“Investing should be dull. It shouldn’t be exciting. Investing should be more like watching paint dry or grass grow. If you want excitement, take $800 and go to Las Vegas… It is not easy to get rich in Las Vegas, at Churchill Downs, or at the local Merrill Lynch office.”
-Paul Samuelson, Nobel Prize-winning economist
For decades, investing in index funds has been described in popular media as being boring but good for you, like eating more fiber. I think the media does a huge disservice to readers by failing to point out the fact that having a boring investment life lets you have more excitement in the rest of your life. In fact, I would argue that forking over your savings to a pricey wealth management firm with empty promises of finding you alpha is a recipe for a life so boring that you’ll be eating cat food in retirement (and it won’t be Fancy Feast).
In the few years since switching to Vanguard index funds, we have saved enormous sums of money on advisory fees, mutual fund expenses, and taxes. Rather than help pay for our financial advisor’s multi-million dollar Hampton’s beach house, we kept the extra savings for ourselves and bought a supercharged Audi with the proceeds.
It’s been a thrill to give our high-priced advisor the middle finger. When I slunk into the body-hugging cockpit of the Audi and grab the steering wheel, I am momentarily transported back to age five when I would imagine that I was an astronaut in the cockpit of the Space Shuttle counting down to my launch into outer space. When I hit the start button, the car lets out a devilish, throaty growl as if to encourage me to be naughty, and sometimes I reply by revving the engine a little to let mission control know I’m ready for take off. The whiplash-inducing G-forces that await is what index funds are all about.
So, work hard, and play hard. And don’t let anyone take your lunch money!