I’ve made a lot of investing mistakes. I bought into the dot-com bubble and rode some stocks to great highs and then quickly down to zero. Whoops. It was a great time to learn because my portfolio was minuscule. I lost around $5,000, but it may have been the best $5,000 I ever lost. Life lessons are best learned when you have lots of life left and little money to lose!
However, the biggest investing mistakes I made were not holding on. The most painful example is Apple which I sold at the end of 2015. I had these thoughts at the time:
- Apple makes most of their money from the iPhone and upgrade cycles are getting longer, so profit will suffer.
- Apple will continue to lose market share to Android.
- The smart phone market is saturated.
I was too “smart” for my own good. Apple’s growth days were not over and I lost money:
- Apple shares are up over 350% while the S&P 500 is up just over 100%.
- Apple has paid out a load of dividends.
- I paid capital gains taxes.
Limited Downside, Unlimited Upside
The amount of money I could have lost in Apple was finite. It could only go to 0 which was extremely unlikely. However, the upside was (and continues to be) far, far greater. This is not only a powerful investing lesson but a great life lesson. I think that many pursuits are similar.
Consider the following:
- You strike up a conversation with a cute stranger:
- Downside: They tell you to buggar off.
- Upside: Life partner!
- You start a YouTube channel:
- Downside: No one watches. You’ve wasted some time.
- Upside: The channel goes viral. You make money and get invited to speak at events.
- You start a business selling whales on Etsy:
- Downside: If no one buys your crotchet whales, you’re out some yarn and some time.
- Upside: Your strange hobby makes you some money!
And then there’s FIRE:
- You quit your job when you’re 40:
- Downside: You run out of money or are bored. You go back to work.
- Upside: You carve out an amazing life with your newfound time.
Fortune Cookie Wisdom
Life begins outside of your comfort zone.-a wise human
Real change is difficult at the beginning, but gorgeous at the end. Change begins the moment you get the courage and step outside your comfort zone.-Roy Bennett
Coming out of your comfort zone is tough in the beginning, chaotic in the middle, and awesome in the end… because in the end, it shows you a whole new world !-Manoj Arora
I won’t wait forever.-Taco Bell sauce packet
Nothing dared, nothing gained.-fortune cookie
I believe all of that comfort zone wisdom is real. Nothing great happens if you sit on the couch all day. The TV will dull your brain and the Cheetos will make your hands orange.
Outside of our boundaries is where growth happens. And it shouldn’t be that scary either because there really isn’t much to lose. The Worst-Case Scenario rarely happens. But if it does, you’ll pick up the pieces, make a mental note of what you learned, and move on. Perhaps a lesson learned from failure will help you with the next challenge?
But you could also massively succeed. Instead of thinking this:
What if it all goes wrong?
How about this:
What if it all goes right?
What would your life be like then?
If you think far enough out, none of us are really safe anyway. We’re all going to die. Life is a lot more interesting if we make ourselves vulnerable and take some chances along the way.
Have you done anything that’s scared you lately? Why not?
More 1500 Days!!!
You can also find me (and the dinosaurs) at:
Mile High FI podcast:
- EconoMe: Hey look, I’m speaking at EconoMe later this year!
- Facebook: Facebook group and page
- YouTube: My channel is mostly devoted to home improvement, but I have some other material coming up soon too.
- Instagram: Pretty pictures of dinosaurs, sunsets, and nail guns!
- Twitter: Spontaneous, often insane, ramblings
- Coworking space: On the surface, MMM HQ is a coworking space. Look a little deeper and you’ll see that we’re really building community. The members of MMM HQ are some of the finest people I know.
Other resources I like:
- Camp FIs are amazingly fun! I hope to attend Rocky Mountain and Joshua Tree this year. See you there?
- Need to learn how to invest? The Simple Path to Wealth is all you need.
- New to FIRE? Need some FIREy guidance? Check out Fiology and the accompanying workbook!
Join the 10s who have signed up already!
Subscribing will improve your life in incredible ways*.
*Only if your life is pretty bad to begin with.