I’ve been getting more and more clear about what my investing strategy is. For the most part, if we talk about “Heart vs Mind” decisions, I go with my heart. Even if someone could make mathematical arguments about how some things can generate more money, that doesn’t move me.
Here’s a breakdown of ways I invest my money.
In myself. Between psychotherapy, couples therapy, deep coaching, and other personal development. Not only as a financial investment, but in time. I don’t spend more time on anything else these days. ROI in this is measured as peace in my life. I’m a different person than the person in crisis I was only 4 years ago.
In businesses I own. This is the one place I take on extreme risk. With my own business, I am completely in control of the money I make, so I’m always one to take a chance. When I had next to no money, I spent the little I had on my business. I always believed in myself, that it would pay off. It usually took a lot longer than I wanted, but I have a series of success stories now where the investment paid off.
Most recently, I (and my partner) made a multi-million dollar investment in the webinar company we cofounded. For over 2 years I had no income, and we essentially “bet the farm” on redeveloping our software and replacing my role. If it didn’t work, we’d have nothing. That bet paid off. For the past year I have zero role in the company and dividends of my 50% of the profit wired to me every month.
The hope is for a nice exit, and until that day I diversify my investments below.
My risk tolerance drops significantly when I’m not investing in or making bets on myself.
I decided to pay off my house and carry no mortgage. The money saved in not making interest payments is the safest financial investment I can think of. I prioritized this over carrying a mortgage and investing in normal retirement savings. I can’t tell you the peace of mind I had when the pandemic hit knowing I was sitting in a home with no mortgage. It also allowed me to endure the years of no income, knowing my family home was not at risk. I’m not sure what premium I can put on that peace of mind but it’s many times that of the the interest savings.
I carry no debt at all. A penny saved is a penny earned and I service no debt. I know I feel strongly about this from living through multiple times of precariousness in my life. I don’t see anything wrong with that and don’t plan to change.
It took me a while to invest in the stock market. I went all-in on myself and I have no regrets. Now that I’m in a place of no debt I invest in the stock market but I take no pleasure in it. I only invest in ETFs that are long term holds and averaged against the market. I don’t treat the stock market like a casino. This is often referred to as passive or “Couch Potato” investing. I assign 20% of my income to buying investments this way in an automated fashion. My primary motivation with this investment is diversification.
I’ve assigned 5% of my income to fund something more risky and “fun”. Right now it’s a growing amount of savings until I come across something that excites me. In theory if I lost all of this money, it wouldn’t harm me because I’m already debt free and put 20% into long-term investment.
Crypto, Bitcoin, NTFs, and related things – this is a hard pass for me. I have no FOMO (Fear of Missing Out). I won’t personally invest in things I don’t understand, and I could be wrong about all this and it’s ok. My risk tolerance isn’t there. There are a lot of pumpers and evangelists about this stuff that completely turn me off.
Investing in people and other businesses. I’m more likely to invest my time and talents into others, as a mentor or trusted advisor, than to invest cash. I’ve never taken an outside investment, so it’s simply not part of the world I’ve lived in. I used to think it was something I’m supposed to aspire to do, but realized I really have no interest in listening to pitches all the time. I’m ok not being part of that world.
Charitable investments. There is no ROI here, but I consider this an investment all the same and treat it as an automatic monthly expense, currently at 15% of my income. I removed the pain of decision of donating money by making it an invisible part of my overhead. I was inspired by “tithing” but I figured I could do it one better. I’ve also decided rather than asking people to support my charities and in turn then having to support theirs to simply and quietly do my own philanthropy. I can’t solve all of the world’s problems, only make the difference the way I can.
I see the investment strategy that I’ve come up with as another example of me running my own race. I have determined the metrics that create peace in my life and don’t compare the returns with anyone else or second guess what I should be doing.
Where does Heart vs Mind factor into your own investment strategies?
