For true happiness and bliss in most areas of life, I believe we must do more subtraction than addition.
Sure everything in life has trade-offs and nothing will be completely wonderful all the time but within investing to family time, two areas of life we should prioritize at every stage, rebalancing less in oneâs portfolio and appreciating the simple adventures will leave you more satisfied in the long run.
Having more kids can be a true blessing or not. Throughout life we go through challenges to see whatâs on the other side. If you soon find out years in you canât keep up with 3 screaming toddlers, you canât back out at that point.
Everything is relative.
What works for someone else may not for you.
But at the end of the day, having more junk doesnât help anyone. It causes more problems and more upkeep that people choose to deal with. Just like with anything, more of anything is dangerous thatâs why moderation is key.
When it comes to investing, historically, passive investing beats out active investing by a landslide.
Why?
Because the more you tinker, play and gamble, the more mistakes and money you loose. Itâs just like with an art piece. Your gut will tell you when itâs complete while there will always be a voice in your head telling you to touch up a corner or add more color to this side which ends up ruining the painting!
It can drive you stir-crazy just like retail investing!
As tempting as it may be to want to control everything, check the daily highs and lows of your picks and scroll through your Reddit feed, you are better off letting your money sit and wait. It will work for you and do its thing. I promise. And it will leave you better off to be able to enjoy more family time, stash away more cash on the sidelines, take less Advil for those gambling headaches and have more peace of mind.
Less to More
I encourage those who feel overwhelmed and trapped in their budget to reassess their lifestyle and environment. As many of us who were fortunate enough to have the luxury of WFH in 2020 and till today, we easily spent 80%+ of our waking hours in our sanctuary and without proper allocation of our resources, we can go hay wire. With no boundaries from the kitchen to zoom classroom to bedroom, no one can productively work for long, at least for me. I work at my best when I have what I need at my dispense, no distractions and less clutter.
Our environment is everything and taking care of it is more important than you may believe. Itâs usually in the small details that count. From a few missed problems on a test to tidying up a dust filled space, removing all annoyances and little errors possible will clear your head and let you rise to your element.
After all, the quality of your mind is your life and in the financial world, quality over quantity is applicable.
Another tactic to lessen the burden of stress, feel more content and in power of your spending habits besides following the Mari Kondo way is to adopt certain habits of the minimalist stealth wealth lifestyle. It doesnât hurt to live below your means and showing off rarely gets you anywhere.
Plus when you have less to show off and less junk to upkeep, you can appreciate the irreplaceable things in life such as family, friends and prioritize health which cannot be replaced.
With more money, you donât need more things. It wonât bring happiness as researchers and economists have discovered long ago. Resist the urge to buy materialistic things to fill a hole you need to work on yourself. Fulfillment is a process and challenge you must tackle day in and out not throw at with your earnings and it never gets easier. Staying happy is a choice no one can serve you.
Minimalist Treasures
When you hold off on accumulating more and really value each purchase, you start to take notice of what really matters. Not only that, a major upside is that in the meantime you end up saving so much without feeling like itâs any work at all or even better not having to be a slave to the office.
Your savings naturally skyrocket when you save more and your overall take home pay rises because of it. Saving is easier than earning for most. Itâs 100% in your control if you arenât a business owner.
Even better, when you save more, you can invest more and one day have your investment earnings surpass your active income to hopefully retire early. Not something I personally recommend at age 60 or less as retirement isnât as glamorous as you may think nor considered a âfreeâ time as it is the most expensive period of your life yet once again, itâs all relative and maybe someoneâs ultimate dream is to live on an island at 29.
As a rule of thumb, if you do decide to live off your investment income and say sayonara to the corporate world, make sure your investment returns surpass your active income by at least 10â30% for the next consecutive 5 years or else youâre surfing in very harsh Hawaii waters which you can test out once you get past the breaking point.
As a minimalist myself, I live by the mantra, less = more. They say our environment defines who we are and I believe it really does. If I invite you into my home, immediately upon walking in you will notice everything is to be found. What does that mean? If I need a special pot to bake soufflĂŠ once a year, I will find it in a jiffy or if Iâm going to an event and need a specific dress to wear, I know exactly where to snoop in my closet.
Everything in my home has meaning and is actually useful. Similarly to my investment strategy, I have short and long term goals that are concrete and specific. I have an exit strategy if a correction by 10% or more hits which is known to happen every 1.8 years and know if I canât explain a company or a strategy in a simple sentence, I wonât invest in it.
In my home there are no collectibles or random furniture that I purchased just because it was on sale at West Elm for 5% off. I have fresh fruit on the counter at all times because I believe in a healthy, organic, and mindful lifestyle that keeps me me. I have coffee table books that I like to pick up when feeling bored rather than a TV and plants that light up the room when itâs sunny.
Of course not everyone is like this nor owns things that have practical everyday purposes. We collect so much in our lives like that extra blanket or message chair we donât really need yet still convince ourselves we can make use out of after one-time use. Believe it or not the average American owns $4k and counting worth of junk that can be sold, reinvested and put to better use!
As stocks tend to increase 10% on average each year, you couldâve earned thousands on that invested capital by now if you had the guts to sell and go through your stuff.
Less = more is underrated and most people cannot comprehend or apply it in most areas of life where it tends to work best. We believe that new bag will cure our depression or what she has we must get so I can get on the same playing field as her.
Comparison is truly the theft of joy and believing you need more will never get you to a better place.
Believe it or not, having less will make you more.
The only exception is with cash.
20% is the recommended allocation in your portfolio at all times according to wealthy investors.
Why is cash so powerful you may ask?
Just look at the top 10% and above. They stash the most cash in their investment portfolio, roughly around 5% and 25% for emergencies in order to take advantage of opportunities in the market when they are presented.
What if an incredible deal comes on the market or something happens? We never know but cash is the ultimate best friend, tool to jumpstart a deal and build more wealth.
Cash isnât just for the bad times. Itâs necessary for those who want to get ahead the hidden unique way.
Memory Lane
There were countless times in my life when I wished I had a little less with more. Ironically most of these situations involved either people or food, lifeâs pleasures and necessities.
Quality Over Quantity
I believe we shouldnât count how many people we know. That is strange and unnecessary. The number doesnât matter, the quality of the relationship does. Yet as a youngster, I was naive and did just that. I ended up being obsessed with having exactly 52 friends in MS that it got overwhelming and by the time HS rolled around, I had no one to contact because no one knew me well.
âKeep your friends close and your enemies closerâ is a strategic saying. Too much of anything is a bad thing, especially with people. Of course itâs great to know more people than less yet having bleak relationships with all of them wonât propel you to get anywhere. They must know you pretty well to help you in some special circumstances.
After all, itâs not always about what you know, but who you know to propel you further. Dig into developing 2â3 or maybe I shouldnât count at all this time, relationships so they can keep you afloat when you need them.
Never network when you need to.
As my father used to say, a network is an insurance policy money cannot buy. I takes little to no effort to keep in touch with people.
Spoiled Milk
My friends and I enjoy going out to eat at our favorite restaurant, Carbon in NYC whenever someoneâs birthday to special event/gathering rolls around. On May 20th was my friendâs last day of college so we celebrated and went. I donât know if itâs just us or honestly seems like it is with everyone, but we tend to overestimate how much we should eat.
The problem with restaurants youâve never been to before is that you donât know the portion sizes. That is a key element to staying on track with your budget and not stuffing yourself. Since we know Carbonâs menu by heart and portion sizes and FYI they are known to be small like in Italy, we know what to expect.
Rule of thumb, never be HANGRY before grocery shopping or before a meal at a restaurant. By the time you sit down and order, it can take forever. It should be an experience not a full-fledged Thanksgiving. You can get that at home.
That day we ordered a bit too much, too many appetizers and one of us is opposed to leftovers.
Not sure why but everyone is different and has our own quirks right?
PS: It wasnât me.
As a frugal minimalist Iâm all for reheating leftovers and and adding my own spin to the dish to call it my own! Eventually, the bill hit us and also the extra leftovers that we were strangely saddened with. It was a bizarre feeling. By the time the main course rolled in, the appetizers left us stuffed and at that moment we decided for our next gathering, weâre going to Farmerâs Table instead!
You may or may not have experienced this at a restaurant or with something else in your life before.
If we get used to something or have excess of it, we want less of it and it actually ends up working against us like working out the same muscle returning no results. Just like in the market, past performance isnât indicative of future results. Donât go overboard or follow just one type of advice all the time.
Enjoy everything in moderation and every single bite.
You arenât as hungry as you think.
Savor donât assume.
These are one of the most recent occurrences that lead to less from more instead of more from less. If I established a few true connections early on in MS or ordered less food for the table, we wouldâve been more satisfied and grateful for what we had.
Just like money can mess with our heads, our decisions with it can be detrimental. Take inventory of what you have and what you need.
Most likely what you have is what you want already.