I recently read an article on Marketwatch about some kid that lost his life savings doing some fancy stock market thing that I didn’t really understand. According to the article, this dude lost his life savings trading something called a “contract for differences.” Whatever that is, it predictably ended up not working out and he lost everything that he had invested. Not a 50% loss or something like that either. Literally, his investment went to $0.
I’ve always been interested in why people gamble with money in this way. It makes sense in the abstract – you’re investing because you want to make money and you want to make money as fast as you can. Why settle for normal when you can make it big overnight? If you had invested in Microsoft back in the day, or Amazon or Facebook a few years ago, or Bitcoin today- well, you’d be swimming in money.
This is how a lot of people view investing – as a sort of game where the goal is to make as much money as you can as fast as you can. It’s even stuff we teach kids in school (those stock picking contests, as an example). Growth isn’t expected to happen over a long period of time – it needs to happen today, right now. It helps explain why this kid did what he did. He saw an opportunity to grow his savings quickly, so he took it. The thing that this kid forgot (and that most of us forget) is that he didn’t need to do it.
There’s a big investing lesson that we can learn from this. When you think about it, the basic premise that underlies the whole financial independence movement is being satisfied with what we have. There’s always more money to be made out there and more stuff we can buy. Those of us on the financial independence path learned long ago to care about the important things, ignore the unimportant things, and know when we have enough. I think that’s an investing tip that we can all appreciate – be happy with enough.
Investing Is About Changing Your Life
For sure, I definitely understand the appeal of the big return. It sounds cool when you can say that some money you invested doubled or tripled in a short amount of time. But if you ignore the percentages and just look at the numbers, you can see the reality of it. For most people, a big return on some speculative investment doesn’t really do anything for their finances – most people just don’t have enough invested for it to move the needle.
Take this Marketwatch guy as an example. Thankfully, the life savings that he lost wasn’t much – only $10,000. If you’re going to lose it all, it’s probably best to do it like this, early on in your investing career when you don’t have much to lose.
Of course, $10,000 isn’t a small sum of money in absolute terms, but it’s a tiny blip when you think about what you need to save over the course of your life. Even if he doubled or tripled his investment, he’d be sitting on an extra $10,000 or $20,000. It’s nice to have, but it’s peanuts in the grand scheme of things. People like this get so caught up in percentages that they forget what those numbers really mean in reality. We’re trying to get life-changing amounts saved – not peanuts! It’s going to take way more than a few thousand bucks to do it!
That’s why I’ve never bothered with trying to beat the market or get some crazy, outsized return. Bitcoin, for example, is something I’ve never even considered. Besides the fact that I don’t understand it, the main reason that I don’t “invest” in it is that I don’t need to. The path I’m following is already good enough to help me reach my goals and change my life. Even if I could throw down some money on Bitcoin, it would only amount to peanuts. I need life-changing amounts saved. Bitcoin isn’t how it’s going to be done for me.
The Things That Actually Matter When You Invest
So what actually does matter? It’s not the huge returns that most people focus on when they start investing. Instead, it comes down to three things: (1) brute force saving as much as you can; (2) giving it time; and (3) developing the mindset of being happy with enough.
(1) Brute Force Savings. You need a huge sum of money for your returns to actually make a difference. Most people get so caught up on returns that they forget that a big return on nothing is still nothing. What matters is getting your invested amount to a high enough level that, when it grows in a year, it actually does something for you. You need way more than a few thousand bucks before your rate of return actually matters. And the only way you’ll get more than a few thousand bucks saved is by actually physically saving money.
(2) Time. The second thing that matters is time. You don’t need immediate growth right away to succeed in investing – you won’t have enough saved for it to even matter. Instead, you need to give yourself time to not only let your money grow but also time to get more money invested. It won’t happen overnight – I can guarantee that.
(3) Developing The Mindset of Being Happy With Enough. Finally, it comes down to the psychological skill of being happy with what you have. Beating the market or getting some big return on some weird investment is cool, but unnecessary for most. Market returns are enough for most people to hit their goals. Keep your investing costs low and fight the urge to jump around when you see something big happening. You can take a page right out of the financial independence playbook here – be happy with enough, care about the stuff that matters, and ignore the rest.
The Most Important Investing Tip – Being Happy With Enough
Ultimately, the reason a lot of people fail in investing is a psychological thing. The kid who lost his $10,000 suffered from the same problem – he wanted more and he wanted it now. It’s ingrained in all of us. We see the person across the street getting more, or we read about the big gains people get online, and we get sucked into it too.
But, in the end, it’s pointless and unnecessary to worry about that stuff. Just stick it out with your game plan and be happy with what you see and what you have. You don’t need double-digit returns every year to be a successful investor. And you definitely don’t need to double, triple, or 10x your investment in a year. Instead, you just need enough. If you learn to accept that, you’ll probably do okay. Maybe even better than most.
More Recommended Ebike/Scooters
Check out these other ebikes/scooters I've had the chance to do a review for:
- GEN3 Outcross Bike – The GEN3 Outcross is a solid, affordable fat tire ebike that does a good job of doing what I need it to do. It works great for city riding, giving me a smooth ride in all conditions. It’s works really well as a winter ebike since the fat tires give it good traction over snow and ice. Check out my GEN3 Outcross Review.
- Himiway Escape Bike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
- Espin Sport Bike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
- Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
- Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.
More Recommended Investing App Bonuses
For additional investing app bonuses, be sure to check out the ones below:
- M1 Finance ($10) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $10 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
- SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with $100 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
- Moomoo (5 free stocks) – Moomoo is a free investing app currently offering 5 free stocks (usually worth around $75-$100) if you open an account using a referral link and deposit $2,000. Read my Moomoo referral bonus guide for more information.
- Webull (5 free stocks) – Webull also gives you 5 free stock valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free stocks using Webull.
- Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
- Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.
More Recommended Bank Account Bonuses
If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.
- Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
- Digital Federal Credit Union ($100) – Digital Federal Credit Union (DCU) is a free, nationwide credit union that I recommend to readers for two reasons. First, DCU has a $100 referral bonus if you open a free DCU checking account with a referral link. Second, DCU has a saving account that gives you 6.17% interest on your first $1,000. Check out my in-depth post on how to set this account up.
- Upgrade ($100) – Upgrade is a free checking account that’s currently offering a $100 referral bonus if you open an account and complete three debit card transactions. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Importantly, this bonus says that it’s now scheduled to end on January 31, 2023. As long as you get your account opened before January 31st, you should be eligible. Here’s a post I wrote with more details: Upgrade $100 Referral Bonus – Step By Step Directions.
- SoFi Money ($275) – SoFi Money is a free checking account from SoFi. They’re currently offering a $25 referral bonus if you open a SoFi account with a referral link and deposit $10. You can also make an additional $250 as well if you complete a direct deposit. This is a good bank that is also 100% free, so you won’t have to worry about managing this account. Here’s a post I wrote with instructions on how to earn your SoFi Money bonus: SoFi Money Referral Bonus: Step By Step Guide.
- Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link.Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
- Fairwinds Credit Union ($100) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
- OnJuno ($60) – OnJuno is a fintech/neobank that is currently offering a $10 referral bonus if you open an account using a referral link and make a deposit of $50 or more. You will also get 1000 JCOIN. The 1000 of JCOIN is cryptocurrency. At the time I'm writing this, it'll be worth about $50. Check out my OnJuno referral bonus guide here.
- Varo ($30) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $30 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.
- Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
- Albert ($150) – If you can manage to do a real direct deposit, Albert is an easy account you can use to earn a referral bonus. Here’s a review about Albert I wrote. And here’s a step-by-step guide on how to earn your Albert referral bonus.
- Netspend ($20 + 5% Interest Savings Account) – Netspend is a company that provides 5% interest savings accounts. If you sign up using my referral link, you’ll get a $20 signup bonus once you make your first deposit into your Netspend account of $40 or more. That means you get a 5% interest savings account and a free $20 to start! Make sure to check out my in-depth guide on how to set up these accounts.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $250 if you complete a direct deposit.
- DCU. Digital Federal Credit Union (DCU) is a free, nationwide credit union that I recommend to readers for two reasons. First, DCU has a $100 referral bonus if you open a free DCU checking account with a referral link. Second, DCU has a savings account that gives you 6.17% interest on your first $1,000.
- Novo Bank. Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. It’s the business checking account I currently use for this blog.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $10 for opening an account.
- Personal Capital. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.
Feel free to send Kevin a message here.
this went through my mind when i was using extra money to pay off our house about 5 years ago. i hear all sorts of arguments (sound, valid arguments made by smart people) that say they would rather keep the mortgage thinking of getting better returns investing. well, our mortgage at the time was down to about 200 a month in interest and at a fairly high rate, around 6.5% i think. you know what i thought was “enough?” the 200/month i would never be paying out to the bank again. i thought it was sufficient to buy the equivalent of a guaranteed 6.5% bond. still seems like a good deal for us.
maybe you’ve heard of the famous kurt vonnegut and joseph heller conversation when surrounded by greedy wall streeters at a party. it’s about having enough.
Right – you only need enough to reach your goals. No need to keep pushing for more when you don’t need it!
You hit the nail on the head, Kevin. Our society is so consumed with instant gratification, we often don’t look far enough ahead to plan a long-term strategy. It’s all about what we can get now. If we can learn contentment, we’ll be much better off in all areas of life.
Agreed with that! Greed is bad I’d say!
Very sage post, my friend. It reminded me of Aesop’s dog and the bone his dog was holding. Master the ability to be satisfied with enough and you’re almost guaranteed to get rich. It’s so obvious and yet so hard. Damn, humans are a very strange species.
Can’t help ourselves – we all want to get rich quickly. It’s fine to want to get rich of course, but you see so many new investors talking about putting their 5k or 10k in some random thing, and for what? It’s not enough money to make a difference. Just get it invested in something that makes sense and keep doing it forever!
Even Warren Buffet followed the advice of investing in what you know. He was highly chastised during the dotcom bubble for not jumping on board. He always replied that he knew nothing about tech and continued investing in things that he could understand.
Like sure, he could have jumped on the dot-com bubble – but what for? To get another billion dollars for himself? He’s got enough already, why risk more of it when his plan is getting him to where he wants to be anyway.
This is a great reminder. Every once in a while I will see someone talking about the crazy returns they’re getting from Bitcoin or some other speculative investment and I will be tempted. Wouldn’t it be great to speed up the process a bit? Ultimately I need to remind myself that it doesn’t really matter that much. I need to save as much as I can and take my time.
Right, but then you find out that they only invested 1,000 or something, and it’s like, okay, great, you have $2,000 now. What does that really do for you, right?
Great perspective and much truth to this- much more than most people realize. Any market timing or other hacks have never paid off more to my advantage than if I had just put things on automatic and stuck to a plan. Add up all the time, effort, worry, and lost opportunity cost and its just not worth it, especially when the possible gain isnt enough to move the needle for the risk involved. Even though I’ve been studying finance for a long time, the best results I have had are from just setting contributions on automatic and working for over 20 years. My accounts are now pretty large and the funny part to me is that I havent really put that much effort into it other than the going to work part. Having the right mindset and knowing when you have enough like you say is a big part of investing success also.