Not-Invented-Here-Bias

Last week I wrote about expensive Mutual Funds / Unit Trusts and their cheaper (and better) alternatives called Exchange Traded Funds (ETFs).

You still don’t buy it.

Ok, that might be my fault because I am simply not convincing enough that passive, systematic, repeatable investment strategies are the best option for the majority of investors.

Or, maybe you could be suffering from the “Not-Invented-Here-Bias”:

Someone tells you that a Regular Savings Plan in a few broad based and diversified INDEX Funds (not one of those underperforming overcharging Mutual Funds or Unit Trusts, but an ETF) is a sure thing in the long run.  You, however, believe that kind of dollar-cost averaging is boring and that you are better in selecting your own hot and exciting stocks to invest your money in, not realizing that the purpose of investing is not to minimize boredom; it is to maximize returns.

RSP not Excitement

An experienced (= older) friend of mine once shared with me that my resources can be wasted, used, or invested.  The last option is of course the best, but it’s often the hardest because it requires long-term thinking and willpower for delayed gratification in the face of short-term “demands”.

We are totally aware of this, but not doing it might still bring more excitement to the one or the other.

Keep it simple and don’t shy away from copying what has proven to work.  Even if it sounds too simple to you.

The beauty of a simple investment plan is that it can allow you to reach your goals and live your life.

Years back I regularly had to remind myself that investing for the long run does not have the goal to bring me excitement or entertainment (there are other less costly entertainment channels available).  Its simple goal was/is to provide me with enough money further (much further, think 20+ years) down the road, so that I can finally focus on more important things than money.

Like the fundamentals of happiness; including things like close relationships with other people, health, a chance to be creative, and helping others.

And above all, step one in your search for happiness: continually working towards having control of your schedule and what you do with your time.

Because wealth is nothing without meaning attached to it.

 

“It is very simple to be happy, but it is very difficult to be simple.” — Rabindra Nath Tagore

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