Your Personal Growth Strategy is like Value Investing - Don’t #GameStonk it.
Superb personal and professional growth appreciates over time like a well-conceived investment strategy.
Picking the right asset classes (Health/Wisdom/Spiritual assets) to invest in can produce lasting consistent positive growth, even when there is chaos around you. By continuing to invest your appreciated capital (accumulated personal growth), you get the compounding effect of growth over a long period of time. I have spent the last year playing in both investment and personal growth domains and in this article, I aim to draw from seemingly disparate fields to demonstrate an investment ethos for better personal and professional growth.
So, it starts with the stock market?
From what I gather, the stock market is where investors connect to buy and sell investments (most commonly, stocks), which are shares of ownership in a public company. Investors or traders who buy and sell stocks hope to turn a profit through this movement in stock prices. The stock market as a whole is a cyclical system of vicissitudes in ups and downs, but with the overall upward reach. We are in a 9 year “bull market” despite the 2020 crash. The market is predicated on, wait for it, growth.
Just like the stock market, there are amazing personal growth gains to be made, but you have to pick what works for your plan. Stick with me here; picture that you are the investor in yourself, the asset classes are not just your wealth, but your health, wisdom, spirituality and anything else you desire. The individual investments you make can be, for example, the books, meditations, healthy foods and a myriad of other choices. Using three market measures of discipline, capital and value, I will separate two extreme camps of thought.
Camp 1- The Speculating Gamblers
With the influx on new mobile-forward, commission free trading apps has given anyone with an internet connection the opportunity to trade in the stock market literally from the swipe of a finger! Enter the new age group of retail investors who are risk-hungry, YOLO and FOMO believing, to the moon proclaiming group of modern stock market disruptors. Most recently, thus camp are best known for their reddit group Wallstreetbets, famous for egging each other on to pour their life savings (and more) in to a one-stock-bet, pumping up the value of a assets like GameStop (GME)and Bitcoin (BTC) by buying and hodling (holding) it. Who, impressively so, managed to upset some of the biggest hedge fund managers on the planet, by going against hedge “sell” consensus for GME. Sounds pretty exciting, right? If you want instant gratification, this is your camp.
Here are your 3 guiding principles:
- Discipline: Just like the WallStreetbets forum, this camp are swept up in the volume of noise and distraction, heeding the advice of 100,000 others, running with what the group wants them to do. This group are often glued to their device, victim to every anxious price rise and drop that occurs as their capital is thrown about like a violent ocean. Gripped with bouts of pure elation or fear. There is no constant, no operating rhythm and just like our growth, this is an uncertain ride.
- Capital: “Pump and Dump!” is a popular term by this camp as they invest heavily in a single asset, usually using aggressive options and leverage trading techniques to increase the multiplied benefits in a day or a week. The hype and spur of the moment investment produces feelings of giddiness to be part of something reaching higher and higher, but as we have learnt from GME and *BTC, what so rapidly goes up, must come down. This camp are often making huge profits and huge losses month-by-month. The inconsistency in the market means that there is no way of telling what is next, providing a cortisol-fuelled ride to say the least. Now, to caveat, many people have become famously rich literally overnight, but there are just as many losers; One man reportedly took out a $20,000 personal loan, investing in GME, only to see his investment plunge 80%.
- Value: This camp love investing in asset classes with no intrinsic value, something at a great price with a margin of safety to rise slowly over time. BTC has no intrinsic value and GameStop is a company in financial turmoil, yet both are pumped up by the herd effect of retail investors. Providing a fleeting period of intense earning potential. But when all is said and done, the foundation is weak and the risk is high.
Camp 2- The Value Investors
The second group is often overlooked due to the sheer simplicity of their strategy, they are a group of tried and tested value investors, who have carefully research every detail of great asset classes (usually stocks) since the turn of the 20th century. They make well informed decisions and exercise extreme self-discipline in order to ensure excellent returns on their investments. This group uses great judgement, never forget the lessons of the past and think-long term. Some of the finest of these investors are known as gurus, like Wahei Takeda, who (incorporating a spiritual aspect) refers his leading principle as the practice of Maro; The art of being thankful for all things. It would also be rude to mention the Value Investing Master, Warren Buffet, who said:
· “Someone’s sitting in the shade today because someone planted a tree a long time ago.”
· “Risk comes from not knowing what you’re doing.”
· And, “Nobody wants to get rich slow anymore.”
Interestingly, it seems that no one seems to have the patience to personally grow slow either.
Here are your 3 guiding principles:
- Discipline: This camp thoroughly does their own deep work, due diligence and research to make the best decisions for themselves. Are un-swayed by the swaths of voices yelling at them to do this and that, they ignore the calls to join the chaos due to FOMO and carefully choose what knowledge they acquire, what people they hear and when they are exposed to these. They make as little a decisions as possible about when to invest, because the plan is steadfast and long-reaching.
- Capital. Value investors can start with little capital and patiently use the magic of compounding interest (multiplying abundance) to exponentially grow their wealth over a number of decades. As their view is long and their budget is thoughtful, they take tranches their cash and slowly scale in to each carefully selected investment with dollar-cost-averaging.
- Value: The Value Investor picks a handful of great companies, across a diversified cross section of markets, industries and asset classes that are built to last, with intrinsic value and that pay dividends. They do this, or, they can pick an even easier model: finding a wonderful fund that outperforms the market average, by dollar cost averaging over a long period. It is that simple.
How does this stack up?
If you bought one Bitcoin at a value $10,000, which you could have done in 2017, 2018, 2019 or 2020 (Meaning the price retuned to these values each year), today that would be worth almost $50,000 now and could be at $100,000 some time soon. Your money grew at a fraction of the time, but you need to be glued to the market to make sure you didn’t lose out, as your investment could quite easily go to zero.
However if you bought one of the most successful and low-risk Fidelity® Growth Company Fund. One of the most successful investment funds of all time. if you Invested $10,000, you would have almost quadrupled your money today. You can set and forget, checking in on your well conceived plan as infrequently as you wish. The return is not five-fold like BTC, but you can be certain of steady, constant growth for a long time to come.
In summary, I believe that there is some great things that we can learn from both camps. It is true that without risk, you don’t have reward, but seeking and long, well thought out plan for growth is proven to produce wonderful outcomes. I know which direction I will be taking.
When it comes to your personal growth are you a Speculating Gambler or a Value Investor?
*This is by no means financial advice. The Feel Good Blueprint holds no responsibility for how, whatever antithesis is of, #GameStonked or To-the-Mooned that you get. Please seek advise from a registered financial advisor.