Perpetual Prudence: The Solution to Lifetime Investing

For the last 10 years or so I have been searching for the answer to lifetime investing. Despite all the blog posts I have looked at, all the Youtube videos I have watched, all the books I have read, all the Reddit posts I have consumed, all the discussions I have had, I am yet to find convincing answers.

You see, these resources are very good at providing a specific kind of information. They are good at detailing, well, the details. Don’t know what an ETF is? You will find your answer on google. What savings account is the best? There’s a subreddit for that. Which FTSE 100 ETF has the lowest fees? Someone wrote a blog post on it. Details are abundantly available on the internet.

However, when these resources attempt to answer the bigger, more difficult questions, they come up short. They give you the exact steps on how to invest in an index fund without really explaining why. Not in a satisfactory manner at least. If they do offer any argument to the audience, it tends to be half-baked. Overly-simplistic. Unsatisfying.

It leaves you asking the question “Wait, but why?”.

This blog will find the answers to these questions.

You would have thought that since I have been thinking about this for 10 years or so, I would have answers by now. You thought wrong. Although I have effectively eliminated incorrect ways of thinking about investing, I am yet to find a satisfactory answer. One that stands up to scrutiny. One that will give me (and you) the confidence to invest for the long-term. A robust framework from which to embark on the journey of wealth creation. 

At the time of speaking, I haven’t really set sail. In truth, the ship is still in the harbour. But it is better to be in the harbour than at the bottom of the ocean.

What can you expect from this blog?

This blog will discuss all manner of things pertaining to Lifetime Investing. It will focus on questions, topics and material that either does not currently exist or has not been explored in satisfactory depth.

This opens the door to a whole plethora of subjects. We will explore these in due time. Have patience.

How will we do this?

  1. Asking questions. Investigating important questions that have not been currently answered. Taking lines of inquiry to their logical conclusions, or conclusions fit for our purposes.

  2. Research. Sometimes the answer will not simply appear in my brain out of thin air (in fact, it often struggles with basic tasks). Some level of research will have to be undertaken to help answer the questions mentioned above.

  3. Data. I react to data the same way that a deer reacts to a rustling in the bushes: scepticism is the default setting. One must proceed with extreme caution. However, data can be extremely useful. Numbers don’t lie (well, sort of).

It is by using these 3 investigative techniques, among others, that one arrives at conclusions. 

Principles

I don’t have all the answers (yet). I have, however, formulated some principles. Some over-arching themes which form a basis for further exploration. I haven’t formulated an exact route on a map but I at least know which way is north.

These are the Principles of Perpetual Prudence. They will guide us on our journey.

  • Long-term. Life is a long time. Lifetime wealth accumulation is a long game. Therefore, lifetime investing should have a long-term focus.

  • Risk-focused. Risks matter. Effectively manage the risks and the gains will take care of themselves. Focus on avoiding taking on big risk as it can severely hurt you.

  • Limited downside. A natural consequence of being risk-focused. Limit the downside and the upside should take care of itself. If you avoid big losses you won’t lose (in the long-run).

  • The big picture. Details matter but the big picture matters more. Avoid getting bogged down in details. When it comes to lifetime investing, your strategy matters more than how exactly it is implemented.

These will guide everything we do. They form the framework to work from. When we think about anything, we will view it through this lens. They will be our North Star.


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2 thoughts on “Perpetual Prudence: The Solution to Lifetime Investing

  • June 24, 2021 at 7:45 am
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    Started reading your blog and couldn’t stop until I read every last article- please keep posting and tweeting – I’ve found your insights valuable and have already used them to move towards a more “bottom up” and “long term” approach incorporating avoidance of ruin.

    Reply

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