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:
Also here:
- 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.
you had me at taco bell hot sauce lol
J. Money recently posted…My ridiculous videos have dropped 😎
I love Taco Bell. Having shitty taste is a big FI hack. No need to spend $45 on a steak here!
Love and needed this, Carl. I am too wrapped up in my negativity bias…always concerned with what might go wrong.
As you said, what might go right?
Done by Forty recently posted…Zero Days Out…Were We On Track for Financial Independence?
Thanks DbF for the kind comment. How the hell are you doing? After a couple years, perhaps we’ll meet IRL in the next 12 months?
Liked the scenarios for Unlimited Upside , Unlimited Upside. Without trying there is not even chance.NVDA/GWW are my sold tooo soon list
desidividend recently posted…2021 July Options Income report.
Yep, if you don’t do it, you’ll never know.
But I like to lick the Cheeto dust off my fingers 🙂
…but I am working on launching a new business.
I admit that Cheetos are pretty damn good. Especially those hot ones!
What is the new business?
It’s an eCommerce brand in an emerging niche that currently only has one strong competitor.
Mr. RTTS recently posted…20 Ways to Save Money While Saving the Environment
I love your perspective and thank you for the reminder! I think COVID kicked us all out of our comfort zones to some degree. I made a similar mistake with AAPL with the almost identical thought process. Life continues to be an adventure and I’m still learning along the way. Keep up the great and helpful posts!
Thank you for the kind comments Arthur!
COVID was tough and the effects linger for us. In something I never saw coming, we lost friends because of it. So did my children. But, life is looking up now. Hopefully the delta variant doesn’t terrorize us all.
I’m thinking about quitting my job in January 2022 (80% to 90% FI at the moment). Wife would continue to work for a few more years at least. I would coach tennis part-time (less than that, quarter-time?), spend a lot of time with young daughters, and otherwise not have anything “big” to retire to.
I’m overly worried about the lost income, and regretting my decision (either shortly after or a long time from now).
Posts like this make think of just doing it! But it’s hard. Keep them coming 🙂
Hmmm, if you can mostly live off of your wife’s income, you may not have much to worry about. You can always go back to work after your girls go back to school! I wish I took this course instead.
How the how are you Juan? Long time, no see!
We can live off her income and still save $30-40K per year. I guess put like that, the decision for me to quit seems easier.
I’m doing well, man. Had another baby in October so life is handful with two little girls 🙂 I also spend a lot of time debating on the above and trying to balance the quitting to soon vs. working for longer than necessary. A good problem to have in great scheme of things so I got nothing to complain about 🙂
Yes! Too long for sure. I’m overdue for a live event of some sort. Hopefully, we’ll coincide at one of those soon!
You’re never wrong if you make a profit
LOL I love the whales, they are adorable!
David @ Filled With Money recently posted…Fired From Internship? Here’s What You Should Do
If you’re going to FinCon, I’ll hook you up with a whale!
The latest scary thing is sending our kid back to in person school 😬
My low risk (and still low reward) venture was revived briefly, throwing out some new t-shirt designs on Merch, and that was fun. I’ll keep doing that as long as I have some decent ideas to execute.
We’re sticking with the day jobs for now but I keep looking for good ways to turbo charge our FI plan. We’ll get there.
Oof. The school thing is difficult. Our youngest is too young for the vaccine, so we’re taking a risk too sending her back.
I checked out your site and didn’t see any shirts. Please send me a link!
FI: You will get there. Just remember to enjoy the journey along the way!
Just saw Mindy’s tweet about quarantining 🙁 I really hope the kiddos stay well, and y’all adults too.
I don’t have a ton yet, but they’re all here: http://agaishanlife.com/htv8
I will remember!
Revanche @ A Gai Shan Life recently posted…Good Things Friday (131) and Link Love
Thanks for checking in! I found out moments ago that our exposed kid tested negative for COVID. Woo hoo! In 70 days she’ll be old enough for the vaccine, but who’s counting? 🙂
I always assumed it would be dinos and not whales on etsy 🙂
The podcast is great. Great addition to my cardio sessions
Financial Freedom Countdown recently posted…15 Good Reasons To Retire Early
Dinosaurs are coming. Crotchet ones, not like Jurassic Park.
Upsides are unlimited na downsides are less but a stock can go to $0. Just never catch a falling knife.
Dividend Power recently posted…Should I Rebalance My Portfolio – Week In Review
Hey man Dont beat yourself over it seems like hindsight bias man and you didn’t really need to hold Apple to achieve your financial goals. If an iPhone exploded in a kids face right after you sold you look like a genius!
Hey Carl! Read this one on my flight to Flagstaff last night. And I’m glad I did. Felt like it spoke to me a bit, and it leads into part of what I love so much about traveling. For me, at least, it sort of resets my brain as much as my surroundings. It’s a time for introspection and maybe a little internal philosophizing.
FI really let’s us take time to think beyond the day to day and more about our lives, our decisions, our goals. And occasionally, our fears or what’s holding us back—which you wrote so presciently about in this post. Thanks, this was a good one bud.
Chris@TTL recently posted…Wealth vs Income (and How I Can’t Afford Our Mortgage)