Milan, Getting Back to Work, & Your Side Hustle
From Milan with love.
Generally, I’m less exuberant, but also less hesitant with the market these days. Some short term and long term lessons — I’m pretty sure this market run-up we’ve seen the past few months is on solid ground. In the short term, certainty is over confident and the devil in the corner. So “pretty sure” seems to be alright here. But feeling solid about this market.
Secondly, the long term market outlook is strong. The administration’s planned pro-business decisions and how that will really impact the markets… makes sense, and looks good for the markets. Check me in two years, I’ll be right.
If Trump does what he has said he is going to do (which so far is the case), and if his party supports him, then we could see an additional three to ten years of bullishness.
Lesson here? You bet. Get in the market.
A few quirps from Mr. and Mrs. Pearly Pig’s mad rush through Italy… First. Milan has to be the most gorgeous smelling city in all the land. For a financial center, my frame of reference is, of course, New York City. A city with smells you would not right home to Mom about. But Milan.
Speaking of smells. Second — they weren’t kidding when they said coffee, wine and pasta. In that order. We’re in heaven.
Lastly, it’s always great to be in financial centers. Things move a little faster (I often prefer this), and people are focused and motivated. We’re headed south later this week, where we understand things move at a slower pace. In fact, it is the great Milan — Rome face-off. Those fast people vs. those lazy people. We will undoubtedly fall in love with both. But this post is coming from Milan this morning — a city with which we have quickly fell in love.
Last week we talked about doubling your money. You’re going to come to realize quickly that if you are to continue to follow what we’re doing over at the Pearly Pig and continue to read these goodies we’re putting out, you’re going to see this theme pop up very regularly.
Quick lesson. When it comes to investing, we have to decide to give up gratification that we would get today (by spending money) for gratification that we will get tomorrow (by spending tomorrow’s money). And our goal with investing is that we would have more money (gratification) tomorrow than today. So investing really is all about doubling your money as many times as possible between now and when you need it. Make sense?
I was on my way out to Peoria, Illinois this week to pick up a truck from a gent that works for Caterpillar — he is being relocated to South America — and his boss had just been relocated to Dubai. Not sure what will come up this week’s financial scandals that rocked the company, but looks like business as usual for now. I mention here because, if you’re familiar with the CAT story this week, then maybe you’re using it to keep you from investing. After all, it’s high finance, all about a lack of corporate leadership, and a story that looks pretty bad. A typical story that people use to decide to not invest. Let’s not make excuses.
Anyway, my buddy and I were discussing money, as we often do, and he made a pretty bold statement… especially since he knows my passion for this kind of stuff. He broke to me that, with his newly minted status of employee to entrepreneur, he had decided to pull all money out of the market and stash it in cash for three years, and then re-assess.
Now, this isn’t necessarily money he needs to float household bills while he’s getting the business up and running. He just doesn’t want to deal with market volatility while also dealing with the volatility and headaches of new business ownership.
I get it. Sort of. But like I said, no one said investing… i.e. growing wealth was going to be easy. It’s not. Most of that hard work involves checking your emotions at the door. It’s hard work.
Anyway, let’s take last week’s conversation regarding doubling your money, and apply it to my conversation this week with my buddy on our little road trip.
My buddy is 37, and he wants to retire at 65. He recently pulled about $50k out of the market (he also has an additional savings account stash of $25k for rainy days, so he’s got things set up well). His wife also makes a decent level of cashflow, so his goal is to not touch the rainy day fund.
You know that I try to double my money every five years (or more) — which also takes extremely hard work (which is why we let our Pearly Pig community hop on our back of hard work of trying to double our money).
So let’s do the simple math — he has 28 years until retirement, which gives us the chance to possibly double our money 5 1/2 times or so between now and then. Let’s do the long math now and see what that could look like.
First double (to age 42) — $100,000
Second double (to age 47) — $200,000
Third double (to age 52) — $400,000
Fourth double (to age 57) — $800,000
Fifth double (to age 62) — $1.6 million
Last 1/2 double (to age 65) — $2.4 million
So if he misses out on just that last 1/2 double, waiting three years to jump back in the market could cost him $800,000. Furthermore, if he loses an entire double then it could be worth $1 — $1.6 million. Yikes.
An old adage in the investment community, and one my mentor constantly reminded me of when I started out as a stockbroker in the nineties, is that “…it is not timing the market, but rather, time in the market.”
This is so true with growing wealth. We certainly try to find good opportunities in building our portfolio, and we try to sell those stocks when it is the right time to sell them.
But time out of the market can be a real killer. You can see it here. What if much of our double power comes from the bull market we may experience over the next five to ten years? (See my commentary at the beginning of this post).
What if he misses the power of a double? Or two? That is happening right now? Is a little peace of mind — based in not having to experience market volatility — worth $800 — $1.6 million of real cash? Or is this worth the hard work to make things happen and check our emotions at the door?
SXSW in Austin, TX is off to a big bang this year. Of course it is the home of people with multiple side hustles and main hustles and everything else. In fact, I’m not sure who coined the term “side hustle,” but it probably happened at SXSW. I have business partners and buddies all rocking SXSW with their main and side hustles this week.
This is the first year we’ve missed the SXSW circus for quite some time. So a big HEY to everyone experiencing FOMO this week in Austin. I hope you are having as many productive, life-changing conversations this week as you’d hoped. And if you are behind the pace, no worries, you still have six more days of SXSW glory.
After Mr. and Mrs. Pearly Pig’s crash-bam-boom whirlwind tour of Italy, we get back on the ground in the Midwest to focus on what happens next at the Pearly Pig.
You’ll be seeing some great stuff over the coming weeks, including an automated newsletter that puts my weekly’s straight to your mailbox, as well as a website that will collect my posts and keep track of the portfolios we’re building and making public.
Half the hard work, gang, in investing is the decision to take action. And we certainly want the wealth in our Pearly Pig community to double as many times as possible. It’s not about the money here, it’s about your personal impact. On how you live life. On your future generations. And on how you give back to those around you that need a helping hand. So let’s get to work together and make some great things happen.
Again, it’s super easy to follow along with our investing. Just go right here.
You just click this link and push the “Buy” button. Don’t have a Motif account yet? Super duper easy to set one up. Don’t want to transfer investments to Motif? Then put some new money to work — they make that super easy too. Want to do most of your work from your mobile phone rather than a computer? Yep — they’re app rocks. Now, let’s get to work doubling that stash.
Ryan @ The Pearly Pig
