We've all heard the phrase, “Be greedy when others are fearful, and fearful when others are greedy.” But what about being even greedier when others are greedy?!
As I sat peacefully in the hot tub recently, I began to recollect all the ways I wasn't greedy enough since graduating from college in 1999. If only I had been greedier, I could have been richer and living a more fabulous lifestyle today.
Alas, at 47 years old with two young children, my time for maximum greed is over. I had my chance of getting ultra-rich for 25 years, but I blew it by jumping off the corporate ladder in 2012.
Not Being Greedier Can Hurt Your Wealth Potential
Make no mistake, this idea of being even greedier when others are greedy is a bull market phenomenon. With practically every asset at or near all-time highs, it's hard not to lament about not taking more risks. In a bear market, the lack of maximum greed likely saves you from financial ruin.
We know that inflation and greed are the two biggest wealth destroyers. However, I’m not sure if people are taking enough risks with their one and only life. It’s very hard to get rich quickly without taking a lot of risk.
Surveying my friends who are rich, none of them got rich by buying index funds. Instead, all of them got rich by starting companies, investing in private companies that became successful, or becoming senior level executives.
Getting rich by 60 with a pot belly and grey hairs is fine. But if you want to experience financial freedom sooner, you must channel that greed into taking more risks. Let me share some of my regrets about being too cautious.
1) Took a job at Goldman Sachs in NYC instead of going to Shenzhen, China
After seven rounds and 55 interviews, I took a job as a financial analyst at GS in Manhattan. At the time, I figured I had gone through too difficult a gauntlet not to accept.
However, during the months of interviews, I was actually offered a job as a manager at an eyeglass parts factory in Shenzhen, China. This was nepotism at its finest because my father knew the owner, a businessman from Taipei, Taiwan.
If I had taken the job, my Mandarin would be excellent today. I probably would have had an ownership stake in the eyeglass parts business. And I likely would have built a deep roster of business connections in China that might have propelled me to a greater fortune.
Instead, I took the safe route by making a $40,000 base salary with a small sign-on bonus. I had always thought going to William & Mary, an inexpensive public college at the time, would allow me to take more risks compared to someone who went to an expensive private university.
Alas, I was too risk-averse because I simply didn't feel financially comfortable knowing we lived in a modest townhome and drove an 8-year-old Toyota Camry. If tuition was much higher, I would have felt even more compelled to take the safe job.
The wealthiest people in the world are entrepreneurs, not employees. If I had gone to Shenzhen in 1999, I might have found a way to be 10X richer than I am today.
2) Only invested $3,000 in a stock that went up 60X
In 2000, while sitting on the international equities floor at 1 New York Plaza, I came up with the idea to buy a Chinese internet company called VCSY. The internet was the future and so was China.
I bought $3,000 worth of stock out of the total $12,000 I had in cash. Then I shared my idea around the trading floor and it caught fire. At one point, my VCSY shares were worth about $170,000 after just three short months.
I ultimately sold my shares when they were worth about $150,000. However, if only I had invested $10,000 or $12,000, like many of my other analyst classmates did, I could have walked away with $500,000!
With $500,000 at only age 24, I think I would have been set for life. Why wasn't I greedier? Then again, maybe I would have blown it all on a fancy car and a bender in Vegas.
With Trump as the 47th president of the United States, there is an increasing likelihood of a “melt-up” in the stock market. As a result, you may want to be greedier with your stock investments, property investments, and career from 2025-2029.
3) Bought a much cheaper property than I could have in 2003
I ended up using much of the VCSY windfall to put 25% down on a $580,500 condo in 2003. This was the first property I had ever bought and I was nervous as hell. By 2003, I had seen the NASDAQ lose about half its value.
The thing is, after saving 100% of my bonus and 50% of my salary for four years, I had enough to put 20% down on a sweet $1 million, multi-floor condo with Bay views. It was a three-bedroom, two-bathroom place in Cow Hollow with about 1,800 square feet.
If I had purchased the more expensive condo, my net worth would be about $1 million higher today. Not only that, I would have lived in a great place for several years and rented it out for more income too. Never sell your rental property if you don't have to.
I wish I was less fearful as a 26-year-old and more greedy. I had career upside at that age, yet was too afraid given the aftermath of the Dotcom crash. The deli sandwich guy across our office kept telling me how he was worth millions and lost it all. I didn't want to end up making sandwiches if I got let go from Credit Suisse.
4) Not starting Financial Samurai in 2006 when I wanted to
In 2006 I had just graduated from Berkeley's Haas MBA program. I went part-time for three years because I was worried I'd get laid off given the collapse of the NASDAQ. I had applied in 2002. If I had gotten laid off, then I had the option of enrolling in the full-time program.
While in school, I took classes in entrepreneurship and marketing. I was inspired! I came up with the idea to start Financial Samurai, a personal finance site written by a finance veteran because I saw a hole in the market.
During this time, there was this 25-year-old guy in the Bay Area selling online courses on how to get promoted at your job. Yet, he only had one year of work experience or so. Then he wrote a book at 26 about how to get rich, while not being rich himself. And the public lapped it up!
Although it was obvious that most of his success was marketing given he lacked the experience, I didn't want to go that route. Instead, due to honor and pride, I wanted to wait until I had 10 years of experience before starting Financial Samurai. As a result, I waited until July 2009 to finally launch.
Too much pride, and ironically, not enough desire for money.
I've always believed that money is too important to be left up to pontification. But if only I had been greedier for money, I would have launched in 2006 without the necessary experience. Then I would have figured it out as I went along.
If I had launched in 2006, Financial Samurai would be a much larger and more profitable site today. Maybe I would have created online courses and written books earlier, which would have created a larger source of passive income sooner.
The problem I had in 2006 was I felt indebted to Credit Suisse for paying for 80% of my tuition. Hence, I decided to work as hard as possible in my career to “pay them back.” When you have a good-paying job, you feel less of a need to take on any entrepreneurial risk.
However, if I had been hurting for money, I would have started Financial Samurai sooner. Then I would have written a lot more and figured out ways to monetize the site more. I feel this to be true because the Global Financial Crisis finally jolted me to start.
5) Not buying more tech stocks in 2012 after negotiating a severance
In 2012, I negotiated a severance package that paid for five years of normal living expenses. I was thrilled as it felt like I had figured out how to win a lottery.
After getting laid off, I was eligible to collect unemployment benefits, which I did. And to be eligible to keep collecting unemployment benefits, I had to submit where I had applied for work every two weeks. So I decided to apply to every promising tech company in San Francisco: Google, Facebook, Apple, Airbnb, you name it.
Ultimately, I got zero offers. I'm not even sure I got an official interview. Undaunted, I decided to buy shares in each of the public tech companies that wouldn't give me the time of day. I figured, if I couldn't work for them, they would have to work for me as a shareholder.
I remember buying $10,000 in several tech companies as a token of my defiance. Then I built these positions up to around $25,000 each over the next one or two years. The thing is, I had a six-figure severance check, which I dumped 100% of into a Dow Jones Industrial Average structured note product with downside protection.
Instead, if I had the courage to invest all of it in Apple, Google, or Meta, I would be $750,000 – $1 million richer today.
6) Should have invested more in a venture capital fund in 2018
In 2018, I had the opportunity to invest $250,000 in a friends-and-family round of a closed-end venture capital fund. The fund was about 5X oversubscribed because a star managing partner had left his previous firm to join this new one. However, I had just committed a large amount of capital to a private real estate fund the year before. I was worried about overcommitting to illiquid assets.
It turns out this venture capital fund invested in Rippling, an employment management software company in San Francisco, at a $300 million post-money valuation in April 2019. In 2024, Rippling raised a round of funding at over a $13 billion valuation, or 43X higher!
In the end, I only invested $140,000 in the venture capital fund, leaving around $350,000 on the table. Ugh. It always hurts the most when the opportunity was wide open and you don't take full advantage.
Today, I'm investing six-figures in the Fundrise venture capital product, which owns some of my favorite private artificial intelligence companies. AI is our defining technology of our lifetimes, and I want to invest near the beginning for my children's sake.
7) Should have bought my forever home with a mortgage in 2023
In my monthly updated post, “How I'd Invest $250,000 Today,” I talk about how I'm a moderately conservative investor because I fear having to go back to work. If I have to go back to work before my daughter turns five, then I would have broken my promise of being a full-time father to both my children for five years.
As a result, I sold lots of stocks and bonds in 2H 2023 to pay for a new forever home in cash. In mid-2023, the S&P 500 had rebounded from its 2022 lows while the house I wanted had declined from its highs after 14 months. I also didn't want to pay ~$10,000 to get a mortgage and go through the difficult process of qualifying for one when rates were high.
However, in retrospect, I should have taken out a $2 – $3 million mortgage to buy my home. Yes, I'd have to pay $12,000 – $18,000 a month today, but my stock portfolio would be worth $500,000 – $700,000 more in this impressive bull market.
My only saving grace is that my house's price performance should have outperformed the Treasury bonds I sold to buy the house. Further, I think I'd face a lot of competition and get priced out if my house was relisted today.
Be Greedier In A Bull Market
If you want a chance at making a lot more money than your peers, during a raging bull market, be greedier when others are greedy. This means taking bigger positions, buying the dips, asking for bigger raises, and maybe even taking on debt to buy risk assets.
Bubbles often expand larger and for longer than you think. By adopting an optimistic and positive mindset during a bull market, you'll also feel mentally better. Psychologically, it's hard to be pessimistic during good times.
Of course, stocks will eventually pull back. A recession will come again. And yes, you will likely lose a lot of money when the economy does turn – we're talking 20% – 50% of your investment. Hopefully by then, you will also have a large enough cushion of gains because you've been so greedy for long enough!
Back To Reality We Go
This was a fun exercise, going through periods of time where I wish I had been greedier. The reality is, it's always easy to look back in hindsight on what should have been done for optimal results.
Having more money today would be nice. If I had been greedier, I wouldn't have lost my financial independence. Or maybe I would have simply bought an even more expensive house if I was richer, finding myself in the same situation as I'm in now. And if I was satisfied with the house that we had, I wouldn't need to grind my way back to FI.
I've been hurt too much by financial losses in the past to go all-in anymore. My fear is losing 50% and needing to make back 100% to get back to even. That could take forever, and at my age, I feel I'm running out of time.
As a result, I've been careful to avoid as many landmines as possible on my path to financial independence. But if I hadn't, maybe I would have lost a leg, but I would be millions of dollars richer today!
Trying My Best To Beat Back Greed
Now that the Fed is embarking on a multi-year interest rate cut cycle, my biggest concern is not being able to hold back my greed for more money. In a low interest rate environment, there are more opportunities to invest, work, and make a lot of money!
Trump's policies are generally good for investors and the economy. It’s hard not to want to pursue earning more money if taxes remain low too. As a result, if you're still in the capital accumulation phase, the time to be greedy is when there's deregulation and lower taxes.
Eventually, you will discover how much money you need to be comfortable. When you do, your greed for more money will naturally dissipate. In its place will be the desire for more time.
The Last Investment Driven By Greed And Fear
There is one investment that I’m not going to hold back on, and that’s investing in artificial intelligence. I’ve allocated $500,000 to the sector with the hopes of dramatically outperforming the S&P 500 over the next 10-20 years. So far, I'm about $300,000 of the way there.
There’s definitely a lot of AI hype now. So my hope is that by investing in diversified funds, I’ll increase my chances of minimizing losses and maximizing returns. I’m also dollar cost averaging over the next several years into Fundrise's venture product. This way, I'll be better able to ride out the cycle.
I fear AI will ruin the world for our children. Therefore, I'm investing today for them just in case there are no more good jobs in the future. If college is going to cost a ridiculous $450,000 – $750,000 for four years when they go, at the very least I can invest $500,000 in the technology today that might make them obsolete.
Fundrise is a long-time sponsor of Financial Samurai and Financial Samurai has invested over $270,000 in Fundrise so far.
I think this is the beauty of life, without being too cliche lol it’s often after we have experienced it that we think hmmm man had I just… but this is the fun part of planning your wealth and seeing the progress & trends you have taken so you can be better equipped in the future
Yes! I do think it’s fun to review what could’ve been. And hopefully through the review, we can make better choices.
Do you have any financial regrets? I’m hoping more readers will share there’s instead of only me. But maybe most people don’t have financial regrets and have made the optimal decisions all the time.
Everything you said is true in a vacuum, but what you can’t measure is what taking more risk at that time might have done to your mental and physical well-being. What you did, whether financial or job-related you did by taking your suitable level of risk at that time. Yes maybe you put all 10k available in that stock but then maybe your aren’t sleeping at night. Even more likely, maybe you sell at 20k (just a double) instead of 150k, since you were comfortable with the risk. Think about that!!
It is true that I could have set myself on edge 10 years ago buy putting every cent to my name into my companies restricted stock as a partner. It “cost” me 3 mill. It would have all worked out fine! Instead of a net worth today of 7 mill it would be 10 mill. But I have ABSOLUTELY no regrets. I would not have slept at night and may actually be dead now from the stress!
The other thing is the old adage of “you only need to get rich once”. When I bought into my company, I already had 3 mill or so in savings. It made no sense to put all 3 mill into the company because small companies do go belly up all the time. So I put in 2 mill (left me with a mill to fall back on if disaster). 2 mill became 7 mill – 3 mill would have become 10 mill. Some people in my company did and it worked out! just not in my DNA. No regrets!
Ash, but $10 million is so much better than $7 million! That’s eight figures! :)
I hear what you are saying. But man, investing $3000 in the stock is so nothing to me now. I wish I had the guts to invest at least $6000.
I too recognized some mistakes/regrets I made, but also good risks. A few stand out in particular:
1. after being laid off from my first job, I sold of a portion of my stock portfolio, even though I had enough cash to hold me over. If anything, I should have sold, after running out of cash.
2. during the pandemic, I was so focused on the doom and gloom news, that I had completely forgot there was a stock market. I realized my error in 2021 and resumed my contributions.
3. we took a big risk and bought a house in 2021 at 2.5% rate a year after having a kid, and just months after seeing many of my colleagues get laid off. Our house has since gone up 25%, not to mention the once in a lifetime interest rate opportunity.
4. I took a risky job and was eventually let go earlier this year. However, I gained valuable experience and was able to leverage my experience to change careers (something I had wanted to do, but just didn’t know how). I do much significantly less now, but I see it as yet another stepping stone. Also because of #3, I was more able to do this, financially.
Howdy Mike, I’m glad the house has worked out! Enjoy your new career. I wish I had a chance to change careers for 3-5 years. But I guess I did with writing and coaching HS tennis. GL!
I really don’t think you should be faulting yourself for not being greedy enough; Stephen Hawking once said that our species’s two greatest problems were greed and stupidity, and you have neatly evaded both by making decisions that were right for who you were at each time you made them. You have the life you wanted with your family, time, and peace of mind; do you really think making a big killing in real estate or making extra millions of dollars would’ve been worth losing the time with your loved ones? And what might’ve been the cost to others if you’d pushed your greed to its greatest extent? It seems to me that you did exactly what you needed to do, and you ended up with more than enough of the world’s goods to provide yourself and your family with a joyful life.
Thank you for your nice words. I do feel very lucky to be where I am, so I want to try and get back as much as possible through my writing.
Revisionist History is a funny thing isn’t it? We must do the best we can with information present at the time. If we think things through before deciding, we can minimize regret and better appreciate what we have today.
I know I wouldn’t trade the time I’ve had with my kids for any amount of money. I can’t believe time is going by so quickly. It’s actually kind of scary.
That’s what I thought: your ultimate value is time with your beloved kids! Each less-greedy decision you have made in your life added to your character, to make you the man you are, who is less greedy and more loving. BRAVO!
I think it is easy to be harsh on yourself when evaluating the quality of a decision based on the outcome. I read a great book by Annie Duke called “Thinking in Bets”. Annie is a professional poker player and author in cognitive-behavioral decision science and decision education. I bring it up because the book’s main takeaway is that one should qualify the quality of a decision based on the information one had at the moment the decision had to be made and not based on the final outcome. Give yourself some grace and have no regrets. At least that is my view. If you read the book by Annie let me know what you think.
Annie Duke is a fellow Portfolio Penguin author and I’ve read her book. Yes, it makes sense, but it’s also fun to reminisce and think of what could have been and what one could have done differently.
You may enjoy Buy This Not That: How To Spend Your Way To Wealth And Freedom, which is a WSJ bestseller. It talks about thinking in probabilities, not absolutes. I wrote it to be much more practical for some of life’s biggest decisions, not just theoretical.
Sam, I appreciate the follow-up. Yes, as human beings we often tend to think of the “what if I had …”. In my case: why did I not buy more NVDA when it was so “cheap”. Thanks for sharing the link to your book. I’ll take a look at it. Best, Juan
Sam, I’m curious when you’ll share your actual net worth with us? I know you don’t like doing it but I always wonder if you’re writing from the perspective of someone that’s accumulated $10M, $20M, or more! A while back, I was reading an article from years ago where you had shared your net worth and thought “wow” knowing how much real estate and equities in the public market have grown. But then I read this article and think it’s possible that I missed something! Anyway, I’m always curious, although I know it’s absolutely none of my business
Btw, to answer your question from another comment, I’ve worked at a big tech company for 10+ years.
Also, just another quick thanks for writing such entertaining and educational content!
Sure, I left my day job in finance in 2012 with roughly a $3 million net worth. For the last 12 years, between 98%-99% of my net worth has been invested in public stocks, tech stocks, San Francisco real estate, venture capital and venture debt. So it’s grown.
I think after leaving in 2012 with $3 million, it’s it’s unhelpful and distracting to keep highlighting and updating. I’ve found it actually makes a lot of people upset, which I don’t want.
My hope is that the quality of my contect can help as many people as possible to financial freedom sooner, rather than later.
Thanks for reading and sharing! And also, don’t forget to negotiate a severance package if you are leaving after so many years with the company! It is always awesome to leave with a nice parting financial gift. It will feel like you won the lottery again.
I agree with the article.
i frequently tell youngsters that saving is important but what you invest that saving is equally important and will determine if you have ” 3 million or 10 million” when you are 55 . This can help you decide on early retirement.
Personal finance is very personal and depends on your risk tolerance and investment objectives. What worked for a person at a certain time may not work for another person at another time. With agressive investment you may have losses like in 2022 or maybe one next year
In spite of all these it is good to stay on track . “ Time in the market is always better than timing the market “
Growing up in a financially conservative household, I have practiced being greedy. My parents were the kind to say “no” to seemingly worthwhile education opportunities that could made me more money or more fulfilled in the future: They preferred never lose money from their bank accounts.
First, I jumped from a seemingly mundane, repetitive but safe job to another more dynamic but less safe job over a decade ago. The less safe job paid 50% more than my mundane job. Also the less safe job opened up to way more opportunities that I’ve never experienced before. With the increased in pay, I stayed in the same apartment and saved up the differences.
Then with the savings, I bought my first condo with a 15% down payment 6 years ago. Some people said how I should not buy with less than a 20% down payment because of the extra mortgage insurance cost. I went ahead anyway by anticipating the future rent would be equal to my mortgage payments. My prediction about the rent for similar dwellings has become true.
I also exercised some options from a tech start-up I worked for a few years back. I put some “fun money” anticipating not seeing the money again. The start-up was sold to a well-established company in the field. I made 3x the money I put in. (Note: I advise people *not* to borrow money to exercise options because most start-ups would not end up going IPO or being acquired.)
If I didn’t take the first risk and any other risk, I’d be lamenting in the run-down apartment complaining why others being so greedy to grow their wealth while hating my job.
“If I didn’t take the first risk and any other risk, I’d be lamenting in the run-down apartment complaining why others being so greedy to grow their wealth while hating my job.”
Yes indeed. Psychologically, if one is too fearful when others are greedy and the bull market continues, it can really hurt your mood. And this sour mood will permeate to everything one does. Nobody wants to fall behind, let alone get left behind.
So one must measure that feeling and loss of getting left behind with the potential of losing lots of money when sentiment turns.
This week I completed reading “The Intelligent Investor”, that classic book by the ultimate value investor Benjamin Graham. Way, way in the back of the book, included in the appendix is a section titled “The New Speculation in Common Stocks” where Graham acknowledges that expected forward earnings are driving stock prices, and this section was written in 1958.
It is difficult to rely on good valuations to always come to you. Good companies can grow into their valuations and figuring which ones will do that is unfortunately partly guesswork. Against my best instincts, I have held my nose and started making small purchases of some of the Mag 7 stocks and chip techs. These companies did not seem like values back at when S&P was at 4000 and they are not values now, and perhaps will stay that way for a few more years. I have kind of given up trying to guess. I just want a small piece of that potential in my portfolio and I stopped waiting for the “all clear” signal. Thanks for bravely posting your purchases. This post may not age well. Who knows?
Yeah, it’s hard to invest just on valuations alone. If anybody invested just on valuations, they would’ve never bought Nvidia or Google and or Tesla over the past 10 years. And obviously, these dogs have done tremendously well since then.
I have change my investment philosophy in public stocks and private stocks to more of an asset allocation philosophy.
Never look down the road not taken! It is impossible to say what any one of us would have done under different circumstances along the way. Revisionist history is always perfect!
I was really enjoying the article until you reminded me about the 50% losses coming in the next major correction.
Indeed. There’s no free lunch! Everybody has to invest with the awareness that big losses could happen at any time.
Sam I love your work and I think you are so insightful on many topics and bring valuable, unique perspectives. However, for someone who literally worked in Asian equities for years I am often surprised that you don’t have a better handle on stock market valuations and how the stock market generates returns in the long run.
I think you absolutely made a sound decision buying your home without a mortgage last year. Yes, the stock market went up since then. But right now valuations are above the dot com peak in several parameters (price to sales etc). After 2000 the market returned -1% CAGR annually for a decade. Any gains since last year or further gains from here are just borrowing from future returns and lowering the expected return going forward. Equities generate real, after inflation returns from 3 sources: dividends, GDP growth and change in valuation. Dividend payouts are near an all time low (mostly since valuations are at all time highs). Expecting valuations to go up from here is like asking the blackjack dealer for another card when you have a 19. And growth is actually very stable over time and doesn’t change all that much.
Are you just a perma-bull that doesn’t like to think about the reality that peak valuations and peak profit margins will eventually mean revert and exert a gravitational pull on future returns? If you are that is fine and you are far from alone. I just think that, with all due respect, in this one area you might be doing readers a disservice. Of course I am speaking specifically about domestic stocks when talking about the nosebleed valuation levels.
Perhaps I’m giving off a “less than I know” vibe when I write about equities. I’m not sure. I can assure you that I have a deep understanding about the public equity markets. At the same time, I cannot predict with certainty where risk assets will go in the future, hence, caution and diversification.
Yes, valuations are high. The S&P 500 might trade at around 23X this year’s earnings. But if earnings growth continues, perhaps valuations are not as egregious. If geopolitical risk subsides and a wave of capital from China and India comes flooding into buy U.S. real estate, stocks, and other assets, maybe the stock market isn’t unreasonable. If the Fed cuts by 125 basis points to 4% by the end of 2025, and the unemployment rate only ticks up to 4.5%, maybe stocks are fine here. Nobody knows for sure.
What I’ve found is that bubbles tend to grow much larger for longer than expected. So I’ve given into this fact, with also the realization I could easily lose 20% – 50% of my investments in a downturn, correction, or bear market, as happened in 2022.
What I also know is that getting rich requires taking risk. And doing nothing or staying overly cautious over the long term will result in falling behind the average investor.
Can you share how you are currently investing and your investment / net worth structure? Are you mostly cash and have been shorting the market? If so, for how long? How would you proceed in this market today? I’ve already shared how I’d invest $250,000 today.
It’s always nice to understand the background of whom I’m conversing with. Thanks
That is fair, and I am not trying to say you are not educated on the market. It’s just that when the market goes up in the short term and the only reason for that is valuations going up, I am not sure what there is to get excited about. It is essentially noise.
I am not shorting the market, but I have the vast majority of my money not invested in US large cap stocks. My US portfolio is primarily in small value stocks, and much of it is invested in all other countries throughout the world, which are much more fairly valued or undervalued. I am heavily invested in equities. I own zero bonds, and all of my cash is for emergency reserves and short term spending needs.
I suppose we just have different styles. Sorry if I came across as too harsh or questioning your knowledge. By definition my style is contrarian otherwise it wouldn’t work in the long run, so sometimes I forget that fact. All the best and I hope you’re enjoying the forever home!
Given where valuations are, shouldn’t you be selling equities if you are heavily invested in equities and feel valuations are expensive? Personally, I try to stay consistent with my viewpoints and my actions. Otherwise, what’s the point?
Don’t worry about feeling you are harsh on me. It’s no big deal. I get much worse criticism all the time. At the end of the day, people will need to do what’s right with their own money. People just need to recognize the downside risks, and the consequences for their actions. And to blame nobody else but themselves.
How old are you and where are you on your financial independence journey? Are you retired or still working?
I have sold equities. I sold the equities that are very overvalued (US stocks) and bought some that aren’t (essentially all other countries’ equities aside from our own). My net equity position is unchanged. I am mid 30’s and still working. We should be FI within 10 years or less.
My position is always going to sound odd. By definition the majority of people are still heavily invested in US equities. That is how they become overvalued. For most people, especially those that aren’t very actively involved in their investments, it doesn’t make sense to sell anything (even if they are buying other types of equities with that money). It’s just when I see people pounding the table telling others that they should be backing up the truck at this current time to buy more of that asset specifically, I can’t help myself from questioning it.
It’s probably a “me” problem, and I wholeheartedly agree that everyone should do what they feel comfortable with regarding their own investments.
Cool. Yes, when it comes to investing articles and comments, most people will comment based on their own views and positions. So if an article goes against one’s views or positions, that I could sometimes feel like an attack. But it’s just a different point of view.
You may enjoy these posts on home country bias and international investing:
https://www.financialsamurai.com/home-country-bias-investing/
https://www.financialsamurai.com/international-stocks/
I’m always trying to learn become a better investor. I’m also trying to realize my blind spots so I don’t lose too much money. Currently, my eyes are wide open that valuations are expensive and a recession is probably on the horizon.
Thanks for sharing your other articles. I too am always trying to learn from others’ experiences and wisdom. As I have said, I think your insights and experiences on many different topics are immensely helpful to your readers, myself included.
If you are interested in reading more bearish (but very data centric) material on current valuations, I would recommend John Hussman. He is often labeled a permabear, but he has actually been bullish around market bottoms when valuations are pointing to normal or above average returns (which unfortunately has been rare over the past 30 years). Here is his most recent article:
https://www.hussmanfunds.com/comment/mc240721/
Sam is taking the alternative view. The default assumption is that people should sell stocks now, and be more cautious. I think Sam is just highlighting that these momentum trades and bull markets can last for longer than we think, and to consider the other side of pressing or at least staying the course.
How many times have we sold a Stock only for the stock to go much higher when we thought it could not go even higher? Too many times. It’s just hard to predict.
“But if I hadn’t, maybe I would have lost a leg, but I would be millions of dollars richer today!”
I think that’s the metaphor you need. Yes, you would be rich, but still missing a leg. And all the money in the world can’t give you your leg back.
I look at age the same way. We will be diminished in our capacities as we age and you have to account for this. But I’d rather be a millionaire with diminished capacities than not, as I will age either way. Both sides of the same coin.
Prosthetic legs are excellent nowadays though. The technology and comfort have really come a long way.
Hi Sam
There is no such thing as greed without cost or risk. Instead, there are trade offs. That is especially true with time vs. money.
I suspect you would not trade the time spent with your kids for anything. And if you had become an entrepreneur would you have met your wife?
It sounds to me as if you looked at each decision at the time with the best information you had and acted accordingly.
Nothing wrong with that!
Barry
Time definitely becomes so much more valuable as we age. As an older parent it breaks my heart when my kids say they don’t want me to turn older as my birthday approaches because they’re starting to realize I may not be around for later milestones in their life. As for money, I’m at peace with the state of my finances. I know I could have made more if I had done xyz in my younger years such as start investing earlier, been less conservative in my investment choices, etc, but would I really be happier today if so? Not necessarily.
I feel very content with my quality of life. What I don’t feel content with is time. I can’t do things as fast as I used to, I get tired much quicker, I forget things more easily, etc. It’s easy to let the swirls of day to day life and constant things popping up consume us to the point of frustration and unhappiness. It takes active mind control and being greedy with the time we have each day to feel at peace with time, something I am still trying to work on each day.
“I fear AI will ruin the world for our children, so I’m investing today for them just in case there are no more good jobs in the future”
I had to giggle at this. By investing in it, you also play a role in accelerating that “ruining” of your children. No?
But, of course, even if you don’t invest, others will. It is a Catch-22.
A good read. Thanks for the post.
(BTW, just curious: How rich is the owner of that eyeglass factory you mentioned nowadays? Is he a multi-billionaire?)
If you can’t beat them, join them. If AI is going to crush our children’s future, you might as well try to benefit before they are crushed. I’ve had this philosophy with every company who has rejected me over the years as well. Just buy them.
I’ve also bought the healthcare companies that charge me ludicrous premiums. UnitedHealthcare has been one of my top performers for 12 years :)
I’ll have to check if the eyeglass parts factory owner is now a billionaire. Oh man, he could be!
How about you? Any areas where you wish you were greedier?
I have the same battle with AI. I have fears regarding the future of AI, and yet I have invested in the Fundrise venture capital fund (through your link to support you).
But to quote your reply to someone else’s post:
“Personally, I try to stay consistent with my viewpoints and my actions. Otherwise, what’s the point?”
Wouldn’t you tend to agree that a fear of AI while simultaneously supporting AI is straying from consistency between viewpoints and actions? I ask not to call you out, but because I’ve felt this cognitive dissonance myself.
Maybe. My view is that given I can’t beat AI, I might as well join them in helping destroy my children’s occupational futures. If AI does do so, it will have done so with or without my investments.
A big part of me hopes the worst doesn’t come true, and AI will be an amazing technology that boosts jobs, cures diseases, and makes the world a better place. So in that sense, I’m happy to invest as well.
I’m excited about the Fundrise venture fund. I expect new funding rounds or IPOs to revalue higher most of the existing positions over the next 24 months, especially given public tech and AI companies have done well since these private company’s previous funding rounds. But of course, there are no guarantees. Thanks for the support.