Feeling Some Regret Over Conservative Approach to Finances

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Escapevelocity
Posts: 603
Joined: Mon Feb 18, 2019 8:32 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Escapevelocity »

Yes, there are two paths you can go by, but in the long run
There's still time to change the road you're on
jackb1117
Posts: 53
Joined: Tue Mar 19, 2019 1:47 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by jackb1117 »

quadog wrote: Sat May 08, 2021 8:15 pm OP, I’m not positive if I see a question in there but I’ll give it a go. You might be a candidate for a barbell strategy. For example, I know of someone who holds both TIPS and *gasp* bitcoin. They also hold 5% of their net worth in cash and *gasp* 20% in a single stock that is up over 3000% the past decade. The point is that a person can be both conservative and loco. People are complex. It’s OK to color outside of the lines of 60/40.
I read every reply in this thread and this one makes the most sense to me. I'm just entering the back half of my 30's and starting to see folks who swung big and hit a home run (crypto, highly leveraged in real estate before the latest run-up, etc) and have some FOMO, but at the same time know that (imo) I am on the surest path to where I want to go.

I've kept my core holdings in a very boglehead way, but used slightly more than play money to mess with some tulip bulbs, if you will. I hold some crypto, 'meme stocks' and the like- if they go to zero then I'm fine as the bulk of monies are in an appropriate AA, but enjoying the upside and conversations with friends about the wild west even if they are much more exposed than I am.
typical.investor
Posts: 2757
Joined: Mon Jun 11, 2018 3:17 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by typical.investor »

Escapevelocity wrote: Sat May 08, 2021 8:54 pm Yes, there are two paths you can go by, but in the long run
There's still time to change the road you're on
And in the tree by the brook there is a songbird who sings “sometimes all of out thought are misgiven“

And it's whispered that soon, if we all call the tune
Then the piper will lead us to reason.

I.e. listen to Bogle and not FOMO. Outsized risk is a stairway in the whispering wind. A stairway to heaven perhaps, but ... I always saw Bogle looking at fundamentals to determine a reasonable expected return and perhaps it is a stairway to the basement.

Takes your risks judiciously!
User avatar
HomerJ
Posts: 16735
Joined: Fri Jun 06, 2008 12:50 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by HomerJ »

mrspock wrote: Sat May 08, 2021 5:05 pmIf your friends haven't made behavioral mistakes, and they took more risk, it's a pretty natural outcome they will wind up with more money than you.
It's not just behavioral mistakes. Sometimes more risk means more actual risk - sometimes you lose money no matter how strong your stomach is.

You buy a house to flip and discover mold throughout and the foundation is in bad shape, and suddenly your riskier move doesn't automatically show up with a higher reward than boring old index investing.

Buying a single stock can pay off and make one rich, and sometimes it can go zero, and you lose everything.

And it has nothing to do with behavioral mistakes. Don't fool yourself that just being tough and being able to handle risk is enough to always win.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
User avatar
mrspock
Posts: 1650
Joined: Tue Feb 13, 2018 2:49 am
Location: Vulcan

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by mrspock »

HomerJ wrote: Sat May 08, 2021 10:30 pm
mrspock wrote: Sat May 08, 2021 5:05 pmIf your friends haven't made behavioral mistakes, and they took more risk, it's a pretty natural outcome they will wind up with more money than you.
It's not just behavioral mistakes. Sometimes more risk means more actual risk - sometimes you lose money no matter how strong your stomach is.

You buy a house to flip and discover mold throughout and the foundation is in bad shape, and suddenly your riskier move doesn't automatically show up with a higher reward than boring old index investing.

Buying a single stock can pay off and make one rich, and sometimes it can go zero, and you lose everything.

And it has nothing to do with behavioral mistakes. Don't fool yourself that just being tough and being able to handle risk is enough to always win.
Fair point, but if we are being fair to real estate flippers, but we need to consider the entire “time series” (sorry I’m an engineer) of house flips not just the odd one they have bad luck. These will be balanced out by home runs.

For both types of investing it’s critical you can stomach the ups and downs.

Your overall point is well taken though. It’s one reason Buffet hates that volatility is equated to risk — on its face this is pretty absurd concept if it’s not well caveated. I can have two investments, one which has low volatility with an overall trend downward to 0 and one with high volatility with an overall upward trend, and the claim is the investment with less volatility is lower risk.

In Buffets view, the one where you don’t wind up eating cat food and living in a box is the lower risk investment.
Vanguard Fan 1367
Posts: 2084
Joined: Wed Feb 08, 2017 3:09 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Vanguard Fan 1367 »

I watched my parents pay 20k for a house that 35 years later they sold for 250k. So I invested in real estate and missed much of the bull market starting in 1982. The real estate lost money.

So my investing success took off with John Bogle style investing.
John Bogle: "It's amazing how difficult it is for a man to understand something if he's paid a small fortune not to understand it."
N.Y.Cab
Posts: 118
Joined: Wed Feb 07, 2018 8:46 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by N.Y.Cab »

I think that savings rate is much more important than asset allocation in building wealth. You can play around in Portfolio Visualizer to see how much impact it has over time assuming you can contribute and rebalance regularly instead of buy high then sell low at the wrong time.

https://www.portfoliovisualizer.com/bac ... ation2_3=0
Last edited by N.Y.Cab on Sun May 09, 2021 9:45 am, edited 1 time in total.
User avatar
alpenglow
Posts: 1250
Joined: Tue May 31, 2011 12:02 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by alpenglow »

It seems that there are a lot of FOMO related posts on Bogleheads lately. I wonder if this is indicative of where we are in the market cycle? TBH, I have some moments of FOMO too. It is hard not to looking at crypto and such. Those feelings pass quickly when I look at the bigger picture. I am reaching my financial goals with the AA I've chosen (67/33 at the moment). That's really all that matters to me. I don't care how much my friend, cousin, or neighbor has (supposedly of course, because talk is cheap). So, are you on-track to reach your goals? If so, you are fine. Ignore the noise.
User avatar
markjk
Posts: 196
Joined: Wed Oct 07, 2020 6:01 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by markjk »

If it keeps you invested, it's the right thing for you. This is not a point in time thing. You have decades and decades ahead of you. You need to do what is going to keep you invested for the long term. Forget about today's frothy investment environment. Right now it seems everyone is winning. That will come to an end soon. It always does.

Your AA is a bit conservative for your age, that's true. But, it's a personal thing and you made the call. You've definitely done well over the past decade so celebrate the progress to this point. Don't get into comparing to others. It's a dangerous game and might cause you to do something that doesn't fit your personality and ultimately sets you back when (not if), the markets all collapse again in the future.

With all that said, you could certainly adjust your AA a bit now if you feel like you can handle that next downturn. Research shows going with an 80/20 stock/bond allocation would get you pretty close to 100% stock returns but with a bit less volatility. You still have a ton of time in front of you so you could consider this move.

No matter what you do, keep in mind you've done great to this point and you are well ahead of most of the population. There will always be someone out there doing "better" than you. They either really are (good for them) or they only talk about their wins and none of their losses so it's a perception thing. Regardless, your goals are what matter. Not comparing to others. Keep that in mind and it will help you stay on track.
User avatar
nisiprius
Advisory Board
Posts: 43781
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by nisiprius »

One of the most difficult emotions to control in investing is regret over the road not taken.

The point is that there is no way to avoid it. No matter what you do, or did, there was something different you could have done that would have made you more money. Not just a little more money, much more money. Things that were within your reach. Things that you even remember considering.

For example, I've always been a fan of Apple's products, bought my first Mac in February 1984 (one month after introduction). After going through a terrible period around 1996, Apple seemed to be on the right track a few years later when Steve Jobs took over, and on 10/5/2000 I bought 40 shares of AAPL at $22.1875/share--wow, that's exactly 22-3/16ths, weren't they fully decimalized then? and paid $887.50 plus (of course) $29.95 commission.

My diary entry says:
Rationale: Gambling. I think Wall Street probably overreacted because they dislike Apple… at a P/E of 12 and $4 billion in cash I think Apple will probably come back.

Intention: Hold about a year and wait for recovery. “Double or nothing”—if I lose it, I’ve lost it. If it goes up significantly, take my profit and run.
In March of 2001 I decided that was about as much "recovery" as we were going to see and that I would quit, being almost back to even.

Image

As things continued for the full year I felt I'd done OK. Even for the next several years. But, of course...

Image

If I'd "simply" held on--and after all it wasn't as if $887 was all that serious money--today I'd have $300,000. Heck, even if I'd lost my nerve and sold at the bottom in 2008, I'd still have $6,000.

What can you say? It's ridiculous to say I feel nothing at all about missing out. But things like that are absolutely inevitable and you mustn't fall into the trap of processing every decision that, in hindsight, could have turned out much better and considering it to be a "mistake." Even the big ones, like staying conservative enough to hold on through 2008-2009 and 2020.

As I say, I was and am an Apple fan. I attended Worldwide Developers' Conference in 2000 and heard Steve Jobs' keynote. I was a True Believer. So to everyone who says, in hindsight, that it was obvious that Apple was going to succeed and that it was foolish not to hold on to the stock, I insist that, no, it was not obvious. Any more than it was obvious that Osborne would fail.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
User avatar
markjk
Posts: 196
Joined: Wed Oct 07, 2020 6:01 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by markjk »

alpenglow wrote: Sun May 09, 2021 7:03 am It seems that there are a lot of FOMO related posts on Bogleheads lately. I wonder if this is indicative of where we are in the market cycle? TBH, I have some moments of FOMO too.
I absolutely think it is. Stock markets and real estate are at all time highs. Alternative investments like crypto which you mention are all over social media, the news, SNL, etc. It seems like everyone is making money. But, as it it always does, that will come to an end at some point. Those with a plan and solid allocation along with the emotional balance to ride the downturn will come out ahead as usual. Those who panic sell will set themselves back decades. It's a cycle that occurs over and over and over and over ......
Joylush
Posts: 53
Joined: Fri Jun 05, 2015 7:47 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Joylush »

Do you know how many people over extended themselves in real estate and regretted it? Tons.

It’s not as easy as it sounds. I’m a landlord, have been since 1986. You have to know what you’re doing and a great deal involves timing. It’s not a get rich quick endeavor. I’ve met far more landlords who would never be landlords again than those who would. I have done quite well with my real estate investing but I don’t know that I wouldn’t have done almost as well sticking to index funds which would have been far less work.

The fact that you have a well thought out plan and are saving for your future is mire than most people do. Many would look at my current portfolio and think I hold too much cash. What your friends did may or may not have been smart. There is most certainly some luck involved.
User avatar
LatentStoic
Posts: 22
Joined: Sun Jul 29, 2018 10:28 am
Location: Midwest USA

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by LatentStoic »

Bogleheads Class of 2020 retiree here, and a not-small reason for that result was my late-1990s reading of Jeremy Siegel's "Stocks for the Long Run," among other books in the BH canon.

Even so, germane to this discussion, I do still have strong, uneasy memories of 2008, my own conclusion being that it was NOT inevitable that the US economy and stocks would recover as well - or at least as relatively quickly -- as they did. It seems that if certain (further?) policy mistakes had been made, we could have been looking at a decades-long US market recovery back to the prior high, comparable to the Great Depression aftermath. (I believe it was the early 1950s, before the pre-1929 crash market high was reached?)

There was the anecdote of one very high ranking legislative branch official, getting on bended knee to "beg" a very high ranking executive branch official to promptly agree to the 2008 bailout proposal then on the table. What might have happened if action was not prompt then? (And, known only with hindsight, "correct" action?)

For me anyway, that is a haunting memory that I respect, whenever I contemplate my AA and investment / distribution plan.

(Edited once, to fix grammatical error.)
"Our stay-put behavior reflects our view that the stock market serves as a relocation center at which money is moved from the active to the patient." - Warren Buffett 1991 shareholder letter.
jumppilot
Posts: 286
Joined: Wed Jan 12, 2011 12:38 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by jumppilot »

dcw213 wrote: Sat May 08, 2021 5:49 pm Thanks for the replies and I agree with a lot of the sentiment being expressed which is why I felt compelled to post. I don't think it is as much envy as it is doubt in my own convictions validated by seeing other close acquaintances and friends do well (and I am happy for them).

I know how you feel. For awhile I had a mix of stocks and bonds, because that’s what you’re supposed to do, right? Have an asset allocation?

It finally clicked that I have years until retirement so I might as well be 100% stocks in my retirement portfolio. As a previous poster said, my losses are just cutting in to my previous gains. My IPS says when I turned 50 I’ll move a year of expenses into bonds/cash and increase that bucket every year until I have 5 years of living expenses in a mix of bonds/cash.

As for housing, I also collected rentals by moving out and up. But I always wanted to own my residence and not rent. I need a place to live anyways so I wanted to be part of the ownership class. 20 years later my real estate portfolio is about equal to my retirement portfolio - and they are all on the market.

Buying a house and investing in stocks is a “thing” because it works. Perhaps your friends weren’t living it up as much as you thought.
NotWhoYouThink
Posts: 3365
Joined: Fri Dec 26, 2014 4:19 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by NotWhoYouThink »

Live by the sword, die by the sword.

People who make huge gains taking risks won't sit on their piles of money, they will take more risks because they have learned they are good at it. For a few, that will continue to work. For most, they'll eventually crash and burn. But you may never hear about that.
User avatar
Bulldawg
Posts: 528
Joined: Mon Jan 05, 2009 8:30 am
Location: Hotlanta

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Bulldawg »

OP :

It probably hasn’t occurred to you that you likely have friends /family/colleagues who desire what you have : a sleep at night , long term investment plan . Recall what Taylor has reminded us about the many roads to Dublin.

It doesn’t necessarily have to be a one-way approach either . I’m at 50/50 allocation now at age 60 , but own a small business and real estate investments . Stay or find what works for you in both bull and bear markets .
" IN GOD WE TRUST " ( official motto of the United States )
GP813
Posts: 40
Joined: Wed Dec 11, 2019 10:11 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by GP813 »

Nobody brags about losing money!

Just remember that when you feel FOMO.

Even in this bull market there have been losers, people who looked for short term gain and chased marijuana, energy, penny stocks, the crypto coins that did nothing, the next big biotech have all gotten burned to some degree. There have also been those who pulled money out of the stock market in 2011, 2015, 2020 and subsequently missed proceeding large returns.
tim1999
Posts: 3889
Joined: Tue Dec 16, 2008 7:16 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by tim1999 »

nevermind
Last edited by tim1999 on Sun May 09, 2021 12:54 pm, edited 1 time in total.
New Providence
Posts: 555
Joined: Fri Mar 27, 2020 7:10 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by New Providence »

I'd take moral issues out of the equation. Investing, including leverage, is a financial tool not a moral one.

Some are comfortable with risk and leverage, some aren't. Neither is good or bad. Each market participant bears the consequences of their approaches.

Examine your own mission statement, not the others.
Dave55
Posts: 1162
Joined: Tue Sep 03, 2013 2:51 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Dave55 »

abuss368 wrote: Sat May 08, 2021 8:10 pm
dcw213 wrote: Sat May 08, 2021 4:13 pm I began my career in 2006 and was emotionally impacted by the events of 2008. I followed the advice of family and conventional wisdom at the time and invested 100% equities once I started accumulating money. While not much money in hindsight, the 50% haircut was devestating for me and I promised at the time to find my real AA. I landed on 60/40 plus an EF of 1.5 years expenses and have maintained since.

While this has certainly helped me sleep well at night I am now seeing friends and acquaintances come into wealth by doing things that are acceptable from a societal view on risk but not my own. I have to admit I am feeling some regret and a pull to loosen up on my conservative views.

I got off to a very fast start to my career and was way out ahead of the pack for a while in terms of wealth accumulation. Lately I have caught up with friends who have shared shocking stories about how much they have made on real estate and their 100% equity portfolio. I'm talking folks that made a few million in 5 years by acquiring properties and going all in on stocks in their 30s.

I think it is really the real estate that bugs me. These folks over extended themselves for homes they could barely afford and then moved on and up and accumulated rentals along the way. I thought they were crazy and they are now cashing in. I always rented cheap places and it is tough seeing those that lived it up now being rewarded for it to such an extent.

I know these things are cyclical and I am not getting too caught up in FOMO but I am feeling feelings like "why not lever up/borrow and live it up like they have been doing". COVID and the fragility of life and the system may be contributing to these feelings.

Just sharing some of my personal finance thoughts. Probably a sign of a top that I am feeling this way as I have been very set in my views over the last decade plus.
2008 was incredible. US pulled back. International pulled back even worse.

Stay the course with the asset allocation that is best for you. Hold enough in Total Bond and place the rest in Total Stock. Years from now you will be pleased.

Tony
Tony are you giving $$ advice again? I thought you were overwhelmed managing your $5 Billion portfolio? :moneybag

Dave
"Reality always wins, your only job is to get in touch with it." Wilfred Bion
User avatar
abuss368
Posts: 25019
Joined: Mon Aug 03, 2009 2:33 pm
Location: Where the water is warm, the drinks are cold, and I don't know the names of the players!
Contact:

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by abuss368 »

Dave55 wrote: Sun May 09, 2021 12:53 pm
abuss368 wrote: Sat May 08, 2021 8:10 pm
dcw213 wrote: Sat May 08, 2021 4:13 pm I began my career in 2006 and was emotionally impacted by the events of 2008. I followed the advice of family and conventional wisdom at the time and invested 100% equities once I started accumulating money. While not much money in hindsight, the 50% haircut was devestating for me and I promised at the time to find my real AA. I landed on 60/40 plus an EF of 1.5 years expenses and have maintained since.

While this has certainly helped me sleep well at night I am now seeing friends and acquaintances come into wealth by doing things that are acceptable from a societal view on risk but not my own. I have to admit I am feeling some regret and a pull to loosen up on my conservative views.

I got off to a very fast start to my career and was way out ahead of the pack for a while in terms of wealth accumulation. Lately I have caught up with friends who have shared shocking stories about how much they have made on real estate and their 100% equity portfolio. I'm talking folks that made a few million in 5 years by acquiring properties and going all in on stocks in their 30s.

I think it is really the real estate that bugs me. These folks over extended themselves for homes they could barely afford and then moved on and up and accumulated rentals along the way. I thought they were crazy and they are now cashing in. I always rented cheap places and it is tough seeing those that lived it up now being rewarded for it to such an extent.

I know these things are cyclical and I am not getting too caught up in FOMO but I am feeling feelings like "why not lever up/borrow and live it up like they have been doing". COVID and the fragility of life and the system may be contributing to these feelings.

Just sharing some of my personal finance thoughts. Probably a sign of a top that I am feeling this way as I have been very set in my views over the last decade plus.
2008 was incredible. US pulled back. International pulled back even worse.

Stay the course with the asset allocation that is best for you. Hold enough in Total Bond and place the rest in Total Stock. Years from now you will be pleased.

Tony
Tony are you giving $$ advice again? I thought you were overwhelmed managing your $5 Billion portfolio? :moneybag

Dave
Priceless Dave! :sharebeer

Tony
John C. Bogle: “Simplicity is the master key to financial success."
Mr.BB
Posts: 1639
Joined: Sun May 08, 2016 10:10 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Mr.BB »

How did you feel about your AA when the market dropped 20% in the fall of 2018 and 35% in 2020?
If you felt good about your AA and how it helped minimized your losses, then you are fine. You don't get to fish in two financial ponds at the same time.
Run some financial calculators. Are you on track for your long term goals? If yes, then you are fine. If no, then re-evaluate your AA.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
User avatar
Kenkat
Posts: 7358
Joined: Thu Mar 01, 2007 11:18 am
Location: Cincinnati, OH

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Kenkat »

Tingting1013 wrote: Sat May 08, 2021 8:13 pm
dcw213 wrote: Sat May 08, 2021 8:00 pm
Tingting1013 wrote: Sat May 08, 2021 7:36 pm Your issue is that you felt superior to them. You were not superior, and you still are not superior.
I have never felt superior at all. I have questioned their decisions and actions over a decade long period based on what seemed to be consensus that was reached post crisis (don't over extend and live within means). Now I am seeing that such actions taken in the immediate wake of a global financial crisis have paid off well. I am questioning whether I should join them and take more risk that be partially (if not largely) shared by "the system" (referring primarily to mortgage or home equity debt).
It is too late for you. The time to take risks is at the bottom of an economic cycle (I.e. exactly the time that you turned conservative), not at the top of one.
I think this hits on an important point which is you have to know yourself, accept that, and play to your strengths.

I’ve always been what I consider a solid “B” in life. There’s always people smarter, who make more money, who are better than me on the basketball or volleyball court, better looking, etc. But when I look at it all, I think I’ve done pretty well given who I am.

I have always been a bit of a contrarian and so my value/small slant and holding some things that are out of favor have been a benefit. And I do pretty well with sticking to my guns so I don’t switch in and out of investments very often - close to never, really. I’ve made my share of money on these two things.

I am analytical but probably not a visionary when it comes to investing. When Apple launched iTunes and I got a my first iPod, I thought wow, this is really cool. When I started ordering stuff from Amazon in 1999, and eBay in 2001, I thought wow, this is really cool. When my kids got interested in crypto mining in 2014-2015, I thought wow, that’s interesting.

Did I buy Apple stock, or Amazon, or eBay, or crypto when it was all cheap? No. And sometimes I can’t help but to think “stupid, you are stupid, think how much richer you could be”. But - it’s not me; it just isn’t. I’m the solid B, remember? And that’s ok, it really is.

During what feels like crazy times in the financial markets, it is really hard not to feel like you are doing something wrong. I am feeling it right now. But the winds can shift quickly; I know some people in the home building industry and in 2008/09, some of them lost everything. Other more conservative ones shut down, had a survival plan, and didn’t.

2008/09 was a test for many people. I feel like I passed that test as I stuck to my plan. I didn’t go “all in” and so passed up some riches, but again, that’s not me, it just isn’t. I’d figure out what type of investor you really are. If it’s 60/40, there’s nothing wrong with that. Everyone questions if they are aggressive enough when markets are at all time highs and people are getting rich with moonshots. It’s a long journey, though, and it is critical is to avoid a fatal mistake, either by taking on too much risk for you or making major behavioral errors. Play to who you are and your strengths and you will end up in a good place overall.
supalong52
Posts: 436
Joined: Tue Feb 09, 2010 1:51 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by supalong52 »

Why don't you set aside 5% of your portfolio for more aggressive plays, e.g, Bitcoin, Tesla, etc. that way you can at least lessen your fear of missing out. Most Bogleheads are content to match the market, knowing that they won't make a killing or underperform. Many learned about BH after winning and losing big in prior bubbles, e.g., dotcom, 2007 housing bubble, etc. I personally committed many behavioral errors, and staying the course takes such errors out of play, or at least minimizes their effect.
nguy44
Posts: 367
Joined: Sun Jul 09, 2017 1:52 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by nguy44 »

To the OP, always remember that you will always hear of the successes but almost never hear of the failures. Your post reminds me of the 2006-2007 era when about a dozen of my friends got into day trading. I recall one social event with them talking about how successful they were doing with it. The 2008-2009 came a long. Suddenly all but one stopped talking about it, and that one admitted their losses - fortunately they were wise and it was a very small part of their portfolio. About half of the folks had things happen (losing their homes, divorce, etc.) that I believe was impacted by their day trading failures.

You can make a lot in real estate, but I always felt one have to have the "blood" for it. The risks one has to take are ones I am not interested in taking. More power to those who take those risks and do well.

The other perspective is that many will think 60/40 is too risky and will not even attain what you have attained. It is always important to look at the big picture. I am retired now, but during my working years I stayed out of real estate and my asset allocation started at 90/10, was around 60/40 when 2008-2009 hit, the year I retired I shifted to 40/60, and am now at 35/65. Certainly I would have more, but I am quite comfortable with what I have. it still puts me among the top 6% in the U.S. in terms of net worth, which, given where I started in life, I am more than happy.

One of the biggest dangers is to be jealous of what others have, it can easily lead one to making irrational decisions.
JohnDindex
Posts: 161
Joined: Wed Feb 07, 2018 10:59 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by JohnDindex »

ivgrivchuck wrote: Sat May 08, 2021 7:20 pm
dcw213 wrote: Sat May 08, 2021 4:13 pm I think it is really the real estate that bugs me. These folks over extended themselves for homes they could barely afford and then moved on and up and accumulated rentals along the way. I thought they were crazy and they are now cashing in. I always rented cheap places and it is tough seeing those that lived it up now being rewarded for it to such an extent.
It's classic risk/reward. They took big risks, this time it paid off. They could have lost *everything* with that gambling (money, house, job, family, health).

If you now adjust your risk upwards, you are going to do the classic mistake: selling low (2008), buying high (2021).

You determined that 60/40 is your true risk tolerance. The fact that people are carrying money of Casino shouldn't really impact your true risk tolerance...
That’s a really interesting portfolio in your signature. How did you land on 26% fixed income and split between I and EE?
RadAudit
Posts: 4072
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by RadAudit »

OK. Fun fact for those who arrived late to the party and invested big bucks. Dogecoin lost between 25% and 30% last night because Elon Musk cracked a joke about it on SNL.

Some times you have to know the risks you are taking when you invest before you have to find out by other methods. Now that's not saying Dogecoin's price won't recover later in the week; but, that decline might have got someone's attention.
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
ivgrivchuck
Posts: 761
Joined: Sun Sep 27, 2020 6:20 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by ivgrivchuck »

JohnDindex wrote: Sun May 09, 2021 6:39 pm
ivgrivchuck wrote: Sat May 08, 2021 7:20 pm
dcw213 wrote: Sat May 08, 2021 4:13 pm I think it is really the real estate that bugs me. These folks over extended themselves for homes they could barely afford and then moved on and up and accumulated rentals along the way. I thought they were crazy and they are now cashing in. I always rented cheap places and it is tough seeing those that lived it up now being rewarded for it to such an extent.
It's classic risk/reward. They took big risks, this time it paid off. They could have lost *everything* with that gambling (money, house, job, family, health).

If you now adjust your risk upwards, you are going to do the classic mistake: selling low (2008), buying high (2021).

You determined that 60/40 is your true risk tolerance. The fact that people are carrying money of Casino shouldn't really impact your true risk tolerance...
That’s a really interesting portfolio in your signature. How did you land on 26% fixed income and split between I and EE?
The split is about purchase limits. If you buy as many bonds as you can every year you'll end up with roughly 50/50 split between I- and EE-bonds.

26% is also dictated by purchase limits... If the interest rates keep as low as they have been and inflation stays in 2%-2.5%, I'll keep maxing out the bond purchases, and the number will keep creeping up (But I won't go over 40%). My situation is somewhat unique that my wife and I have been blessed with five children. In total that makes it possible for me to purchase $140k of these bonds per year (child as a primary owner, parent as a co-owner). Long term plan is to use these to fund college expenses, but in case of emergency they can be liquidated...
40% VTI | 40% VXUS | 13% I-bonds | 7% EE-bonds
TheoLeo
Posts: 339
Joined: Mon Apr 02, 2018 11:39 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by TheoLeo »

Life absolutely is a race and deep down everyone feels it. Your happiness and well being depends on where you are compared to your peers.

When it comes to wealth, you chose a strategy that will always put you in the middle of the pack. This isnt a bad place to be if you have other things going for you. If your entire selfworth is based on your wealth however, then your conservative strategy will never make you happy. In this case, it might be rational to take big financial risks.
User avatar
HomerJ
Posts: 16735
Joined: Fri Jun 06, 2008 12:50 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by HomerJ »

TheoLeo wrote: Mon May 10, 2021 12:51 amWhen it comes to wealth, you chose a strategy that will always put you in the middle of the pack.
Technically, it puts almost all of us in the top 20% or even the top 10%.

Which is a lot better than middle of the pack.

But yeah, we won't make it to the top 1%. But we also don't risk the chance of dropping to the bottom 50% either.
A Goldman Sachs associate provided a variety of detailed explanations, but then offered a caveat, “If I’m being dead-### honest, though, nobody knows what’s really going on.”
User avatar
HanSolo
Posts: 380
Joined: Thu Jul 19, 2012 3:18 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by HanSolo »

Escapevelocity wrote: Sat May 08, 2021 8:54 pm Yes, there are two paths you can go by, but in the long run
There's still time to change the road you're on
On the other hand, it's always a good time to stay the course.

I think 60/40 is a pretty good AA (mine's even more conservative, so you're outperforming me).

I think having friends who are smarter/luckier than I am is better than the other way around.

Also, I get bragging rights over how mundane I am.

Sounds to me like you're in pretty good shape. Keep up the good work!
basspond
Posts: 1433
Joined: Wed Nov 27, 2013 4:01 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by basspond »

As long as you remember 50% haircuts are bad if you sold but are great if you bought.
Ramjet
Posts: 956
Joined: Thu Feb 06, 2020 11:45 am
Location: Ohio

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Ramjet »

Pikel wrote: Sat May 08, 2021 5:22 pm I can't believe 60/40 is conservative now.
Really, it's a standard allocation used around here in retirement and leading up to it. OP is in his 30's I think?
Last edited by Ramjet on Mon May 10, 2021 7:30 am, edited 1 time in total.
VT & HFEA
User avatar
Harry Livermore
Posts: 778
Joined: Thu Apr 04, 2019 5:32 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Harry Livermore »

Kenkat wrote: Sun May 09, 2021 1:37 pm
I’ve always been what I consider a solid “B” in life. There’s always people smarter, who make more money, who are better than me on the basketball or volleyball court, better looking, etc. But when I look at it all, I think I’ve done pretty well given who I am...

Play to who you are and your strengths and you will end up in a good place overall.
I truncated your post but I agree with everything you said. Every word could have been me describing myself.
There is something to being a solid "B" student.
Cheers
User avatar
dodecahedron
Posts: 5604
Joined: Tue Nov 12, 2013 12:28 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by dodecahedron »

nisiprius wrote: Sun May 09, 2021 7:16 am One of the most difficult emotions to control in investing is regret over the road not taken.

The point is that there is no way to avoid it. No matter what you do, or did, there was something different you could have done that would have made you more money. Not just a little more money, much more money. Things that were within your reach. Things that you even remember considering.

For example, I've always been a fan of Apple's products, bought my first Mac in February 1984 (one month after introduction). After going through a terrible period around 1996, Apple seemed to be on the right track a few years later when Steve Jobs took over, and on 10/5/2000 I bought 40 shares of AAPL at $22.1875/share--wow, that's exactly 22-3/16ths, weren't they fully decimalized then? and paid $887.50 plus (of course) $29.95 commission.

My diary entry says:
Rationale: Gambling. I think Wall Street probably overreacted because they dislike Apple… at a P/E of 12 and $4 billion in cash I think Apple will probably come back.

Intention: Hold about a year and wait for recovery. “Double or nothing”—if I lose it, I’ve lost it. If it goes up significantly, take my profit and run.
In March of 2001 I decided that was about as much "recovery" as we were going to see and that I would quit, being almost back to even.

Image

As things continued for the full year I felt I'd done OK. Even for the next several years. But, of course...

Image

If I'd "simply" held on--and after all it wasn't as if $887 was all that serious money--today I'd have $300,000. Heck, even if I'd lost my nerve and sold at the bottom in 2008, I'd still have $6,000.

What can you say? It's ridiculous to say I feel nothing at all about missing out. But things like that are absolutely inevitable and you mustn't fall into the trap of processing every decision that, in hindsight, could have turned out much better and considering it to be a "mistake." Even the big ones, like staying conservative enough to hold on through 2008-2009 and 2020.

As I say, I was and am an Apple fan. I attended Worldwide Developers' Conference in 2000 and heard Steve Jobs' keynote. I was a True Believer. So to everyone who says, in hindsight, that it was obvious that Apple was going to succeed and that it was foolish not to hold on to the stock, I insist that, no, it was not obvious. Any more than it was obvious that Osborne would fail.
Thanks for sharing this evocative story, which reminded me that my late husband and I went to hear both Steve Jobs and Adam Osborne (and other luminaries of the day) speak at Boston Computer Society meetings back in the early 1980s.

https://time.com/1847/steve-jobs-mac/

https://www.technologizer.com/2011/04/0 ... -computer/

Huge press hype at the time about both men, considered "gods" of their day (along with Bill Gates, whom we also had occasion to cross paths with.)

No regrets that we did not buy stock in any of their companies (except, indirectly, via index funds.)
Carguy85
Posts: 513
Joined: Thu Mar 19, 2020 6:26 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Carguy85 »

Thinking of joy and fulfillment as conditional is a trap. Further more it sounds like the most important people in your life don’t sound to be on board with the “insert your last name here” family plan. Your problem may not be money related at all?
ruhigste
Posts: 87
Joined: Sun Jan 20, 2019 8:13 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by ruhigste »

whereskyle wrote: Sat May 08, 2021 5:26 pm
dcw213 wrote: Sat May 08, 2021 4:41 pm I guess it is a bit of FOMO but not so much I want to get rich quick with a moonshot investment vs. I should just borrow for a nice house and nice things while society lets me instead of worrying. Seems more and more like asset price growth or at least stability is a global priority so protecting against the downside seems more and more foolish.
These were "priorities" before 2008, and a global financial disaster happened anyway.

Have you identified your number yet? That is, the number at which you will declare yourself financially independent because you will have more than enough to enjoy life for the rest of your life without ever having to worry. If you haven't yet done that, chances are you will be more susceptible to keeping up with the Joneses and FOMO.

Do the work to determine your own path by setting the goal you intend to reach and seeing how you'll reach it, so you can feel good about sticking to your plan. Money can be poison. Make sure it's serving your purposes. Otherwise, you'll serve its.
+1
mffl
Posts: 189
Joined: Wed Dec 06, 2017 7:25 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by mffl »

markjk wrote: Sun May 09, 2021 7:12 am If it keeps you invested, it's the right thing for you. This is not a point in time thing. You have decades and decades ahead of you. You need to do what is going to keep you invested for the long term. Forget about today's frothy investment environment. Right now it seems everyone is winning. That will come to an end soon. It always does.

Your AA is a bit conservative for your age, that's true. But, it's a personal thing and you made the call. You've definitely done well over the past decade so celebrate the progress to this point. Don't get into comparing to others. It's a dangerous game and might cause you to do something that doesn't fit your personality and ultimately sets you back when (not if), the markets all collapse again in the future.

With all that said, you could certainly adjust your AA a bit now if you feel like you can handle that next downturn. Research shows going with an 80/20 stock/bond allocation would get you pretty close to 100% stock returns but with a bit less volatility. You still have a ton of time in front of you so you could consider this move.

No matter what you do, keep in mind you've done great to this point and you are well ahead of most of the population. There will always be someone out there doing "better" than you. They either really are (good for them) or they only talk about their wins and none of their losses so it's a perception thing. Regardless, your goals are what matter. Not comparing to others. Keep that in mind and it will help you stay on track.
+1

Agreed with everything in this post as well as most of the posts in this thread. Avoid FOMO, don't try to keep up with the Joneses, everybody only talks about their successes, and even then they lie about those, stay the course, real estate isn't an investment it's a job, etc., etc.

All that said, I don't think OP has to stick to a 13 year old AA. Whenever I'm asked for advice during a downturn, I always tell people to stay the course. If they just can't sleep at night anymore, they can change their AA to be more conservative, but NOT with the expectation of getting more aggressive again when things get better, because that's selling low / buying high (even though it sounds better than that, it's not). I tell people adjustments to their AA should be semi-permanent and exceedingly rare, and that seems to help keep people holding on through a downturn. But I only mean semi-permanent. If you're getting closer to retirement, you can get more conservative. If you lived through 2008 early on, but you're more experienced now, you can get a little more aggressive.

I don't think OP should feel pressured by family, friends, or us into an 80/20 portfolio, but it's a perfectly rational portfolio which might offer some of the benefits OP is looking for without completely devastating him/her in a downturn. It's ok to make adjustments on decade plus timescales. Just don't make it a habit. Write down your IPS so future you knows why present you did this and make an argument to yourself why you need to stay the course in the next downturn.
User avatar
vitaflo
Posts: 1612
Joined: Sat Sep 03, 2011 3:02 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by vitaflo »

Has anyone ever lost money at the casino? I learned long ago not to listen to people bragging about their fortunes, whether financial or material in nature. Too many people who take risks and win big don't talk about the big losses that come with risk. Too many people who spend like crazy don't talk about how over-leveraged and cash poor they actually are.

Unless you see actual balance sheets, you really can't know how good or bad people are doing. Much like a gambler, people who pile on risk and get quick wins tend to keep doing it...until they lose it all. It can be very hard to know when to say when. It's one of the reasons this site even exists.
User avatar
codoriti
Posts: 47
Joined: Thu Apr 30, 2020 2:00 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by codoriti »

“There is nothing so disturbing to one’s well-being and judgment as to see a friend get rich.” --Charles P. Kindleberger
DB2
Posts: 1209
Joined: Thu Jan 17, 2019 10:07 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by DB2 »

dcw213 wrote: Sat May 08, 2021 4:13 pm I began my career in 2006 and was emotionally impacted by the events of 2008. I followed the advice of family and conventional wisdom at the time and invested 100% equities once I started accumulating money. While not much money in hindsight, the 50% haircut was devestating for me and I promised at the time to find my real AA. I landed on 60/40 plus an EF of 1.5 years expenses and have maintained since.

While this has certainly helped me sleep well at night I am now seeing friends and acquaintances come into wealth by doing things that are acceptable from a societal view on risk but not my own. I have to admit I am feeling some regret and a pull to loosen up on my conservative views.

I got off to a very fast start to my career and was way out ahead of the pack for a while in terms of wealth accumulation. Lately I have caught up with friends who have shared shocking stories about how much they have made on real estate and their 100% equity portfolio. I'm talking folks that made a few million in 5 years by acquiring properties and going all in on stocks in their 30s.

I think it is really the real estate that bugs me. These folks over extended themselves for homes they could barely afford and then moved on and up and accumulated rentals along the way. I thought they were crazy and they are now cashing in. I always rented cheap places and it is tough seeing those that lived it up now being rewarded for it to such an extent.

I know these things are cyclical and I am not getting too caught up in FOMO but I am feeling feelings like "why not lever up/borrow and live it up like they have been doing". COVID and the fragility of life and the system may be contributing to these feelings.

Just sharing some of my personal finance thoughts. Probably a sign of a top that I am feeling this way as I have been very set in my views over the last decade plus.
Keep in mind, you and your friends are relatively young. Sooner or later, everyone will be put to a test in the next inevitable bear market or 50-60%+ drawdown(s) over the upcoming decades. Will they stay the course with 100% equities and be to keep up their leveraged rentals (which is a whole other matter)? It sounds like 60/40 has allowed you to stay steady and by all measures, that particular AA has done rather well for a very long time...including since 2009. Even in 2008, that allocation only dropped around ~20%. But this is a personal choice and situation about you - not your friends. It's very individual and as others have said, the more risk one takes, the bigger the potential pay off. If we all would have just put every dollar into Amazon many years ago. :happy It's very easy to Monday morning quarterback, but don't forget the reasons why you did what you did!

I recall Jack bogle saying in an interview, he was 50/50 and spent 50% of the time thinking he was in too many bonds, but spent another 50% of the time thinking he was too much in stocks.
Last edited by DB2 on Mon May 10, 2021 1:15 pm, edited 1 time in total.
TonyDAntonio
Posts: 628
Joined: Thu Mar 03, 2016 8:32 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by TonyDAntonio »

I totally get the 'regret' feeling. I have changed my asset allocation a couple of times as I got 'smarter'. As a result I'm sure I have not made as much money. I also moved my new family 35 years ago out of San Francisco to Bay Point. I now own a Bay Point home instead of a SF home (declined buying my sisters out for my parents' home). That has resulted in about a million dollar 'loss' in my net worth as the SF house has appreciated a lot more than the Bay Point house. But you know what? I still have more money than I ever imagined, I own a nice home outright and I'm retired free to do whatever I want. I also did all this without taking much risk and I continue to have a pretty low risk portfolio. So yah, we missed out on some things but life is still good. Keep thinking that and laugh off the fomo.
deltaneutral83
Posts: 1896
Joined: Tue Mar 07, 2017 4:25 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by deltaneutral83 »

As far as the guy/neighbor/co worker with the supermodel wife, three kids set for the Ivy league who speak 4 languages by age 13, stock picks like TSLA/AMZN/NFLX, held bitcoin through 2018 downfall, runs marathons a few times a year, I mean you just have to congratulate them. But you can't play someone else's game. Play your own game and when you get up late in the 4th, run the ball and the clock out and take chips off the table.

Retail people and news outlets like to talk about pensions being the gold standard and we frequently hear "thank god for my pension" as if it's some magic bullet for govt workers and some private sectors that still use them. It's almost as if a workplace pension is money that fell out of the sky the way some people and the media talk about it. It's basically a 60/40 portfolio that people accumulate for 30+ years with 15-20% of their income from their combined individual and employer contributions. I don't know if they were around, but a Target Date Fund in say 1986 would absolutely destroy any basic pension for someone who is 57/58 who started at 22/23.
Escapevelocity
Posts: 603
Joined: Mon Feb 18, 2019 8:32 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Escapevelocity »

HanSolo wrote: Mon May 10, 2021 2:17 am
Escapevelocity wrote: Sat May 08, 2021 8:54 pm Yes, there are two paths you can go by, but in the long run
There's still time to change the road you're on
On the other hand, it's always a good time to stay the course.

I think 60/40 is a pretty good AA (mine's even more conservative, so you're outperforming me).

I think having friends who are smarter/luckier than I am is better than the other way around.

Also, I get bragging rights over how mundane I am.

Sounds to me like you're in pretty good shape. Keep up the good work!
When mountains crumble to the sea, there will still be you and me
hnd
Posts: 557
Joined: Mon Jun 22, 2020 11:43 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by hnd »

good friend of ours have a family CPA firm. When I taught FPU at our church for a few years, one of the things that blew me away is how not great most people are truly doing even though you are like they must be doing great. At dinner one evening, i mentioned this to our CPA friends and they were like, you have no idea.

1 example. I had an acquaintance that I just assumed was killing it. we were discussing investing a few years back and this guy basically made it seem like he was making all the right choices. fast forward to just before the pandemic and I find out he just lost his rear end on investing in a chain of fro-yo places. he never mentioned those investments when we talked and he was all in at that time.

Everyone else is just noise. tune it out. Its hard. but you have to or you'll drive yourself nuts.

on the sleeping at night thing. if I have a kid who thinks the boogie man lives in her closet keeping her from sleeping at night, I teach her that there is no possible way the boogie man is going to get her. I don't put the dresser in front of the door and tell her now the boogey man won't be able to get you acknowledging it may exist. while you say 60/40 helps you sleep, it truly doesn't sound like it will moving forward. When i started i read a book that told me i needed my age in bonds. i was 25. for 5 years thats how i directed my roth ira. But for me pouring over the history of the markets over large time frames helped me realize the boogey man didn't exist and i realized even through 2008 (year 3 of the 5 years at a 75/25) that I had such a long ways to go, it allowed me to stretch my allocation further and reap the premiums of it.

For some there is just no getting over it. I didn't have much to lose in 2008. I had plenty to lose 14 mo ago and because I knew when i needed it (20+ years from now), I wasn't worried about it. If there is some sort of event that 20 years of us markets don't enough time to recover from it, i think we are in much bigger trouble than will we have enough to retire.
Mr.BB
Posts: 1639
Joined: Sun May 08, 2016 10:10 am

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Mr.BB »

One of my favorite sayings...."The grass is always greener on the other side, but you still have to mow the lawn."
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
User avatar
Eagle33
Posts: 1411
Joined: Wed Aug 30, 2017 3:20 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by Eagle33 »

Finances are just one part of your life. Succeess in your life is a balancing act of all parts of your life. Until recently everyone thought Bill Gates life was near perfect. Now we hear he is getting divorce - not as perfect of a life as we thought. Develop a plan to buy equities when they go on sale - next market crash. Plan for opportunities and don't chase performance. And quit comparing your life to others - set your own goals and focus on your goals not others.
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.
cysewr
Posts: 6
Joined: Wed Apr 14, 2021 7:21 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by cysewr »

OP, I feel the same way. Back in 2018 I didn't want to go all the way up to *gasp* $225k for a house, so I decided to wait on buying. Had friends with similar incomes buying houses for significantly more. I remember thinking that what they were doing didn't seem wise at all... now their houses are worth nearly twice as much, and they have been able to refinance at sub-3% rates. Some of them talk about how smart they were to buy back then. I try to be happy for their good fortune, but I get sick with regret every time I think about my own unwillingness to stretch out of my financial comfort zone back then...
halfnine
Posts: 1512
Joined: Tue Dec 21, 2010 1:48 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by halfnine »

One of the things I've picked up along the way here was from Larry Swedroe and this is where you might now be confusing strategy with outcome.
dualblues
Posts: 8
Joined: Tue Mar 16, 2021 4:43 pm

Re: Feeling Some Regret Over Conservative Approach to Finances

Post by dualblues »

I feel your pain brother!

I have family and friends in the San Francisco Bay area, Toronto and Hong Kong. Over the past decade almost all home owners in these cities got rich. The combination of leverage and rapidly rising property values paid off big time. They also had the benefit of living in their investment when their "more conservative" (responsible?) colleagues rented and lived modestly.

It can be comical comparing experiences. For example, I have a highly educated colleague who has worked with several top tech companies in Bay area (FB and Google) and made 1/2 million in a start-up. He lived frugally and is successful - net worth about 4 million. He felt guilt when he indulged in a Camry when his Civic was 10 years old! He has never owned a home and may leave Bay area because a nice house in a good school district is about 1.8 million). Another friend has always had flashy new cars, taken trips and enjoyed life. Basically, he bought a town-house (later rented it out) and then a house. His properties alone are worth 3 million. He also benefited from bitcoin and Tesla stock (quick money).

Q. How did you get so rich? A. I bought a house.

To add insult to injury, in the Bay Area, within the first 5 minutes of a conversation, somehow (magically), people are able to work into the conversation:
i) if they went to Ivy League school (most often Stanford)
ii) if they drive a fancy car (especially if they are part of the Tesla cult :).
iii) if they work for one of the cool companies: FB, Google, etc.
iv) if they live in a fancy zipcode: Atherton, Palo Alto, Los Gatos, Los Altos, etc.

I hope there is something more interesting about these people than how they classify themselves (where they work, what they own, where they were educated.)

What can you do? Be your own person - find happiness. It is not money.

I recall a recent vacation in Maui. My wife and I were doing our level best trying to handle our 2 young kids and luggage. It was sunny and warm. We, were surrounded by a crowd of angry people. You see, most of the rental cars are not at the terminal. People had to line up, wait 5-10 minutes for a bus to pick them off and drive them to the rental offices. Oh, the humanity! When I told my kids we had to take a bus to get our car. They responded by raising their hands in a victory salute and yelling out "We get to take the bus!". Others remarked that they had never seen anyone so excited about riding a bus...but, their excitement was infectious. Most people in our area were up-lifted. Kids get it!

Don't dwell on what is fair (you will be bitter and karma can take a long time to materialize). Grow a set! Realize that the frugal, responsible and modest life is a better life. Food on the BBQ in the back yard tastes better than the most expensive restaurant. The guy that replaces his own plugs, eats stone ground oatmeal for breakfast and bikes is, simply put, worth about a half dozen rich folks who got "lucky".
Post Reply