disease?

Image result for preventive medicine gif

Source: Giphy

The same is true in personal finance and our investing habits. America is struggling in the category of financial literacy and it really requires creating good habits to get us on track. How we manage our credit card and student loan debt, begin saving for the future, and choose our investments all to have a major impact on our future.

If we look at the current state of retirement in American, we can see the evidence:



Your goal as an investor and future retiree is to make sure you are taking the right steps towards bettering your future. You can’t rely on others to cover your living expenses in retirement but sadly 63% of rich kid’s expect to retire off an inheritance.

The last thing you want to do is sit around and wait for the financial equivalent of a heart attack to start planning. Instead, begin taking small steps to organize your debt, your savings, and your retirement. Don’t become a statistic from the EPI survey I referenced above. Start by ignoring the “status quo bias” and instead take some action.

Here are some helpful tips to take some action:

Aggregate your finances. I use Mint.com to organize my savings, investments, and debts to make sure I can monitor my entire net worth each month. Having everything visible in a single spot can help you keep up with all areas of your net worth.

Learn about your finances. There are a ton of free websites to get good content about investing, savings, debt management, etc. I really like Khan Academy for understanding general personal finance. Also, most investment shops provide quality free tools and resources.

Setup a review schedule. This is probably one of the main reasons to hire a financial advisor. If you have no plan to monitor and review your investments, delegate the responsibility to someone else. Everyone has a smartphone with a calendar nowadays, so set up a recurring reminder shouldn’t be difficult.

Don’t think you suffer from the Status Quo Bias? Try to quickly answer the following questions:

  1. What funds (exactly) is your 401k invested in?
  2. What company handles your 401k?
  3. When was the last time you ran a budget?
  4. How much (exactly) are you saving each month?
  5. How much do your investments cost? (Nothing is free, not even index funds)

These are pretty simple questions but if you hesitate to answer them, you probably haven’t spent enough time looking into them.

Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

How to Make Investing a Habit

Watkins - Persistance

How do you make investing a regular part of your life?

How can you increase you’re odd of financial security?

The answer is… make it a habit!

The past few weeks, I have been digging through The Power of Habit by Charles Duhigg. This book should be required reading for all as it really helps shed some light on how we make and break habits.

Why are we failing to consistently go to the gym, or read more, or eat better?

Why are we unable to stop eating fast food, stop spending money, or stop drinking?

Why are we unable to save every month, or make time to invest?

The answer to all of these questions is that we have instilled habits that are derailing our own success. These habits can be both good or bad and it is our responsibility to create habits for bettering our future self.

In the book, Duhigg explains a project MIT conducted on mice. The mice had chips implanted to monitor their brain functions, they were tested by running an identical maze to search for a reward (cheese). The more the mice ran the maze, the faster they ended up finding the cheese. If the maze was changed in any way, the mice slowed down and took longer to navigate. So what happened in this project that changed how the mice progressed through the maze?

The answer is quite simple; once the mice had created a “habit” of finding the reward, they could simply switch their brains off and automatically travel to the reward. If their brain had already analyzed the maze before, and a familiar trigger went off that told them they were in a familiar place, the rest of the maze was navigated on autopilot. Once the maze changed, the mice had to re-learn the environment and start fresh.

Duhigg - Habit Loop

If we think about this in our everyday life you can see the parallels. If you spend all the money in your bank account at the end of every month, you might not even know your overspending. You have formed a habit of spending everything you earned for the benefit of consumption. The trigger is receiving a paycheck, the behavior is making a purchase, the reward is being able to use/consume the product.

Habits are formed once our brain connects an initial trigger to a reward at some point in the future. Once the trigger is recognized by the brain, we automatically revert to finding the reward. We then develop a craving that makes us want the reward again. Once the craving is formed the habit is created.

Think about it like getting dessert at a restaurant. The cue is the menu being presented in front of you and the reward is tasting the treat. You probably have a craving from prior experiences eating dessert, so you constantly have a habit loop of seeing a dessert that looks good, ordering the dessert, and consuming the dessert (cue, routine, reward). The craving for sugar throws you back to step one (cue) once you see the menu at the next restaurant. I think if you go back to my 72 Hours post, this would be your instinctual brain taking over. The process look’s something like this:

Habit Forming Gif

Here’s an example we can all relate to; our alarm goes off, we hit the snooze button and get rewarded with another few minutes of comfort. You then oversleep, skip a morning workout, skip breakfast, etc. etc. etc….

Image result for habit cycle

You can literally apply this logic to any part of your day and see how it works:

  • Bad day at work, crack open a beer, feel somewhat relieved
  • Get paid, spend our paycheck on clothes, feel happy with our purchases
  • It’s lunch time, you go out to eat, feel happy with getting out of the office
  • Phone rings, check your phone, read your e-mail/text messages

You could literally do a million of these habit loops but the key here is to identify how you can better prepare yourself to form good habits.

So what can you be doing to create good investing habits and start securing your future?

First, you need to identify a reward that you want (saving money). Next, you need to find that “trigger” that makes you take action (getting paid). Then, set up a routine to bridge the two together (transfer money to savings). Your goal should be to simply take the following chart and create a process you can repeat. What is going to be your cue, what is the routine, and what is the reward?

Image result for habit loop

I have found working in this order to be most effective as it’s more focused on what the end result will be:

  1. The goal of my new habit is: __________ (reward)
  2. To start my routine I will: _____________ (trigger/cue)
  3. To achieve my goal I will: _____________ (routine)

My reward is less financial stress and my trigger is simply setting calendar reminders for myself at the beginning of each month. I achieve the reward by monitoring my investments and personal savings monthly. This helps me make sure I have made any necessary contributions to retirement accounts, organized my taxes, review my investments and pay all my bills.

Now, if you need a more hands-off approach to investing for the future, look for automation. You don’t have to take time out of your day to invest, instead find a way where its “out of sight, out of mind.” Here are a few things to make it easy.

First, Automate Your Investments:

Whether it’s contributing to your 401k plan at work or set up an automatic bank transfer each month, if you can remove the friction in making a contribution you will begin to build up a nice nest egg. “Set it and forget it” comes to mind! Just make sure you keep with it. You can use this same process for accumulating an emergency fund.

Get paid, automatically contribute to a 401k retirement plan, grow wealthier

Second, Increase Your Contributions as Your Earnings Grow:

Pick a set period of time to reflect on your current compensation. Did you get a raise in the past 6 to 12 months? As your compensation climbs over time, so should your contributions towards your future. Simply increasing your 401k contribution by 1% each year will dramatically increase your savings at retirement. Most 401k companies provide this service for free.

Get a raise, increase 401k and savings contributions, grow wealthier

Third, Make Paying Off Debt a Priority:

I have a few young clients who were big advocates of making their debt a priority. Simply using their increased compensation or bonuses at year end to advance debt payments, they were able to pay off their mortgage, credit cards, home equity loan, and cars before they hit 50 years old. Advancing principal payments on your mortgage, home equity loan, or other high-interest debts is a great way to improve your net worth.

Get paid, pay additional principal on debt, grow wealthier

There are dozens of other options for saving but start with the simple things. You’re not just going to wake up one morning as a wild saver if your not already one. Instead, you will start investing and saving for the future little by little. Once the “bug” bites you and a habit is formed, you are set. You just have to start taking the necessary steps today to get started and form the habit of saving. Automating your contributions and savings are excellent ways of forming habits you won’t even realize are happening.

Think about it like exercising; you will never be able to run a marathon if you just sit around and think about running marathons. You have to put the time in upfront to see the results. It takes countless hours in the gym, going for a run, and serious conditioning to make it a success!

Undoing a habit is another monster in and of itself. I plan to write another article in the future on correcting your bad habits. For now, focus on what you can do to create them!

Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Investing 101 – Start Early

Stay Focused

Today, we start with something simple; how to get younger investors focusing on the right steps for their future. Here, we will start with easy ways to get started, benefits of investing, and how to allocate your time and efforts.

I recently had lunch with a young client of mine to discuss investing. During the meeting, he said something to the effect of “make me rich Jack!”. To which I replied, “my job isn’t to make you rich but instead keep you rich, focus on the things that can make you money and I will help you not lose it all”.

With younger investors today, I find the focus of their investment strategy “get rich quick schemes”. If I asked a millennial or Gen Z to explain different ways to make money, I’m probably going to hear something about cryptocurrencies, flipping houses, Twitch streaming, trading with Robinhood or making YouTube videos. Now, some of these are new technologies and people are making a fortune investing their time into them but the reality is you need to take appropriate steps to plan for your future…in the event, your YouTube channel goes bust.

Investing is a marathon, not a sprint.

For most, the journey to save starts late. In high school, we rarely understand what investing is, then we go off to college and spend whatever we had saved. We graduate, buy a home, a car, a boat, start traveling, get married and start a family. All of this is a perfect start to life but at a young age, investing even small amounts can really have a meaningful impact on your future. I’m not saying to make it a full job but have at least some time and effort into saving for the future.

The problem for most is by the time they can actually sit down and begin to focus on their investments, they are mid 40’s early 50’s and have ruined a lot of opportunity for compound interest to do its thing.

Compound Interest

Compound interest is simple. Think of it simply as “interest on top of interest”. If an investment pays you cash, you then reinvest that cash back into the investment and buy more. Next time it pays out cash you should have received a larger cash payment, which again you reinvest. You are now “compounding” on your original investment.

Now, why this is important is simple. The longer you have to let this machine compound over and over again, the more wealth you will accumulate.

To test compounding, simply take out a calculator and enter $5,000 x 1.1 and keep pressing the equals sign over and over again. It look’s something like this (rounded):

  • $5,000 x 1.1 = $5,500
  • $5,500 x 1.1 = $6,050
  • $6,050 x 1.1 = $6,655
  • $6,655 x 1.1 = $7,320
  • $7,320 x 1.1 = $8,053
  • $8,053 x 1.1 = $8,858
  • $8,858 x 1.1 = $9,744
  • $9,744 x 1.1 = $10,718

Every time you press equals, this is the same thing as compounding (1.1 = 10%). It doesn’t take long to see your original $5,000 is much larger only after a few years of compounding.

Image result for reinvest your dividends

This is your main benefit as a younger investor. The more times you can “press the equals sign” and compound your money, the better you will be in the future.

One downside to working with young investors is that they see it as a waste of time to invest money when they only have a few thousand dollars, but you have to start somewhere. I’m here to tell you, they are totally wrong.

As a financial planner, a lot of my conversations are helping people figure out how to fund certain hobbies or necessities in the future. If you could ask ANY retiree what they wish they would have known earlier, I guarantee the majority say “I started saving earlier.” Back to my original point, a huge issue with saving is that most investors start late. Take a look at what 10 years difference makes when you start with the same investment:

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Source: Business Insider

In the 1950’s-1970’s it was common to work for an employer your entire career, then retire on a large pension as well as social security. But the times are changing. With social benefits (ie: Social Security and Medicare) needing a revamp and most pensions benefits being removed from employers, the goal to plan and save for your future rests on your shoulders. If you screw it up, you have nobody to blame but yourself.

The easiest way to protect your future is to start saving now and just let compounding do its thing. Obviously, if you buy terrible investments or get loaded up with high fee products, you can shoot yourself in the foot. But there are plenty of great options out there to help you eliminate a lot of those options.

Here are a few tips that I would advocate younger investors focus on when it comes to their investing:


If you are able to open up an account with any online investment shop, DO IT. If you have a 401k, contribute to it. If you had a ton of cash sitting in the bank earning nothing, invest it. You don’t have to start with a ton but at least get something happening towards your eventual retirement.

Whether it’s investing in a robo-investing platform like Betterment, Acorns, or Wealthfront or a discounted online broker like Fidelity, Schwab, or TD Ameritrade, just get your money working for you. Working with a financial planner or CPA you can identify the right type of account from a tax perspective as well.


Every time I hear kids tell me they trade on Robinhood or are making money flipping cryptocurrencies,  I shake my head. Investing is not meant to be an adrenaline rush but instead a long-term process. I have no problem with speculating with investments but please realize you are in-fact, speculating.

6-minute abs never actually got you a six-pack in 6 minutes, but it sure sold a hell of a lot of DVDs. Investors love the idea of making a ton of money quick and so they gravitate their investment strategies towards themes like this. If I tried to sell a workout program and said it will actually take months, maybe years, of shoving broccoli, grilled chicken, protein shakes and egg whites down your throat along with endless cardio and crunches, I would never get the program off the ground.

Fitness, like investing, is a lifestyle. You have to choose to stick with it for years for best results. It’s also not an overnight success, some investments take years to really begin to work out. However, if you can identify a strategy that works for you and deploy it at an early age, you will be wildly successful. And always remember that compounding works both ways. You can just as easily compound your losses as your gains so make sure your investment process is solid!

I will do another post in this series geared specifically towards investments but for now, let’s just leave it as you need TIME to be on your side.


This is often overlooked but one of the most important sections.

Saving and investing is a luxury for individuals with the ability to do so. The only way to increase your saving is to make sure you are compensated enough to afford to do so. The question comes in as to what can you be doing to improve your overall pay.

Countless studies show increasing your investment returns are nowhere near as valuable as increasing your earnings and skill sets relevant to do your job. This is especially true at a young age.

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If you like your company and co-workers, what can you be doing with your time to improve your value with your firm? Investing time into certifications, designations, or other work-related activities is much more important than trying to increase your annual investment returns. If you are not happy with your employment, the next step comes in shopping yourself around. It never hurts to put yourself on the market and see what other companies will pay you.


There is a great quote that from famous investor Peter Lynch:

Invest in what you know.

This is always a great start for newer investors. Stop and look at things you spend your day interacting with and try to find an investing angle. Maybe it a product or service you use through work, a website you frequent, or a brand you adore. Investment opportunities are always present and its great to start with the things we know.

A stock at the end of the day is simply ownership in a company. As consumers, we spend our discretionary income on various products and services. Taking a step back to look at how we personally spend our money will open our eyes to many of these companies.

My point is, most businesses are operated as “for-profit entities”, meaning they are trying to make money doing whatever it is they are doing. If you can identify the company behind the curtains, you have taken a few steps towards identifying potential investment options. Think hard about where you should invest your money but I would bet there are a lot of wonderful investment options right under your nose.

Please ignore typo’s, I will be editing grammar as I go!
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.