The Key Characteristics of Great Investors #563

those guys have a podcast to uh with? I heart actually, or they used to where they would they're going back kind of reliving glory days. I didn't either, even though I loved Scrubs, that sitcom. It was a salad show, fantastic. I definitely enjoyed watching that one in college. But that is not what we're talking about today. We are dedicating

an entire episode to investing. You know, like every episode we touch on investing a little bit, but we felt it was necessary that it was time to do a deep dive into the realm of investing and specifically kind of some of the things that go on internally that make the best investors out there. And these are things. Some of these things might may become more naturally to people than others, based on your personality type or your inclination.

But I think all the things we're gonna mention here you can also develop, like you can become better at and so as we kind of point these things out, you might be like, I'm not naturally a patient person, but it's something we can we can all work on. You're given away the goods already. All right, that's all no more until we'll get there. Sure, But first we we need to continue the So you've talked about your pixel, your your new phone. It's it's sort of like a

saga here, this this epic journey of your phone. And you've got a little update. Uh well, do I okay sharing this? I thought you were going to share it for me because I'm too bashful, because we've got to talk about this. So I have. I finally got a case because but it was too late, Yeah, too little, too late. I did the steps out of order. I cracked the screen and then got the case, and I really should have done it the other way around. I

have learned my lesson point typically for a lot of years. Man, I didn't crack my screen. I was pretty good and not having a case. We came into work a couple of days ago, I saw your phone and had the crack screen, and I was so pissed you. I was pissed for you. I was just like, no, we literally just shook your head, like you idiot, you just got that phone. It's just it's been a few weeks. But I think it's fair to share it because like we share wins that we have, and I think it's it's

good for folks to know that we're human. Sometimes we make dumb mistakes. Uh, And I think you would categorize this as a as a dumb mistake. Yes, And unfortunately it's only in a small corner and it doesn't really affect until you drop it again in that one crack. But that's why I got the case. Now the case, I'm even gonna give screen protectors. Get that screen protector there. It should act as like like glue. Let hold it

all together. That's the goal. There. We're going from getting worse and my wife, she's like, one, just go get another screen, and I'm too cheap. Yeah, you just paid for this, No, no, I am such an idiot. I must like walk around with this crack screen for years to kind of walk of shame, just to remind myself of how much dummy I am. So I'm gonna I'm gonna leave it as is, but I'm gonna have the screen, get the screen protector, and hopefully it will stay just

a small crack. And obviously that's absolutely the most affordable, cheapest, easiest thing that for folks to do to protect their phones, as folks might be upgrading getting new gadgets this fall, get that, get that case. I think the screen protectors are like five for nine dollars or something like that, so the the expenses minimal. You don't necessarily need an insurance policy. I didn't have an insurance policy that I'm not I'm not going to do that. That's a that's

a waste of money. We're not crazy self insure, right, and the cheapest self insurance is a case. I realized that I just kind of thought it was poppy cock and thought I was above the law. So I thought you were better than me because I got was it last week or two weeks ago? I got a case or got the screen protector on there kind of mentioned it as an aside, but how did you drop your phone? Like? How did it happen? Had it? Literally I said it on the night table and it like slipped off like

or something. Yeah. I was like what, No, And it was a short drop. I just assumed that it was gonna be okay, but it wasn't. Oh my gosh, when did Well you've got concrete floors in that room. Uh, They're like, aren't they there? There? No, that's tile, okay, hard hardwoods on a cross space or a basement where there's a little more bounced to. Well, sorry to hear that, dude. Hey, all right, I'll be okay. It's a minor inconvenience really when it comes down to it. But for everyone else

out there, this is your warning. Don't be like me. All right, let's move on. Let's mention the beer we're having, Matt. This is October Fest by Dry County Brewing. They are right around the corner from where we live now, so I figured should try that. And it's gonna be that time of year where October Fests are on the shelves again, so let's let's drink one of these. September, though, Joel I know, but still you're like pumping spice Lotte guy,

where you're like jumping the gun. You're like, okay, it's still summer, you're sweating, You're it's only not okay in July, right, So that's that's when I start to get annoyed. But October Fest beers, it's it's May now, is it okay to dream? Right? Not cool? Or they have the pumpkin beers are on the shelves obviously in full force at this point in time too. I think it's okay to start for taking in September if you start drinking in yeah, July or even early August. Sorry too soon? Fair enough,

looking forward to enjoying one of these. And this is we've never had a beer by Dry County on the show, so looking forward to talking about them here at the end for sure. All right, well, let's get to the topic of hand. We're talking about the key characteristics of great investors, and Matt, there's been this, uh, I don't know if you've noticed. I think everyone's noticed this mass

proliferation of micro transportation devices in recent years. I think That's what I'm gonna call it, at least, And there were the Bird scooters. I think they were maybe at least the most popular um of these micro transportation vices to show up in cities, and then all these competitors, Lime and all these other companies just sprung up and started putting hundreds in thousands of scooters in different cities

and kind of got out of hand. A lot of them got became electronic litter on the sidewalks that people stopped using. A lot of them ended up just kind of thrown thrown in the trash sadly. But segways that's another one, right, they kind of make like a nerd. I feel like the actual Segways, the actual site Joe Blue. Yes, they're the nerdiest of the micro transportation devices, and I think mostly only used by downtown tourists at this point. Uh.

Electric true electric skateboards. They're another interesting transportation to Actually, I'm pretty fascinated in those because those look like a ton of fund Like the ability just to go carbon down a hill like or not not even down a

hill like. That's the fun on a regular skateboard is having to find a hill to go down, but the ability to be on flat ground and leg and do it do some carbon like, that's like a lot of fun of the one of the other really cool micro transportation devices is the one wheel, Like those things are kind of taken off. Well, I gotta be honest, right, there's some really cool stuff out there, but none of these newer transportation inventions holds a candle to the old,

ultimate classic, to the bicycle. It's we talked about bikes all the time. I see where you're going. It's and it's not that bikes haven't improved in the past hundred years, right, they certainly have, but those iterations have been relatively minor. Yet bikes continue to reign supreme as the number one personal transportation device, at least in our opinion. Bicycles were the o g They were the one point of personal

transportation vehicle for sure. And similarly, our world, it changes quickly, right, There's always something new that were supposed to be considering. There's new diets, there's new kids toys. I was shocked at the latest toy that probably got that like makes potions, and it's there's never an end to the iterations on kids toys. There's always something fancy or knew that they want.

There's new gurus out there, pitching new products. I mean, our world is constantly changing and there's always something new to grab our attention, and there's also new investments. But is the new stuff better than the old stuff? Almost always answers no. And so today we're going to discuss how to be a great investor, and particularly in a world where there's so many new fangled offerings, there's so many,

there's so much more for us to choose from. How do we stay the course and make good decisions when everything around us is changing? What what seems like all the time. That's right. Even though there are all those new forms of micro transportation, fact is, we both still have our leg powered bikes that are set up here on the walls in our office. Um, And it's not that technology or like the advanced advancements that we've seen

in our world. It's not that it's all bad. Right, And in particular when we're talking about investments, there have certainly been some like there are there are some pros to things changing and things evolving. Accessibility that folks have not to be able to invest is great. Uh, you don't have to know somebody, You don't have to hop on the phone and call up the brokerage and actually

place in order. Those advancements are good. Uh. The fact that fees don't exist, like, that's a good thing as well. But like, there really are a lot more crap your investments out there though. Uh. And there's also been a proliferation of not so awesome investment advice as well. It's a constantly changing space. Uh, there's a wider range of options available to us. We actually discussed this back in episode four forty six, where we talked about investing in farmland,

investing in wine, investing in art and whiskey. And that's right. I prefer to drink it and not invest in it. There's a way you can do both it. But these new fingled like they're sexier options, right, but they can throw us off our game, and it's difficult to address every single product that's out there. We like, we certainly weren't able to cover all of the alternative investment products

out there on that episode. I'm sure there's a bunch that we haven't even heard of, and I know that there are plenty more that will be invented in the future, and so we wanted to make sure that you are able to cultivate and then embody the characteristics of what it takes to be a great investor so that you'll be able to make wise decisions with your money, even in an era where there are our potential investment options

at your disposal. We want you to know why it is that you are investing, because in the fact is like Joe and I were doing the show, but we may not always be here for you. There might come in a day. That's why we have life insurance like a policy genius. But we're planning to be here and we want to be able to continue to to be sort of like your partner as you advance along, as you travel down the personal finance path, as you're seeking financial freedom. But we may not always be there. That's

all I'm saying. It's true, it's true. That's the ultimate reality. But the I want to say what this episode isn't, Matt, because I think you might read the title and you might say, well, the key characteristics of great investors. They're going to talk about the individuals who are great and investing. The greats we can replicate what they did and know the goal of this episode is not to turn you into the next warm buffet, the next Charlie Munger or

the next Peter Lynch. And you might say, I don't know who any of those people are, and that's okay, I don't need to. But those are individuals who have, over a long time span, out performed the market, even though that's really really hard to do. If we were to create some sort of mount rushmore of greatest investors like those, those three guys would probably be on it. I don't know who else we would include necessarily, but it's widely accepted that those are three of the greatest

investors to have ever lived. And you know, most of us, we've got jobs, we've got families. We're just not interested in nor are we even equipped to start competing on their level, to even seek to rival what they've done. But the good news is that's not necessary for us

to achieve our financial goals. That there are certain key things we can learn from folks like them and we can implement into our own lives, increasing the possibility that we're able to get out of our own way in order to watch our investments grow over the years and over the decades. But I just want to mention that we don't necessarily need to be exactly like these folks, we don't necessarily need to become professional investors, but we would say there's still a lot that we can learn

from the way they go about their jobs. Sure, there's a way that you can continue living your life and the life that you want to lead and live without you know, becoming a total nerd, which is what it takes to be uh, the very very best investor. But one of the characteristics that we think is really important, body is that you need to be hungry to learn and specifically learning from others. That is one of the

biggest keys to success. You don't need to reinvent the wheel if you can pattern your investing game after the best folks out there, you know, and not the ones who who say that they're the best, like on YouTube and TikTok. Those platforms are full of those folks. A lot of a lot of big heads out there, man telling people that you've got to follow their plan in order to succeed, and that's pop Yeah. And we're also not saying twice this episode, I think so, yeah, you've

already hit your one poppy cock per episode limit. Uh, And like we're also not talking about just finding a single individual, right like like a guru and following them to the ends of the earth. That's more cult like behavior that we are not in favor of. What we're talking about is using time tested wisdom that has accumulated

over the decades and over the centuries um. And it can also be helpful to find a group of folks, right like a hive mind of individuals who are dispensing information that you can trust on a regular basis that tends to work together in order to inform sort of a cohesive strategy. We think that that will make a

massive difference for you moving forward as well. It makes I mean, specifically, we talk a lot about the how the money Facebook group, the ability for folks who share a lot of common goals, right like, the actual ends that they're seeking after might vary slightly, but the means to get there are oftentimes very similar. And that's what I love about personal finances, that we we all can take a very similar path, a similar strategy, even if

our end goals are slightly different. Yeah, and even if our particular situations look a whole lot different, if our income is differently, if we live in opposite parts of the country or even different different countries like, there are a lot of similar principles that we can adopt and

put into practice. And so, yeah, Matt, you mentioned basically the first characteristic is being hungry to learn or being thirsty for knowledge, right, because information builds on itself and we're all indebted to those who have gone but for us, Right, I'm thankful that that we can iterate based on the discoveries and the inventions of others without having to start over from square one, because the reality is knowledge really can get lost over time if we're not vigilant, Like,

is there anybody out there who knows how to build a pyramid these days? Uh? Like one of the great Egyptian pyramids? No, Like nobody knows how to do that. That knowledge has actually been lost, like it wasn't transmitted

down to future generations. And that's a really important thing to realize, Like, we're fortunate the level of information we have available to us as investors, Like it can be overwhelming, but we should also be pretty thankful because there is a whole lot that we can learn in less time than ever because of what's at our fingertips, and that maybe real quickly we should discuss our biggest influences because we've actually been able to have a lot of them

on the show. Sadly, Warren Buffett still hasn't responded to our emails, but a lot of the other folks who have come on the show, we would we would say they're worthy of you listening to regularly reading, reading their books or blog posts or whatever. Morgan Household, Clark, Howard, A. L. Collins, Ben Carlson. There there are a few of our favorite money writers and thinkers. We've had the good fortune of

having each one of them on How the Money. That's right, Warren Buffett and Jack Bogle they are from there, from an even more distant generation. So those guys have been around for decades and decades and we haven't had them on the show, and sadly Jack Bogol is no longer with us. But their thoughtfulness about investing has been invaluable

to informing how we view investing. We haven't created these concepts out of thin air like Matt and I. We didn't just stumble upon our own investing philosophy through self actualization. This is really has been a project of many years of reading and learning from the wisdom of others. Yeah again, you don't have to reinvent the wheel, right because chances are, like, if you wanted to, you could self actualize your way

into a winning strategy. Perhaps there is a chance that things don't pan out very well, uh, depending on your proclivity to learn and to make the right decisions. But if you're a smart individual, if you're willing to not make decisions based on your emotions, there is a chance that you could just isolate yourself, look at the data,

and make the right decisions. But why like, why would you be off in the corner by yourself kind of spending your wheels when you can just look at these proven methods, these proven paths that are well worn that I mean millions of people have taken in order to grow their wealth. That's why it's important to to be able to learn from others. Well, maybe you read that Robert Frost poem and you're like, I'm gonna want to go the road less traveled, and in some cases that

is the way to go in life. But when it comes to patterning your investing decisions, like, you don't necessarily want to go the road less traveled, Exactly, it's gonna be boring. Is better to be the route for misery exactly. Yeah. And you know, not only should we learn from history and the experiences of others, we think it pays to be constantly curious as we're looking to learn from everything around us. We want you to be like a sponge that's constantly soaking up the nuggets of wisdom that you

encountered every day. But not only is it important to learn and understand what's going on in the world, but understanding yourself is just as important. Increasing yourself awareness is a vital part of increasing your knowledge, where you know, you're recognizing that they're they're gonna be limits to what you can know, to what you can do. It's it's not difficult for us to begin to think that we're

smarter than than we actually are. But the reality is that the more you learn, the more you realize that you don't actually understand. I remember people saying that when I was in my early twenties, and I was like, now, I'm pretty sure I'm gonna learn a lot and I'm gonna know it at all. And it is true, though, the more you learn, you're like, wow, there's still a lot to be It almost like heightens your sense of

humility because you realize how much you don't understand. Sure, it's it's sort of like you're walking along with a torch and like when you're younger, you think that, oh no, when I specifically, I'm thinking of like the old school Zelda, because like you create the map, you know, like as

you go into these certain areas. Um. But it's it's as if you think in your earlier years that once you discover the boundaries of the level, or you know, once you figure out where all the walls are, then it's all you gotta do is just kind of fill in the gaps, right, But in reality, instead of there being walls, there's just more doors there. There are always going to be more doors and more arenas or industries that you could learn more about. I'm so glad you

brought a Zelda reference. It's here, I mean this episode reference before. I don't know, but that was one of the classics. Man, it really was the gold the gold cartridge, that's right. Remember you had always like blow on it in order to if it wasn't working, that does build up, blow like it, run your finger across it. Yeah, I don't know the last time I played the video games all the tricks. I don't even know how they work

or what games are hot these days. But the reason I mentioned that mention this is because it's actually a helpful realization. Obviously, by you realizing that you don't know everything, this is going to keep you from trying to make investing decisions with hubris. And you know, we're kind of talking about humility here, which we feel is is another great characteristic to possess when when you know yourself better,

you can be humble. Um And and not only is it important to realize what it is that you don't know, but it's important to understand your natural inclinations and how it is that you behave. And the reason I and this is because you literally could have all of the knowledge that Warren Buffett has, but if you are not able to actively implement that knowledge into how it is that you invest, well, you're not gonna be a good

investor if you haven't developed the other characteristics aside from knowledge. Yes, you're still you can know everything there is to know, but make massive mistakes exactly if you cannot implement it well, then that doesn't automatically make you a good investor. So let's get to those other characteristics mats. We'll get to a laundry list of the important, the key characteristics that you need to develop if you want to be a good investor, and we'll talk about those right after this.

All right, we're back from the break talking about some of these key characteristics what it takes to be a great investor. These are not poppy cock. These are sorry if you if you say that one more time. Uh no, okay, So we already talked about a desire to learn, a thirst for knowledge. Uh. The next characteristic that we wanted to get to is patients because the truth is that

investing it is a long game. When when we talk about investing in the market, we're talking about like typically investing at a minimum of five years, if not five decades, and so over that course of time, you're going to experience a lot of volatility. You're gonna see a lot

of ups and downs. And it's important to maintain that scope to understand that you are investing for the long haul in order to see out those ups and downs, right because in reality that you know those fluctuations, that volatility, those aren't bugs, right, Like, those are features of the market. Uh. And if you are too focused on the near term and you see the market crashing, you see you see a dropt Well if if you don't, if you don't have a thirty year time arizon, you're freaking out in

that stress. First of all, it's not good for you, but then secondly it could potentially lead you to make decisions that are not wise. And the same the opposite is true as well. Right like you start, you see something taken off and you're thinking, oh, my gosh, is take it in. I need to jump on that to make sure I don't get left behind under chairs of bed bathroom on stock right now exactly. And were you to do that, you'd be out a lot of money right now. And so being patient, having a proper view

of your your time frame super important. Well, it makes me think that there was a tweet I saw recently from Alex Lieberman who started Morning Brew, which I think is just a killer email newsletter. I mean, it's not quite as good as the How the Money newsletter, but you know they're doing what they're doing, all right, They're trying. Yeah. Well,

then I have a lot of respect for Alex. I think he's great, but but he asked this question of his followers, Hey, if you wanted to turn a hundred thousand dollars into a million dollars within twelve months, what

investments would you make? And the only thing I could think when I read that was, if you're trying to grow your money ten x in just a year, chances are you're putting in at too much risk and there's a really big chance you're gonna lose it, or at least lose a big portion of it, because you have to make risk of your bets if you're not patient

enough to see that hundred k grow a lot more slowly. Right, The greedier you get, the less patients that you have, the more likely you are to invest in a way that doesn't align with your long term goals and then puts your capital a whole lot more risk. Yeah, fact is that's that's kind of an invalid question. Yeah, like like the same question. Yeah, Like how could you ask, uh, what's the best investment in order to turn a hundred k into one million? It's like, well, and in reality,

that's not truly investing. It feels a bit more like like gambling to how do you do that over twenty years? Like that's a different question, right, Yeah, we can talk about that how to do it that is investing versus something. Yeah, a shorter time frame like that feels a lot more like speculators. Literally, if you're doing this, I would take the hunter k to Vegas, Like that's the only legitimate answer then, I know, probably be the most fun way to do it as well, Like could you imagine going

to Vegas with a hundred k? I've never have you been to Vegas and like gone to the casina, dude one of these days. Because I feel like there's something. There's just something that I think I'm gonna learn when I go and do that, right, Like, I feel like there are going to be certain life lessons, not because I'm trying to strike it rich, but just like we're

talking about earlier, the process of learning there's something. But you know, from exposing myself, they're going there with a certain amount of money and literally betting it, knowing that there's a good chance I could lose it. All I want to experience that I've gambled. I've gone to Tunic Coup before, but I bought a lot of the ticket. But I mean I bought the Megan millions or whatever, a few weeks ago. I kept it. You kept as

small though, right you might one ticket. Yeah, technically that's not totally true because in Georgia they require you to put tim Bucks in if you do it via the app. And I had downloaded the app, and so I did ten dollars, which I was kind of pissed about because because I wanted to drop too. In reality, I did more. I did some upgrades or something. It's a total sham. But even still, I do want to go to Vegas

one of these days. But what we're talking about here is the opposite of going to Vegas, which is being

patient with your investments. Uh. And like like delayed gratification, you know, like that might come easier for certain folks, but delayed gratification is the direct action that accompanies the virtue of patients, right, like you just wait, you waited out, uh, And then like the true impact of patients is going to be shown through the magic of compound returns as your patient, and as you delay that gratification and wait, you get rewarded with those returns over the years and decades.

Because great investors do not get rich overnight. It takes time. Even though you're doing the right thing. You know, like, even though you're sacking money away into the market paycheck after paycheck, the results are they're often going to be like invisible for for months or even years. But over time, eventually you might start to think that your net worth

is looking somewhat impressive. Like say, after a decade, I feel like a decade that's the time frame when you're like, oh wow, okay, I'm starting to see what the compounding returns things all about. Whereas to three years in you're like, I don't know, I don't get it, you don't really feel it. But I mean both of us, I mean we're we're pretty young even still, even though we're getting older, I feel like we're young when it comes to our investments,

like to to to really see those incredible results. I feel like we've got another ten years ahead of us. I feel like they're on their way, they're coming, and those investments that that seems so small ten years ago, uh a few percentage points you know, of of your paycheck or me maxing out my my wrath I ra a as a self employed person. Eventually, at some point those are going to look crazy impressive, exactly a little bit over a long time makes a big difference, but

it takes patience to then reap those results. And so we've got a couple of characteristics down, but well we've got more to cover. And another one is becoming a specialist. Right. The more the more you try to accomplish, the less you're gonna be able to do well. I heard someone say the other day math that they were the thing they were good at was multitasking, and I was like, that's interesting, because I think of that. I like to

think of myself as a good multitasker. But I've been told and from everything I've read, people aren't like, it's not possible. It's not possible to be doing a few things well at the same time, and so I do think of it. It's I don't know, it's made me more critical of myself as I as I think that and try to just hone in on doing one thing at a time instead of trying to spread myself too thin. It actually makes me think of a recent like Stoic

proverb that I saw from one of the Stoics. I don't know who it was, but he who is everywhere is nowhere, and that is absolutely true when it comes to our mind, because if we're trying to do multiple things at once, we're not truly anywhere fully. Yeah, I don't know. It makes me think of two sport athletes and you're back in the nineties, like there were a few guys that were really good at multiple sports, like

Michael Jordan's. Uh see, he wasn't so great at baseball, as it turns out, even as the one of the most accomplished basketball players of all time. And I kind of wonder if you'd just stuck with bass, like how many championships would you have? Maybe maybe eight? But you know, Bo Jackson, he was a pretty good two sport athlete. We had Neon Dion Sanders here in Atlanta, and remember that guy, he was pretty good at both. But they're

the exception to the rule. And and we're not saying that doesn't mean that you can't have multiple investment accounts that you have to specialize in just your four own k or something like that. Of course you can, and you probably should have a roth IRA and you should also be using let's say your HSA in order to invest in your future too. But if you're spreading yourself too thin by investing in too many different types of

asset classes. That's that's what I'm talking about. Or if you're investing in let's say a dozen or more individual stocks, you're way more likely to make mistakes that are gonna pamper your progress. And again, we're not trying to be like Warren Buffett. If we had all the time in the world to research these companies, to dig into their financials, we might be able to be uh investors on par with Warren Buffett. But most of us don't have that time.

So we have to specialize, and we have to we can't spend ourselves too thin, or we're not gonna be good at any of the things that we're attempting to do.

That's right. Yeah, we're talking about being focused here, uh and like generally speaking, for a lot of these different characteristics we're talking we're talking about the stock market, but this is especially true when it comes to real estate as well, because we know we talk about going hyper local and finding the particular path, the specific path that

makes the most sense to you. But if you're looking at condos and quad plexes, you're looking at apartment complexes, you're also thinking about maybe doing the flip, maybe starting your own HDTV show. I'm gonna all the above, man, let's go at all. If you do all that, the chances that you accidentally ignore an important red flag about at property, or maybe you fail to crunch the numbers well enough before making an offer, the chances grow significantly

that that happen. And so when we spread ourselves too thin, we are often going to end up doing everything, maybe a little bit more poorly than you would otherwise. So limiting our scope and becoming experts on just a couple of things, becoming those specialists, we think that will increase our chances of success markedly. Yeah. Man, that makes me think of simplicity. Right. That is another just intelligent investors value simplicity because the more complex something is, the more

likely it is to be a bad investment. Right, I'm looking at you, ad two kinds of annuities or awkward mixtures of life insurance and investments. If you can't, if you can't explain the investment that you're taking into a seven or eight year old, chances are you probably don't quite understand it fully yourself, and you've let someone else convince you of something based on faulty assumptions and bad

numbers and just an excess of exuberance. And so it's kind of like how the best writers they actually avoid the most flowery, cut ci language, the ones who are okay, they're using their the source like a much uh in order to make their prose sound better than it actually is. The absolute best writers they don't need to do that. And and similarly, the best investors, they don't need to get too cute with their money investing in things that

are more complicated. Those are those are usually more hassle than their worth, and they're gonna they're gonna push you into a worse place when it comes to your overall investment choices. That's right. Yeah, so we're talking about keeping it simple. We're talking about having a high degree of focus. You mentioned being a specialist, being patient, being thirsty for knowledge. Another characteristic is to be blissfully ignorant. It sounds like

the opposite of thirsty for knowledge. Mass so please do tell we do not want investors to pay attention to the results. And this again kind of goes counter and to maybe what we've been saying so far, because you might be thinking, well, I'm investing to grow my money idiots. I need to be focused on the results. They're kind

of important, uh, And you're not wrong. But the more you're checking in on the growth that you're experiencing, the more likely you are to tinker in order to just juice those returns and see if you can kind of outsmart the market. But those changes are often implemented as an emotional reaction, not because our actual goals have changed, and not because the way that we were investing no

longer makes sense to us. We're making a knee jerk emotional reaction to buy or sell or to invest in something else, And so ignorance is bliss in so many areas of life, investing included. It's a it's a good idea to check in maybe just once or twice a year if you want to update your net worth uh, and to have a general idea of where you are at. But other than that, we would just recommend that you,

for the most part, just try to ignore it. Yeah, if the market, ladies, it loses like three percent in one day, you don't want to log into your accounts and see the red and then do something about it. That's actually what I love about when we talk about the robo advisors. Matt Betterment is the best of the robo advisors, largely because they implement so many great behavioral tools to help people stay the course. Um, they're kind of like, wait, are you sure you want to do that?

They're holding people's hands to help them make smart decisions to help them be better investors, which I think is cool. And what we're talking about here is being indistractable, centering our attention on what matters to us and ignoring the headlines and the noise that are kind of floating all around us. There's like an endless stream of predictions about what the market's gonna do today or tomorrow, about recessions, are we in one, are we headed for one? We're

talking about macro trends. There's no shortage of people on Twitter or on CNBC telling you what they think is going to happen. But here's the thing that is noise, and it shouldn't impact our day to day decisions in the least. And then another benefit is that those civil choices you set in motion, they just allow you to going back to focus. They allow you to focus on the stuff that really matters, which often has nothing to do with your portfolio, keeping it simple. I'm talking about

living life, man. I'm talking about riding your you know, riding your electric skateboard or whatever it is that you want to do. Talking about doing the normal stuff and not not having to think about constantly like well, do I need to buy yourself? Do I need to make a shift here? Do I need to change things up based on what's happening today? And if you're taking the long term approach, if you're taking the blissfully ignorant, sim

pull approach, you don't have to think that way. You can kind of like tune that stuff out completely and get on with your life. Yeah. And one thing that's worth mentioning as well, right, Like we're talking about tuning out all the noise, and folks might be thinking, well, man, Joel, you'll talk about the meme stunks, you talk about crypto, you talk about whatever crazy thing that Elon's tweeted recently. He's talking about buying another soccer club, maybe buying a country.

I will say we we have not talked about Elon Musk very much, even though the headlines all the people love to Halon elong and they're like, but they publish headlines about him on every single little thing he does. We we we try not to major on Elon musk Well. What I'm saying, though, is that we do talk about these things that we're telling that we're kind of from a very high lofty perch, saying that you should be ignoring. But but wait a minute, you guys are bringing this

to my attention. I wanted to clarify as well. The reason we talk about those things is because we think it's funny, right, Like, like, we're not talking about those things because we think that that is actually where you should be putting your money. And usually what we're saying is, hey, this is a trend that's happening, and do the opposite,

and here's why and how you should avoid it. Because if you let this thing become too influential on your thought, if you let the cryptocurrency spike in price, you know, not now, but like of a year ago, if you let that influence your decisions now, in all likelihood, you're gonna be poor in the end because of it. Exactly. We we put it out there as a warning. And so even though we do talk about these things, it's important to be aware of them and for them to

be on your radar. But hopefully you're not thinking, oh, wait a minute, these guys are making how much and you ignore the part where we say, uh, you should not be doing that. We hope that that's not the case for you. Those are the headlines, but what you're not seeing is all the people on the other side of that trade who lost a lot of money, exactly.

And you know it's it's worth pointing out to a lot of what we're talking about here in this section is about removing things from your life, right, Like we're talking about cutting out the note, like we're talking about curating and culling and cutting. Uh and yeah, like in the first section we talked for a little bit about in putting new and proper things into your mind, like the proper knowledge and who you should be learning from.

And but there is a lot of information out there, just like we said at the very beginning, and so much more work I think is required of us to put the blinders on, because we are like, there is no shortage of information of that investing advice. And I think it's really interesting that we may not have been used to limiting the inputs of our lives. But I do think that that's something we need to implement more

of in our life. It's more important now than ever because there's never been so many people vying for There's so much stuff out there, there's so much media, there's so many podcasts, there's so many books. It's never been

so readily accessible. So right in our fingertips to have a hundred people screaming at us telling us what to do, and so we have to find the right people who probably aren't screaming, trying to help us figure out what the best course of action is for us, and not not just trying to sell us on what's best for them or what's most beneficial in the here and now, right in the very moment. Yeah, the investing guys that are screaming, you just want to completely stay away from

that guy. If they're read in the face, veins bulging in the neck, you're like, oh, sorry, man, I think I wanna avoid you. We try to stay calm when we're talking about this stuff right in. Another Another characteristic math that we would say that great investors possess is that they consider tradeoffs well. They think through risk and reward. There's obviously there's no free lunch in life. For example, let's say you say yes to one of those free

state dinners. Typically you're going to be sold a really crappy financial product like an annuity, and so that free lunch could actually end up costing you a lot of money. Great investors, as it turns out, they're able to figure out what the tradeoffs are between different class, asset classes and different fund types. For for instance, like sticking all your money in meta stock right now, like Facebook right because you assume that virtual beers with your friends are

the future. Nothing sounds further from the truth. Yeah, nothing, So like that's like the opposite of what I want to do. I would rather fat beers, Like what does the FaceTime a friend who lives somewhere else than meeting him in the metaverse for a beer? But the reality is meta stock It could double over the next six months as the metaverse is starting to see maybe some

signs of life. I don't know. But the reality is that the downside is steep to if everyone realizes that in person beers are superior in every way, which they might already know that, well, uh, then it could tank that stock and maybe your bet that had a lot of upside. Well, it's also got a lot of potential downside,

so knowing your personal risk tolerance is important. It also helps you avoid speculation and gambling behavior because one of the most surefire ways to help you experience less risk while getting most of the upside, it's just by investing in low cost index funds. But knowing those traineoffs, knowing your personal risk and reward is going to help you make decisions that allow you to invest in such a way that you don't feel compelled to make changes based

on curn events. That's right. Yeah, So those are some of the characteristics, and it turns out, Jill, there's actually a subset of the population of investors out there who are already doing this. Who are these people who have already implemented a lot of these these characteristics into their lives, And so we'll get to that's as well as how it is that you should go about starting to invest your money. We'll get to all that right after this break.

All right, for folks out there who want to be a great investor, which doesn't necessarily mean being some ninety year old billionaire, It just means investing in a way that you can continue to do weekend, week out decade in, decade out, so that you have enough money on hand to become financially independent earlier than most. That's what we're shooting for here. Well, Matt, you tease to kind of a subset of the population who has more figured out. You want to reveal who that is? You do it? Okay,

it's women, it's the ladies out There's right. So it might sound weird, but a Fidelity survey from like five years ago found that women end up talking more money away on a regular basis. I think it was nine percent of their paycheck versus eight point six percent for men. And so yeah, women are are typically investing more of

their money than men do. And if you if you want to talk about something that's very much in your control, it's your savings rate and how much of the money that you save they were able to stock away into those tax advantaged accounts. We would love to see you increase your four when K or your TSP contribution or your four oh three B contribution like clockwork every time you get a raise, but you might not even want to wait until then. Right, maybe maybe you can increase

by a percentage point or two. Now, the reality is that You're barely going to feel it in your paycheck, but future you is going to be thankful that you did more right now. So, if you want to be a successful investor, you heard it here first, you I want to think a little bit more like a woman. That's right. And not only do ladies invest more of their income, but they also tend to see higher returns. Again, this is according to the Fidelity study based on the

average of men and women that they studied. Uh. And one other reasons for this is because women tend to mess around with their investments less often. Men, turns out, our thirty more likely to make regular investment trades and fiddle with their accounts than their female counterparts. And so what that means is that the average woman is taking more of a long term view, which actually leads to more success and larger balances at the end of the day.

And so yeah, you know, focusing on on these two characteristics, investing more every page a check and then touching your investments less that will massively improve your ability to build wealth. Uh. And what's also great here is that neither one of these two behaviors is overly complicated or complex or requires like a ton of discipline. Just literally do less. Yeah,

that's what we're trying to get you to do. Do more on one hand, put more money away, and then do less by not doing anything once you put that money into the index fund of your choice. It's it really is as simple as that. And we like to make it more complex and make people think that they need to jump through a bunch of hoops in order to be a good investor. But if if you boil it down to just a couple of things, that's really key. And and so let's talk about how to do this

map because you're also going to learn by doing. You're not gonna be perfect. There's just there is no perfect when it comes to investing. And you you don't necessarily need to hire someone in order to be a good investor. I think we have to put that out there too. It can help to have a coach in your corner. We think that more folks need a money coach than

they need a financial advisor. Somebody like Erica Taylor, who we had on the She can help you think through budgeting and cutting expenses and increasing your savings and and even getting started investing. Whereas financial advisors they can make sense for some folks, But we would say cultivating the traits we're talking about here can help you become the kind of person who can effectively d i y their own investments. No incredibly expensive person uh necessary in your corner.

And if you feel like you do need somebody's help, typically most folks actually the help of a money coach more than they need the help of a financial advisor. That's right. Coaches focus more on behavior as opposed to financial advisors who are looking more at the nuts and bolts. And oftentimes we already know the nuts and bolts, we just need maybe a little kick in the butt when it comes to actually doing the dame things. And sometimes financial advisors are are focused more on the big picture.

And it turns out there's a lot of like small changes that you can eat more easily make in your life that are gonna make a bigger difference behavior in psychology, part of it that that they tend to focus on UH. And so let's kind of talk through some of the easiest ways that you can get investing, specially the different accounts that you can be investing in. And first we want to mention the employer match, because if you've got to work sponsored account with an employer match, you better

be getting it. And you know this is this might be kind of like Noah kind of advice, but there are still so many folks who are not doing this. Somewhere close to thirty percent of folks who have access to a workplace retirement account either aren't contributing at all or they aren't contributing enough to get the full freebie basically that their employer is laying out for them. This

is why on our money gears. Aside from having some cash like if you you know a little bit of cash in the bank, you need to be getting that employer match and literally money number number two besides having two thousand, four hundred seven dollars in your bank account. The second thing we want you to do is get the full employer gear you Number two is is massive if that's a gear that's available to you for sure, so employer match that's one how to. The other thing

is tax advantaged accounts. Like after scoring that free money from your employer, the next thing you want to do is to take advantage of accounts that allow your investments to grow in attack sheltered way. And these are accounts like four oh, one ks t sp s if you're a federal employee or you're a member of the military. I RA as individual retirement accounts that any of us really have access to, and h S A S and last,

but but also least actually via cony nine accounts. Those are tax advantage, but those are are our least favorite because saving for your kids college should be a lower priority, a much lower priority on your financial bucket list, compared

to staving for your retirement. It's not that five nine accounts aren't good, like those are excellent accounts if you are looking to say, if your kids college, but compared to you putting a side money in your wrath, uh, if that's your only retirement account, well that definitely needs to come first, no brain or choice there, Rath all the way every time. But if you focus on growing wealth in those other ones via simple index funds or target date funds, there's no need to go any further.

If you don't want to write. We actually sent out a newsletter a few weeks ago, Matt talking about how you can become a millionaire really easily by just maxing out one of these accounts. That's right for a few decades and with something like a roth IRA A the annual contribution limit. It's only six thousand dollars, but you can still become a millionaire investing only in a roth IRA, which I think is saying something. It means a lot.

It says these tax advantaged accounts are really important. You should prioritize those soccer as much money you can away in those accounts. They're really the best wealth building tool that's available to us. That's right. Yeah, And so some of those accounts, like the IRA, you can set up on your own without an employer, but definitely UH take

advantage of those employer sponsored accounts. But the thing is, if you work for yourself, that's that's that's not a big deal, because there are awesome accounts available for you that allow you to sack away even more money then you're traditionally employed. Friends, if you're so inclined, the step I ra A and the solo for ohn k are are the two worth looking into. And if you have a high deductible health plan, you can open up your your own hs A, your own health savings account as well.

It just takes a little more intentionality because income you know to is to be maybe a little more irregular if you own your own business and plus you don't have an employer, making it easy to contribute, perhaps on a bi weekly basis, But it is still super important and not terribly complicated, and it's one of those workplace benefits that you can participate in as well, even though it doesn't feel like one of those free benefits because you know, with your friends who have all of their

healthcare coverage provided for them for free, or you know, maybe they have a match, well, guess what, you can suck away a ton of money as well. Yep, you can. And then the next thing. Let's say you're a high income earner or you're just a go getter who's hoping to retire early. Your brokerage accounts are a great next

step worth considering. Even though they don't offer you any sort of tax advantage, they can be really helpful if you're on the path to let's say fire right, you wanna you want to retire early at the age of forty five, and a brokerage account can help you get there because you're gonna need to pull those that money out. You need to pull some of those funds out to live before you reach retirement. Age, it's right, you gotta bridge that gap that's right before you hit retirement age.

Investing in real estate, that's another one of those things you can consider. It's worth molding over if you're if you're kind of interested in investing in real estate, we'd say becoming a mom and pop landlord has a lot of benefits for investors. It's definitely a route to consider if that's something you're interested in. But beyond those basic pieces of how to advice, you know, which route you decide to go in is largely going to be dependent

on your specific goals in your specific timeline. Like investing in real estate. It's not for everyone, and some people are like, listen the four one case, set it and forget a thing and just putting more and more money into that every year. That's easy and I don't really have to think about it, whereas if I start investing in real estate, I do have to think about it more Right it is on my radar. I can't just hop on my electric skateboard and go because I gotta

go fix the leaky toilet. Those are the kind of things that you should consider. But in reality, Matt, this episode, it's all about the characteristics, right, and not even the how to But we just wanted to provide that here as well, because the reality is a lot of people are like, cool, I'm down to develop those characteristics. I see the need to to be more patient, right, see the need to pick something that's a simpler option than

maybe the way my assets are currently allocated. But yeah, so much of the specific how to direction it will be determined on your specific goals in your specific timeline. The reality is, though, that those characteristics of investors that we talked about, those are necessary for all of us to develop no matter which how to direction we go in.

Those are crucial to us succeeding in whichever path we choose. Yeah, this characteristics hold fast regardless of what you're what you want your personal life to look like, because I think that's a lot of what those additional steps and how you want to achieve that sense of financial freedom, A lot of that is going to come down to what you want your life to look like like. If you want to be uh that mom and pop landlord where you're you know, occasionally, yeah, you are going to have

to take some calls. You are going to have to show the show the property but you know, on that note, one more thing that we should mention as we wrap this puppy up. Investing it's great, right, but we do not want you to overdo it. You should have some other life, probably parties. Like here on the show, we

we we drink beer and the craft beer equivalent. That's a huge part of our ethos of how the money, uh, and so building wealth, starting to create a nest egg for your future like that is great, but it is possible to focus too hard on that goal while you are depriving yourself today, while you're wrecking maybe your health, maybe you're wrecking relationships, you're wrecking all of these other things that you will not find on a Google sheet

or within an Excel document or on personal capital. There there are things that are not reflected within your net worth UH. And so we want you to find ways to spend money freely on the things that matter to you, while saving and while investing for your future. Because we believe that balance is impossible to fully achieve, but it is definitely worth consistently striving for. And that's what we do here on the show, and it's what we're constantly

seeking after in our own lives. As well. Yeah, it's like a pendulum, right, and you're always kind of trying to find that center, but you're always off by just just a little bit. But it doesn't mean we're always we're not always striving to get to that place right where we are good investors, but where we have enough free time to have great hobbies and great relationships, great family lives like we want we kind of want all of the above approach, and and sometimes that that's not

gonna lend us being becoming the next warm Buffett. Like it's just not because when you actually look at some of the lives of some of the greatest investors, their personal lives were not so great. And so if you really want to be the best investor out there, that means you're gonna have to sacrifice a lot of those things,

just like Michael Jordan's. If you want to be the best basketball player so good at baseball, it means you're not gonna make a lot of friends on the basketball court, and your teammates are not gonna love you at times until you hoist the championship in the year and you're like, boom, we did it. But all along the way, it's a difficult route because you're so hyper focused. We're not talking about that. We're talking about being a great investor, not

being the best investor. And I think there's a difference, there's a real meaningful difference in trying to become the best versus becoming great when you can become a great investor actually pretty easily, and you can still kind of retain the things that matter team most in life while I'm doing that. Again, that's a well worn path that's proven.

Like Warren Buffett, he couldn't he couldn't talk to girls like That's one of the things like as a teenager as he went off to school that he was terrible at. I guess he spent all this time reading about companies. His marriage fell apart too. I mean, I think I read one story about where one of his children was on the floor or something and he like stepped over his child to walk up to the office. Is John

having a tantrum? And there's just there are all these things you sacrifice sometimes in order to be the best at something, and we're not willing to do that. We don't want to be the best podcasters, we don't want to be the best investors. We want to be really good at what we do, but it wouldn't be worth the sacrifice in order to get to the number one slot on iTunes or whatever it is. I mean, the negatives would just far outway the positives in that case.

That's right. Yeah, we're just trying to be great all around, dude. And a part of how we do that, like, like we just said, is that we enjoy a beer during every episode. Man, And this was Octoberfest by Dry Candy Brewing in Kennel Saw, Georgia. What your thought on this seasonal beer? Yeah, so obviously I don't really have october Fest about the year. Much of the time they're not really available. But so I don't even remember the last time. I haven't. I don't. I don't know if I had

one last fall. But I thought it was good, man, I thought it was good. It's safety, it's multi it's kind of like a very melty if you like brown nails. It's like a much lighter version of a brown nil. And it's it's not my go to style, that's for sure, um, but it is like it's kind of one of those Okay, hey, I like regular beer, but I don't like any of

the fancy stuff. This is one more step into beer for for people like that, finding in october Fest this time of beer on the shelves, you might be like, oh, I'm pleasantly surprised, I actually like this beer. So for the beer newbies or novices, I think october Fest and this one if you probably don't get this one where you live unless you live around where we live in Georgia. I don't think this brewery distributes very far. But or look for a mars En because that's it's the same style.

Oftentimes though, like mars N's were served. It's like the German word for it. I guess maybe, yeah, yeah, like

that's the actual type of beer. October Fest is more of like a brainding, like like a marketing thing, like Marsen is March in German because it was a beer that they brewed because back in the day they weren't allowed to brew beer during the summer because it was too dry and the high temperatures and having the fire and boiling water could lead to buildings burning down and whatnot, and so they actually outlawed brewing during the summer months, and so this beer they would brew in March and

it had a higher alcohol content. It had higher hops and higher malts, which means generally speaking, more flavor than like the typical lager or pilsener that they were used to brewing. So that's a little Marsen october Fest beer history for you. And it's called october Fest because they would it would sit in like the basements or the sellers all summer and then they would drink it in

the fall. There you go, There you go. That that would be another one of those things like I have no desire to go to Mount Rushmore, but I would love to go. So we just mentioned Mountain Rushmore in the investing Mount rush but I would love to go to Octobertoberfest. Yeah, I would be a lot of fun. Maybe how do Money trip with some listeners in Vegas and then professed, yes, I'm in I'm in opposite directions,

but let's go. We can make them both happen. Pull it off, all right, that's gonna do it for this episode. For folks who want the show notes and links to everything we mentioned, we'll put those up on our website at how to Money dot com. That's right. If you have not subscribed to our newsletter, head to how to Money dot com forward slash newsletter. It is free, It shows up on Tuesday mornings, and it has all of the personal finance news that you're gonna need for the week,

along with some encouragement to get you through to Friday. Joel, that's gonna be it for today, buddy. Until next time. Best Friends Out, Best Friends Out,