Stop with the “buy low, sell high” mindset around investing

I think a lot of young investors hear investing tips around the water cooler like “buy low, sell high” and “the market goes up and down” and struggle with when to take their gains and get out of the market. Well, that’s really the wrong mindset around investing. So I’ll make it easier for you: Never sell.‎

Don’t think of investing like some sort of carnival game where you jump in and out while trying to avoid obstacles. Instead, think about it as accumulating more and more shares over the course of your life. Use your income to regularly buy more shares. Reinvest dividends from those shares to buy even more shares. Ignore the volatility of the market. It doesn’t matter what someone is currently offering to pay you for your shares. You’re not selling. Over time the market will go up and up and those shares will become exponentially more valuable. Any sort of games you play will be much more likely to disrupt that growth than to amplify it.‎

So what’s the point if you never sell!? Well, you do sell, eventually. But during the wealth accumulation phase of your career, your income is providing for you to live as well as invest. Then when your investments hit 25X your annual spending, you’re in the “financial freedom” portion of your life. You can sell enough each year to cover all of your expenses without ever having to work again. That’s winning with money. If you want to be a baller and buy a house in cash or something, then get that nest egg even bigger, then sell what you need. ‎

As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.‎


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