Ignoring the Finance Bros
I just celebrated a four-year anniversary working with a specific client. A single woman who is now in her early 30s. In one of our first few coaching sessions, I walked her through the key principles of investing:
Broad U.S. stock market index funds
Low fees
Disciplined contributions
Don't lose sleep
Be very patient
She loved the simplicity of this approach and latched on quickly. Early on, we set up automated contributions to her investment accounts, and she's never thought about it since.
Some of my favorite memories were when she would come into a coaching session with stories about how her guy friends would boast about their investing prowess and make fun of her approach to investing. Or in her words, they "mansplained" it to her, as she rolled her eyes telling me the story. These types of stories would persist for the coming years, always revolving around their investing advice, stock tips, and more boastful tales.
I know exactly what she's talking about. No, I don't actually know these particular guys. But I know lots of people like this. They are commonly referred to as "finance bros." They've taken a few finance classes in their college years, got lucky with a few stock trades (ignoring the many other losses), and now prop themselves up as investing gurus.
Whenever my client told me these stories, my message was the same: "Be patient. You'll get the last laugh. The truth always prevails."
While together recently, she and I logged into her investment account to see her performance: +13.6% per year for the last four years. Not too shabby for her only spending five minutes per year on her investments (and practically no time thinking about it). 13.6% per year.....from someone who knows very little about the stock market. That's the power of doing things the right way.
I really wish I could have a beer with her finance bro friends to see what their investments have looked like over the past four years. Having spent enough time with the finance bros in my life, though, I have a feeling it's not a pretty sight.
Simple is good. Steadfast is good. Consistent is good. Broad is good. Cheap is good. Zero brain damage is good. 155 years of black-and-white history is good. I'm so glad my friend ignored all the finance bros.
____
Did someone forward you this post? We're glad you're here! If you'd like to subscribe to The Daily Meaning to receive these posts directly in your inbox (for free!), just CLICK THIS LINK. It only takes 10 seconds.