One of the key ways to FIRE is to save and invest aggressively. You've forecasted your misery, therefore, you know that by the time your misery becomes a reality, you'll have invested enough money to retire early and break free from the grind.
Obviously, if you don't forecast when you'll be miserable, you're probably not going to invest aggressively today to have the optionality to break free in the future. As a result, you'll just end up bitter and angry at life, turning to internet forums or social media to vent your frustrations about how life isn't fair.
The thing is, we all know life isn't fair. Everybody starts with certain advantages and disadvantages. It's up to us to figure out how to make the most of what we have. Learning how to become a competent investor is key for financial freedom.
Investing Is Always About Understanding Your Opportunity Costs
Since mid-2025, I've been itching to buy a new car to replace my 2015 Range Rover Sport. When I bought the car for $60,000 after taxes in December 2019, I set out a goal to own it until it turns 10 years old, and buy something new. 10 years is a respectable amount of time to own a depreciating asset. And after 10 years, surely, there are more safety features as well.
However, I faced an opportunity cost on whether to spend a seemingly ridiculous $120,000 out the door for a brand new version of my vehicle. Spend $120,000 and gingerly drive a fresh-smelling car where I'd be too afraid to park at the grocery store due to the dings, or invest $120,000 of that amount in my children's 529 plans and custodial investment accounts.
What was more important? A new car I don't need, or fund my children's investment accounts to provide them insurance in the bleak future when no jobs are available due to the AI takeover?
Obviously, when I frame it this way, investing the $120,000 is a far easier decision. Who wants to have disillusioned kids who feel like losers because they can't find a job after college and must live back at home with us? The $120,000 could turn into $350,000 in 15 years. Therefore, investing more than the gift tax exclusion amount is the way to go.
So I thought it would be healthy to provide more examples of how easy it is to convince ourselves to invest aggressively, instead of spend.
The Math Is So Obviously On Your Side, It's Almost Embarrassing
Before we get into more stories, let's talk about why investing aggressively is the closest thing to a cheat code that exists in finance. And no, this isn't some get-rich-quick thing. This is just history.
Bull and bear markets: a brief, humbling history
Since 1928, the S&P 500 has gone up in roughly 73% of all calendar years. You win almost three out of four years just by showing up. People drive to Las Vegas every weekend with worse odds (<50%) than that and feel lucky.
Here's how bull and bear markets have historically broken down:
Bull markets (sustained gains of 20%+):
- Average duration: about 4.4 years
- Average gain: roughly 150% from trough to peak
- Longest run: the 1990s bull market, which lasted nearly a decade and returned over 400%
Bear markets (drops of 20%+):
- Average duration: about 9.6 months
- Average decline: roughly 33% peak to trough
- Worst modern example: the 2007-2009 financial crisis, down about 57%
So the typical pattern is: endure about 10 months of pain, then enjoy 4+ years of gains.
Stock market crashes feel catastrophic while happening, and they look like minor blips in hindsight.
- The 1987 Black Monday crash: -34% peak to trough. Recovered within 2 years.
- The dot-com bust: -49%. Brutal if you owned internet / tech. The S&P took about 8 years to fully recover.
- The 2008-2009 financial crisis: -57%. The worst since the Depression. Recovered by 2013.
- COVID crash (Feb-March 2020): -34% in 33 days. Fully recovered in 5 months.
The median bear market decline is around 30%. That sounds scary until you realize the median bull market return is over 100%. You're giving up a dollar of temporary pain for two or three dollars of eventual gain. Every single time you panic sell, some calm person on the other end of that trade is thanking you.
The hardest part of investing isn't math. It's psychology. It's convincing yourself not to do something stupid when the news is screaming that the world is ending. The people who stay invested through downturns are the ones who end up wealthy. The people who sell and “wait for things to calm down” are the ones who end up bitter, posting on Reddit about how the market is rigged.
Invest through the bear markets and the dips. Invest when you're scared. That's when the real compounding begins.
Invest Aggressively Or Suffer Through Years Of Micromanagement And Humiliation At Work
Let's say you work in the international business arm of your company that sells products into Asia. You're Indian American based in San Francisco and the VP of Sales into India. It's a pretty darn good fit as your product is expanding rapidly.
However, the Senior VP of Global Sales is a 60-year-old white guy based in New York City. He's on your ass every morning, sending you emails at 5 a.m. expecting you to respond within 10 minutes with updates on how the throughput numbers are going. He then expects a full report of what you did for the day before you go home. The micromanagement is intense!
Then one summer, the Senior VP decides to fly out to San Francisco to visit you and the troops. Instead of giving an encouraging pep talk like William Wallace does in Braveheart before battle, he waves you over to stand next to him. Confused, but excited, you think you're going to get some type of public recognition for all the hard work you and your team are doing.
Instead, the Senior VP starts mocking you in an Indian accent by saying you need to do a better job connecting with “your people.” He calls you “Abu” instead of your real name, Nilesh. And then begins to talk about how filthy New Delhi was when he went to visit the office, and how he was scammed into buying a silk carpet that wasn't silk at all.
The entire time, you just keep your mouth shut and bear his bashing of Indians and the country, which is supposed to be embraced as the biggest growth driver of your business.
Screw This Guy! Time To Save And Invest More
He chalks things up to “cultural differences” but you don't give a crap anymore. The disrespect has gone too far. You decide right then and there you've had enough of his microaggressions. As a result, you vow to max out your 401(k) and boost your saving rate to 50% so that you can break free within 5 years, instead of 10.
You pray to goodness that the Senior VP gets outed for some type of office indiscretion beforehand, and gets fired. Screw that guy!
Let's see, freedom from a terrible boss in 5 years or spend more money on expensive watches, fancy dining, luxury cars, and private school tuition. The choice is obvious. Freedom in five years for sure! You decide to not only stop buying wants, you sell your timepieces and downgrade your car to a Honda Civic. You then pull your children out of $45,000 a year private grade school and send them to public school.
You've suddenly gone from saving and investing $50,000 a year to $100,000 a year. Further, you've cut your expenses by $100,000 a year as well. FIRE in five years is all but an inevitability.
Invest Aggressively Or Watch Your Ex Win
You're 38, recently divorced, living in a one-bedroom apartment in Austin. Your ex-wife got the house. Not because she deserved it more, but because your lawyer was hungover during mediation and you just wanted the whole nightmare over.
She remarries within 18 months. Some beefcake named Brad who sells commercial real estate and drives a lifted F-250 with a $1,000/month car payment. You see the wedding photos on Instagram because you forgot to unfollow her sister.
Now here's where the story splits.
In version one, you respond by leasing a BMW M5 for $1,100/month, buying a Rolex Stainless Steel Daytona for $21,000, and taking a girl you've been on three dates with to Paris because you want to feel like the man. You are Brad, just with fewer Instagram followers.
In version two, you take one look at Brad's smug face in that wedding photo and decide, quietly, rationally, and with complete clarity, that the best revenge is being free. You move your saving rate to 45% and max out your Roth IRA. You decline brunch, stop getting bottle service, and start cooking at home four nights a week. 100 pushups and sit-ups after dinner becomes your routine.
Meanwhile, Brad is doing what Brads do. He's leasing a boat he can't afford. Overextending on a vacation home in Scottsdale. Financing furniture. Buying rounds for people he barely knows. Commercial real estate commissions are lumpy, and Brad spends them like they're guaranteed. He's not building anything. He's performing wealth.
You're Financially Fit In The Future
By the time you're 44, your investment accounts cross $2,000,000 and are compounding fast. You've paid off your car. You've also met someone extraordinary, not because you were trying to impress her, but because you were living with intention, and that kind of quiet confidence is magnetic. She has her own 401(k), her own savings rate, and her own opinion on index funds versus active management. You two argue about Roth conversions and it feels like foreplay.
You work because you want to. Brad, on the other hand, is about 30 pounds heavier, stretched thin across two mortgages, and fighting with your ex about money every other week. The marriage held together by joint HBO passwords and resentment is starting to fray. Turns out financial stress is the number one cause of divorce, and Brad never met a dollar he didn't immediately spend.
You don't even think about Brad anymore. But when you do, you smile.
Come Up With Your Underdog Narrative
I understand it's hard to delay gratification and make sacrifices for financial independence. Life is short, and we want things now.
To overcome the YOLO mentality, you need to come up with an underdog story and believe it. It doesn't matter how prosperous you get. Always believe your underdog story if you want to stay hungry.
Here's what I sometimes tell myself to commit more capital:
- I did mediocre on the SAT, so I'd better invest in bright founders with high test scores and fancy college degrees who are smarter than me.
- Despite writing about FIRE since 2009, I hardly get credit for kickstarting the modern-day FIRE movement. If recognition isn't coming, more capital has to.
- As a public high school and college graduate, I don't have the installed base of powerful connections to advance. So I need to work harder to build relationships and gain access to tier 1 venture funds.
- With two kids of small stature, they're unlikely to get recruited by top high schools and colleges for sports. So I max their 529 plans and custodial accounts to make sure they have options when it matters.
Your underdog narrative doesn't have to look like mine. It just has to be real enough to sting a little. Find the chip on your shoulder, and put it to work.
You Don't Invest Aggressively Because Life Is Too Good
Not having advantages in terms of abilities, intelligence, skill, or identity can actually be a gift. Given your disadvantages, you rationally end up saving and investing to one day give you and your children the advantages you never had.
But thinking you have advantages is also a dangerous place to be. It's precarious. You can lose them quickly through a sudden layoff or accident. Maybe the next political party that comes to power deems your group to have too many advantages, and sets up gates accordingly.
The one consistency in life is change. So it behooves you to save and invest as aggressively as possible for yourself and your family. Because once your passive income covers your desired living expenses, life takes a huge step up in quality.
Micromanager pissing you off? See ya later. You negotiate a severance and take a lower-stress job because your rental portfolio is generating $50,000 a year in net income.
A colleague got promoted and rubs it in your face by writing platitudes on LinkedIn? Good for them. They still have to show up on Monday. You don't.
Kids get rejected from every top 50 university despite great character and top grades? No worries. They can go anywhere and still pursue their passions because they've got a $500,000 investment account behind them.
Invest Before You Spend
Investing aggressively should be your default setting, not something you get around to after spending. In any given year there's roughly a 73% chance the S&P 500 goes up. You win almost three out of four years just by staying in. People go to the casino every weekend with far worse odds and feel like high rollers.
So the next time you're torn between investing and spending on something you don't need, think about the opportunity cost. Think about Brad, 30 pounds heavier, stressed out living paycheck to paycheck. Think about the boss who called you by a different name and made fun of your accent. Think about the bear markets that lasted 10 months and the bull markets that ran for years right after.
Once you sit with it long enough, investing aggressively stops feeling like a sacrifice. It starts feeling like the only rational move.
Readers, is investing aggressively each year your default setting? If not, why not? Why don’t more people invest aggressively for their future when doing so can lead to more options, more freedom, and less stress? Aren’t those outcomes worth investing for?
Track Your Finances To Invest More Aggressively
If you want to invest more aggressively, you first need to know where your money is going. Empower offers free financial tools to track your net worth, monitor cash flow, and analyze your investments all in one place. I’ve used their dashboard since leaving my day job in 2012, and it remains part of my regular routine.
If you have over $100,000 in investable assets, including savings, brokerage accounts, 401(k)s, IRAs, and other accounts, you can also get a free financial check-up with an Empower professional. It’s a no-obligation review designed to uncover hidden fees, allocation gaps, tax inefficiencies, and missed investing opportunities.
The more clarity you have over your finances, the easier it becomes to invest with confidence and build more freedom.
Here’s a post sharing how my free Empower financial review went, along with a current giveaway of my signed bestseller, Millionaire Milestones, once you complete yours.
Most folks should be able to find real chips on their shoulders just by examining their lives. Supporting a deadbeat family member? Co-worker unfairly promoted? Someone ding your car? There’s plenty.
And bad bosses usually aren’t bad people, but man do they make it so important to get the eff out when you can! Really, bad bosses pushed me into saving more/finding a way out.
My wife and I save about 50-60% of our income now. I wish I’d done more earlier in life (chip). Stayed in market through the busts but never really capitalized on the troughs and we are still ok. I retire in <2 yrs. but could walk away if I wanted to – just want the full pension. For me, the most important part now is communicating to my kids to suffer some (maybe a lot) now for rewards later.
Great article- I came to FIRE mostly thru MMM, but I have stayed because of you. I appreciate the writing and perspectives you provide. I think more folks do than you know. I share your articles all the time. Even when I disagree (getting rarer as I get older ;).
Staying until the full pension is a no brainer. Congrats on almost being there! I’d prep for what to do next. There is often a big let down after retirement.
MMM guest posted on FS back in 2011, a couple years after FS launched. It helped him get on the map. He never returned the favor. That is life. It was tempting to just write about budgeting and living frugally off $30,000 a year to grow and connect with a larger number of people. But it wasn’t a lifestyle I wanted to live, so I had to stay true to myself.
Great article maybe cathartic for some & with diminishing returns. We have several friends who have been financially devastated by divorce & the Brad factor entering the frey especially when children become pawns who subsequently suffer emotionally & psychologically for years. Few recover from the emotional &/or financial toll & rarely seek professional advice.
We have held it together concentrating on our 40+ yrs of ‘aggressive’ hands-on RE investing. Yet everytime we learn of another family breaking up, losing a sibling to drugs or an abusive relationship we just want to HUG our kids for their support & the peace of mind they have always given us.
40+ years is an impressive run. Yes, I agree with you about the children, and think about their well-being often during times of conflict. Gotta hold it together, at least for the first 18 years of their lives, right?
I love the chip on the shoulder, even when things are going well. That’s a must! Even if it’s fabricated like Michael Jordan used to do. Whatever works.
Another good article to keep us focused on the long game. We are always hearing the term “uncertainty” in the markets. I wish people would just realize that pretty much everything is always uncertain which is why you get a return in the first place. Also, I think the term “risk” is used too much and confused with volatility. These are very different things. I’m sitting on some good 5 figure gains when I got aggressive with some tech names from the most recent mild selloff that aren’t necessarily core holdings. The gains from the last few weeks in these names are enough to pay for all 3 of my high school kids tuition for the 26-27 school year. I’m really tempted to take the short term win for this, much because of your influence. While not exactly tax efficient, I don’t think I care when I’m able to pay a bill such as this with what feels like a gift from the market. I’m also still shopping for my vehicle that matches the 1/10th salary guideline. Thanks Sam!
Those sound like some massive gains!
You can never lose if you lock in a win.
Happy car shopping!
I really liked the bull/bear market visual with the blue and yellow percent returns by market category until I thought about it a bit more. I think it is a bit deceptive. For instance if you glance at the “2.5 years -49%” followed by the “5 years +101.5%” the natural response is okay nice I’d be way up the odds are way in my favor.
But of course percentages don’t work like that — if you did lose 50% then make 100% you’d be back to break even after that 7.5 year period and probably have less purchasing power due to inflation.
I still of course think the conclusion drawn is a correct one even if the chart is perhaps unintuitive to analyze well.
Great article Sam! I am sharing with my adult, and nearly adult, children.
Great!
Great article. It’s hard to go aggressive when we read of so much disruption and global tensions and indeed change, but it’s also the best thing to do. I don’t drive so don’t worry about cars, but how soon do you replace things like your smart phone?
I replace my phone every 4 to 5 years on average. It’s the product I use the most so actually you should probably trade it every two or three years.
But after two or three years, it always still feels new so I don’t bother. It’s a pain to swap it as well.
“Marriage held together by a shared HBO password”. “Index vs. Active Managed fund debates that feel like foreplay”. That’s too funny. I’m not used to laughing out loud reading about Personal Finance. There’s an episode on St. Denis Medical (Season 1, NBC) where they make fun of a FIRE nurse who’s eating old bananas. But, the end of the episode shows his computer screen with a $4+ mil investment account balance. Love the Article Sam!!
Glad you had a good laugh! Old bananas… bleh. Life is too short for that!
On paper, I don’t think you’re wrong, I think sometimes though we need to evaluate the priorities that make sense for our individual situations.
I save 20 percent of my check right out the gate. It goes directly to a Roth account and doesn’t include the 5 percent match from my employer. I’ve developed a healthy savings, enough to furnish an emergency fund and have a healthy start for a down payment should I decide to buy a home again after my divorce. In a potentially reckless move, I have a very small amount in bonds. I am almost entirely invested in stocks, because at 43, I think I still have plenty of runway to catch up later. So far, my strategy has been a profitable one. Dips in the market don’t scare me.
That said, I want to learn to play the piano and bought a midi keyboard for almost $1,000. Could I have bought a smaller model, even an older model, for less? Sure, but why should I? I want the model that is going to work the best with my screen reading software. I don’t want to make sacrifices, because it’s not as if I’m starving for money. Similarly, last December I dropped a little over $2,000 for a fully specked laptop. I got it on sale and came with three years worth of on-site warranty. Could I have spent less? Sure, but considering how much time I spend at my computer, I don’t see the error in wanting to extend my dollars for something that will last. I’ve developed a similar attitude about clothing. I don’t need the current season. I don’t chase fashions, but if I can guarantee longevity for a few extra dollars, bring it on!
I’m pretty aggressive about my investments. I’m also interested in enjoying the fruits of my labor. I work more than one job so I can live comfortably. Being blind, I understand better than most that nothing is guaranteed, but if I live my life with both feet in the future, I’m always going to feel like I need to keep running to stay caught u p.
Thanks for sharing. I hear you on getting a nice laptop as well as mine is small and only has eight gigs of memory which is causing a lot of shutdowns and slow lags. I need to get a new one with at least 16 gigs of RAM.
Do you mind sharing more about your blindness? What type of issue is it, what is your best corrected visual acuity and what are some of your favorite tools and apps to help you work?
Thx
Related post: https://www.financialsamurai.com/treat-yourself-to-a-luxury-expense-to-make-investing-worthwhile/
I LOL’ed so hard. Sam for President! Who’s with me?
Enjoyed this post Sam. Especially the part about “Brad.” I recently got some pushback for making similar observations on my own site.
It can be tough watching people close to you make financial decisions you don’t agree with, and even harder to know how (or if) to say something about it.
-Chris (just-cg.com)
Sam: an excellent piece with many real world points articulated. Just staying in the game with intention is key. Love the chip in your shoulder idea. Many of us have used this to our advantage.
Making smart financial decisions has such a direct impact on our lives and those in our family. I’ve found that the hardest part isn’t always understanding what to do, but getting comfortable with the level of risk it takes to actually build meaningful wealth. This article really resonated with me because it highlights how discipline and consistent investing matter far more than trying to perfectly time the market or play it safe forever.
Over time, I’ve started to realize that being too conservative can quietly become its own kind of risk especially when inflation and missed opportunities compound against you. It’s a good reminder that building a better future can sometimes requires a bit more courage and conviction than we initially think.
“Bull” and “Bear” market – it doesn’t matter how often I look these terms up, it’s never indexed in my brain and I often forget which is which :) . I wish people could use Up/Down market, as its intuitively easy to remember.
A question for you about investing: have you played around with AI tools to ask for personal investing advice, given one’s entire portfolio? There is the common worry about too much PII being sent, but personally I’m thinking that the benefits might exceed the risk.
Are you aware of any robo-advisers that use LLMs for this purpose? As far as I know, Empower and Monarch( I use the latter, but previously used the former), do not provide this kind of service.
Ride the bull, get torn up by the bear.
I’m sure all robo-advisers will be implementing some AI to their models eventually.
Moral of the story, don’t be Brad.
:)
Great post Sam! Here’s some personal reflection that might add perspective about the power of diversification. During the Dot.Com crash, I was a fledgling investor and had bought Cisco at its peak (among othestocks like home.com that disappeared entirely). I got hammered pretty good. But here’s the thing: My wife and I had also put a down payment on a coastal California bungalow a few years earlier during a major trough in the housing market. I won’t tell you that was by design on our part, just lucky timing, and it was still the only house we could barely afford. Even though we got hammered in the stock market, we scored huge in real estate. We sold that house in 2004 after owning it for 10 years. The appreciation by then was staggering. We sold it for 3.5x what we paid and a 10x on the down payment! We parlayed that into a larger house (we had 3 kids by then) in a different state (much lower housing costs), bought a small rental property, and started a business in 2005. A few years later, the housing market crashed. We were kind of freaking out about how much our rental property had crashed, but we didn’t panic sell, we just held on for a few years. Also, I was convinced (incorrectly) that the market was going to keep going down, and I didn’t re-invest for several years (a mistake in retrospect). But, by then the business (my main gig) was starting to take off and we were doing fine. Only about 15 years later, the funds we secured by selling the California house, paid huge dividends. The rental was paid off (80% through rental income), the family home was paid off, and we sold the main business for probably about a 8x over the initial investment (which includes how much I lost in salary by having about 3 lean startup years). That was enough to semi-retire a few years early at 57 and fully retire by 59. The point being that even though there were some major financial punches to the face (to paraphrase a Mike Tyson quote), we had enough of a plan to outlast some of our bad decisions, and some of our good (and sometimes lucky) decisions really paid off in the long run. We’re trying to teach our grown kids that long-term vision, which is a challenge for young people sometimes, because they lack the direct experience of a long time horizon. We all do until we can look back 20 or 30 years and realize what really happened.
TW – Thanks for your description of your journey. While we all have our paths that can be different from yours, and each others, the overall theme is so powerful.
I’m 62 (retired at 58), got hit hard in 2000/2001 and again in 2008/2009, but here I am WAY ahead of where I originally projected. That “looking back 20-30 years” is so much affirmation of what Sam said in his post.
And congrats to you and your family for building something special (some “luck”, but also just discipline and long-term thinking)
Thanks for sharing your journey. And congrats for making it!
Bubbles and pops will happen again. Diversification as wealth grows is so important.
I often look back and wish I was more aggressive.
Thank you for this post! It’s one of your best in my opinion! The market is not a casino it’s a wealth building tool along the same lines as personal savings rates and spending on education. Everything you mention here is doable for anyone/couple who have a decent income and want to kick their savings and investing into high gear. Thank you!!!
You’re welcome! Thanks for reading and sharing.