This is a screenshot from my actual Fidelity account showing the performance of my investments in 2023. I made zero trades last year (other than some normal buying of the same funds). I didn’t time the market. I didn’t pick stocks. I didn’t try to avoid crashes. I didn’t change strategies. I didn’t hedge against a recession or inflation. I just let the investments sit there and do the work. It’s the exact same thing I’ll be doing in 2024 and beyond.
We lost a great financial mind in 2023, Charlie Munger. One of his famous quotes was “The big money is not in the buying and the selling but in the waiting.”
Glancing at the individual months, it was a bit of a rocky ride. Five down months, seven up months. I “lost” $127,277 in September! Ouch! But I didn’t actually lose anything that month, because I didn’t sell. I just kept buying and holding and plan to forever. I’m making money in the waiting.
The nice thing about “holding index funds” is that they pay you for that! The payments are called dividends! Last year I got paid over $58K in dividends just for doing nothing. They’re cash payments directly deposited to my account. I’m at the point now where I could essentially live off just the dividends without ever selling a single share.
I think this was my second best year ever (2021 was slightly better). That’s part of the beauty of “compound growth”. If (hypothetically) the market performs the same every year with a 10% return, YOUR personal return keeps getting bigger and bigger! Because it’s 10% of an increasing amount. The big money is in the waiting. But you gotta get started in order to get to the waiting!
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Jeremy
