Wealth In The Modern World - Deepstash
Wealth In The Modern World

Wealth In The Modern World

Investing is about 9 percent theory, 1 percent execution and 90 percent emotion management.

Not everyone becomes a multimillionaire, at least not in the short run. The good news is that there are a lot of financial opportunities in the world, and it is possible to build wealth using public markets as a long term investment. Investment requires managing our emotions, and not to be bogged down by the ups and downs of the volatile markets.

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MORE IDEAS FROM The Stoic Path to Wealth: An ancient investing strategy for the modern world

No matter how little you earn using income-generating skills like writing, speaking, coding or managing, you can get started with investing by simply earning more than your expenses.

One needs to focus on the income-generation part and create value out of nothing, using one’s skills.

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Stoic investors make smart, balanced bets. Most of us invest in secure funds with low returns. Investors looking at bigger returns opt for index funds. If you are okay with losing money, that does not mean that you should.

The 90/10 investing thumb rule states that we should put 90 percent of our money into stock investments in index funds with moderate to high returns. The rest of the investment money should be used to speculate on the short-term risks like currencies, Bitcoin etc, that offer a high upside.

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We all have loss aversion, preferring to avoid losses even with the opportunity cost of gaining profits. Losing money, in fact, is a necessary rite of passage that most are not okay with.

The best investors are the ones losing money, but who are smart enough to never lose more than 10 percent of their investment by applying diversification and other investment philosophies.

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Stoicism is a life-survival strategy, a way to protect one’s sanity while facing the ups and downs of life. It helps us focus on what we can control and to let go of the stuff we cannot control.

While not many are aware of this, stoicism embraces money and wealth, and advises a person to make money with honesty, dignity and trustworthiness.

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Deepstash helps you become inspired, wiser and productive, through bite-sized ideas from the best articles, books and videos out there.

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RELATED IDEA

How you can invest in yourself

The foundation for every personal pursuit in life is to invest in yourself. It can take years. How you can do it:

  • Learn to build something. If you can create something valuable with limited resources, you can create value.
  • Learn a rare and valuable skill.
  • Build a network of people who are doing well in life.
  • Save enough money to live on for at least six months.

A good supply of ideas is the first pillar of wealth building.

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How to Build Wealth: This Chart Tells All

As the chart shows, if you want to build wealth, there are really only two things to get right:

  • Increase the difference between your income and expenses
  • Save that difference and grow it exponentially over time

That’s it.

This chart shows you exactly how much you need to save, and the rate  you need to compound it at, in order to reach your goals!

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Jamie DIMON, CEO OF JP MORGAN

”Investing should be a permanent thing. Save, invest. Save, invest. Guessing at market tops, market bottoms – that is a complete loser’s game. I’ve never seen anyone win at it. The smartest investor in the world, Warren Buffett, would say that is not the way to invest.” 

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