As investing is one of my greatest passions, I love talking about it to basically anyone who’s willing to listen. However most people are not interested in it at all. Many of those who listen and understand the long-term effects of compounding are unfortunately “Someday Islanders”.
What is Someday Isle? If you didn’t get the gist, it’s just a play on words for “Someday I will / Someday I’ll”.
“Someday I’ll invest”, “I can’t right now”, “I’m saving for x”, “In order to make any decent money, I’d need millions to invest in the first place”, “The game is rigged”.
These and many more are typical responses. I understand why people stay on the island. To me, the island is your comfort zone, the rut. Humans are naturally lazy, and we are wired to seek paths of least resistance. I don’t see any excuse for staying on the island when it comes to investing, because auto piloting your funds in indexes is a one-foot hurdle and allows anyone to participate in markets.
Index funds are a blessing. To put it simply, you own a large basket of all companies in the market. Most “professional” active money managers underperform the major indices time and time again (I’ll probably write another post on why this is the case). What the absolute majority of the population should do is put their money in low-cost indices, buy and hold for the very long-term and you have a very high probability of getting a satisfactory return.
I know getting off island is not easy, but you have to do it. The earlier you do, the longer your compounding runway. I’ll end the post with a book recommendation on the subject:
“The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns” By John Bogle.
This book is an easy read written by the one of the pioneers of index funds. So read the book and vote yourself off the island for good!
-IGTSKasimir
Further Reading
Warren Buffett – The Partnership Days (1956 – 1969)
Philip A. Fisher – Lessons From The 15% Man
The Best of Ben Graham – Security Analysis
Phil Town – The Compounding River Guide
Margin of Safety – The Most Important Thing
Intelligent Investing = Thinking In Probabilities
The Emotional Stages of a Value Investor
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