A friend posted this on Facebook and I thought it was a very useful quote. As a matter of personal philosophy I believe that investors have a much better chance of portfolio success once they figured out what makes them tick, what is really important to them.
We all know people like whom the Dalai Lama is referring to or maybe we have been that person or maybe we still are that person. Often in this context I have quoted our friend Bill from here in Walker (Bill is not my neighbor with the backhoe, that is someone else) in saying that you can figure it out now, or you can figure it out later but you'll be much happier if you can figure it out now.
One simple example of this might be figuring out that instead of an $8000 (net) monthly lifestyle happiness and fulfillment can be had for $4000-$5000 per month instead. There is nothing that says an $8000 income (just an example) must result in an $8000 lifestyle.
This can lead to a readjustment of how much risk needs to be taken in the portfolio while still accumulating and then in retirement. Using the 4% withdrawal rule as a benchmark a $1 million portfolio should be able to generate $40,000 but if a $1 million portfolio only needs to generate $30,000 then perhaps fewer chances need to be taken. Contrast the $30,000 to $50,000 coming out of a $1 million portfolio which probably means having to take more chances with the portfolio. If possible I'd rather take fewer chances (obvious statement).
On an unrelated note I found a curiously titled post at Seeking Alpha; How I Morphed Into A Dividend Zealot. It captures how one investor started out seeking capital gains. He then went on to describe his transformation--his word. To read the congratulatory comments I think the idea of a religious type of devotion stands up--I believe it is correct that I am the one who coined the term dividend zealot. My own preference is to avoid that sort of devotion.
6 comments:
I dig your comments about happiness and fulfillment for less $, but if you're responsible for a spouse and children who are not onboard with that philosophy...what are you gonna do? Being a man means divorce and abandoning children are not an option.
This is not the same as choosing your spouse wisely, but everything to do with evolving life outlook.
Strategic excesses aside, it sounds like Morph Guy is an example of someone who did figure himself out. Too many of us, myself chief among them, are strategically agnostic, worshiping at the church of whatever is working now.
Love the quote, Roger.
Great quote from a great source.
Another cool quote from a guy i work with "Keep your debt low and your skills high".
By the way, is the etf still on track for a spring/summer'ish debut?
Just my opinion but your obsession with the whole "dividend zealot" thing, as well as farmland, is borderline unhealthy.
Dividend stocks are the way to go in the current environment. Whether you call it zealot or just smart investing, in a long term secular bear market the best way to invest is low PE high dividend stocks
According to Time, happiness caps at 75,000/year or 6,250/month. It's nice to know there's a happiness/wealth correlation cap, but I still think the Dali Lama says it best.
Socrates also has a nice word on the matter:
"He is richest who is content with the least, for content is the wealth of nature."
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