Today’s post is about a book review. Reading is something I truly enjoy – especially non-fiction books. But truth be told, I did a miserable job when it comes to reading in 2018. And that’s a shame. For 2019, I don’t want to make any excuses. It’s so easy to find good reasons why you can’t do it. Let it be a full-time stressful job, social life activities or other time-consuming hobbies. Fair enough. However if something is really important to you, you will find a way. If not, you’ll find an excuse. Having said this, I will read at least one non-fiction book per month in 2019. Let’s see how important it is to me!
January has offered a perfect opportunity to stop making excuses. I had to travel to Australia for one week because of my job. For somebody who lives in Germany it’s a really long flight – 21 hours one way! Lot’s of time to grab an interesting book and get started. So a couple of days prior to my departure, I ordered three books using an Amazon voucher that I got for my birthday. Total expenses: €25 ($29). A good deal!
The Subtle Art of Not Giving a F*CK
I decided to start with a book called “The Subtle Art of Not Giving a F*CK”. What a promising title, isn’t it? Well, it turned out to be inspiring, funny and entertaining on top. Mark Manson, a blogger who has traveled the world, is the author of this book. At its core, The Subtle Art of Not Giving a F*ck is about choosing what’s truly important to you and letting go of everything else.
Moreover it’s a slap in the face to all the self-help books that preach the same message: smile more, love more, hate less. We are masters in chasing the good things in life and suppressing the bad ones at the same time. According to Manson, the desire for more positive experience is itself a negative experience. And, paradoxically, the acceptance of one’s negative experience is itself a positive experience. Sounds confusing? Let’s put it this way: sometimes things just suck and we have to live with it.
3 Takeaways for Investing
“The Subtle Art of Not Giving a F*CK” offers some interesting concepts that might be helpful in everyday life. These concepts are neither new nor revolutionary. In fact, some are as old as the ancient Greeks and beyond. Nevertheless, reading this book has opened new perspectives for me. Quite a few of them are touching the financial area as well. In the following I have summarized three takeaways that I found useful for my investing life.
1. Choose the f***s you give wisely
Let start with the key message of the book: learn to focus on the important things in life – and care less about the rest! In general people care way too much about too many things. This can include:
- Being polite
- Trying to be perfect
- Being respected by everyone
- The way other people think of us
- How to impress other people
- Being right all the time
While some of these things are not bad per se, giving too many f**** about it, causes us to lose focus of what is truly important. When we are constantly busy caring about what people think of us or whether we are right, we spend most of the time avoiding our real problems rather than dealing with them. And since problems never stop, avoiding them is simply a poor strategy. As stated in the book: […] “true happiness occurs only when you find the problems you enjoy having and enjoy solving”.
Let’s look at it from an investing point of view. Tell me if this sounds familiar to you: you check the market value of your portfolio everyday – or even multiple times a day. You worry about the declining prices of your holdings. Then you see all the bad news in the media and boom…your worrying increases even more. Frankly speaking, this sounds very familiar to me. But isn’t it the highest form of giving way too many f**** about things that don’t matter? Without any doubt, it is!
According to Manson, the best way to deal with it, is to honestly choose what is really important to you. In my personal case, it is building a reliable income that will allow me to do whatever triggers my passion. I don’t want to lie: this choice is accompanied with various problems. However those are problems that I enjoy having and solving. For the rest, such as daily price fluctuations or media headlines, I cultivate myself to give as less f**** as possible.
2. Pain is good and failure is inevitable to achieve great results
Nothing great in life comes easy. If you want an amazing physique, you must become comfortable with pushing yourself hard and literally going through some serious pain in the gym. This is what will bring you the results – let it be in the gym or any other area of your life! So please consider: pain is something good, it’s part of the process and a big accelerator for growth!
The last three or four reps is what makes the muscle grow. This area of pain divides the champion from someone else who is not a champion. That’s what most people lack, having the guts to go on and just say they’ll go through the pain no matter what happens.
Another unpopular ingredient is failure. Nobody wants to fail. It’s just a horrible feeling. We want to be successful in our job, have an amazing relationship and live a wealthy life. The mass media constantly presents us incredible success stories (while not showing the countless amount of practice and failure that lead to this success). Even our education system punishes failure and rewards success. So why the hell we should find something good about failure? Here is the answer: because failure is inevitable to achieve great results! The book makes the claim that […] “improvement at anything is based on thousands of tiny failures, and the magnitude of your success is based on how many times you’ve failed at something”.
I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.
The concept of pain and failure beautifully applies to investing as well. If I ask you, “What is your financial goal” and you say something like “I want to be financially independent”, your answer actually doesn’t mean nothing. Why? Because everybody would love to be financially independent and don’t have to worry about money. It’s easy to want that. However there is a second question which is more interesting: “What are you willing to suffer to achieve this goal?” What pain are you willing to sustain for it?
That one seems to be a far more important question that needs to be answered. I have no doubt that most people want to be financially free – but not many want to suffer for it by living frugally, forgoing consumption and investing vast part of their savings. It’s not easy and it requires a lot of discipline. But this “pain” is absolutely necessary to achieve success. You can’t have the victory without the fight!
3. Commitment creates freedom
A couple of months ago I’ve visited Prague and decided to go for a drink later in the evening. Sitting at the hotel bar and checking the drinks menu, I couldn’t believe my eyes. The Gin & Tonic section alone was six pages long! As you can imagine, it was not an easy choice for me. Actually I felt quite miserable having to choose between so many options. It turns out that this observation is proven by science, too. More is not alway better. Having an infinite number of choices can be paralyzing and exhausting. Barry Schwartz, an American psychologist, describes this phenomena in his best-selling book “The Paradox of Choice – Why More is Less”. The more possibilities we have, the less satisfied we are with whatever we choose, because instantly we think about all the other options we’re potentially missing out.
When it comes to investing, we have an endless pool of options to choose from. It already starts with picking the “right” approach. Fundamental analysis, technical analysis, value investing, growth investing, buy and hold, day trading. Should I go with individual stocks or index funds? What should I focus on: capital appreciation or income growth? These are only a few examples of the massive options overload. No wonder some people never start. It’s just more attractive to keep the options open and avoid commitment.
However commitment is the magic key to solve the too-many-options equation. You have to choose something and stick to it. In my personal situation, I decided to utilize dividend growth investing. I never claim that this is the best strategy in general. Because for someone else it isn’t. And that’s totally fine. Nevertheless the single act of commitment was very important to me.
Firstly, it was the trigger to start with investing at all! If I would still reconsider all the different possibilities, I possibly would have never started. Makes sense, doesn’t it? Secondly, commitment diminishes the pool of options. It makes decision-making easier and removes the fear of missing out. Today, I don’t care about investments that don’t fit to my strategy. Why should I worry how cryptocurrencies are doing or whether a certain technical indicator is forecasting an upward trend? I’ve chosen to reject all but only what truly matters for my long-term goal. That is why commitment gives us a certain degree of freedom. We are no longer distracted by all the unimportant. I simply focus on growing the passive income by consistently investing into dividend paying stocks. That’s it.
It all comes down to choosing the right things to care about. Because when you choose to give a f*** about the right things, you get better problems. Problems that you enjoy having and solving. And better problems inevitably lead to a better life. End of the story.