I was recently reading an interesting article about the psychology of money and wanted to share some of it with you.
We all know that we should never underestimate the power of compound interest but did you know that if Warren Buffet had started investing at age 30 instead of when he was 10 years old, he would be worth a meagre $11.9 Million instead of the $84.5 Billion he owns today. Crazy, right?
Room for error is key. It’s also important to leave enough room for error/a margin of safety in one’s investment plans to survive the ups and downs in the market, and to stay in the game long enough for the magic of compounding to unfold. This is something I strongly believe in.
Luck and risk are siblings. In reality, other than individual effort, these forces are what every outcome in life is guided by. Did you know that Bill Gates went to one of the only high schools in the world that had a computer? I didn’t. When things are going really well, we should remember we are not invincible and that luck probably played a role in our success. And where there is luck, there is risk, so things can turn for the worse at any time.
Nothing is as good or as bad as it seems. Go out of your way to find humility when things are going right and forgiveness/compassion when they go wrong.
I also came across the photo in the blog and thought to myself that it perfectly depicts how I feel about investing money intended for long term goals in a Savings Account or GIC. In today's low interest rate and higher inflation environment, you can be left with a false sense of security, like the guy with a bucket on his head! This is because after tax and inflation, you are actually in a worse position financially.Please reach out as I am happy to help you find a conservative investment “helmet” that will help you achieve your long term goals.
Thank you and stay safe and healthy!