“It is the steady, quiet, plodding ones who win in the lifelong race.” 

 ~ Robert W. Service

Like the saying goes, “Hindsight is 20/20”. Looking back, I wish to have been smarter on this one as it cost quite a bit of money. Traditional advice goes something like this. “The time to take more risks is when you’re young. IF you suffer a big loss, there’s still time to recover.” Unfortunately, I bit on this one. High flying penny stocks; hot tips from my buddies and brokers left me with large losses and the occasional complete loss. To further complicate this, I had just enough wins to keep me coming back to the table. 

What I didn’t understand was the time value of investment. Calculate the value of a one-time $5,000 loss over a 45 year period at 8% (it’s just under $181,000). Five to fifteen years of this investment strategy turns into lots of money missed out on. I’d have been far better served to get a low cost index fund from Vanguard or Schwab while tolling away on something I was knowledgeable about and skilled at doing. 

It’s very difficult to save your way to wealth, but given a long time horizon, you can invest your way to wealth. Learn the time value of money, invest for the long haul, protect against catastrophic loss by purchasing quality equities, and simply let time work for you. It’s not rocket science, but remember – you’re not building a rocket.

“It’s not what you look at that matters, it’s what you see.”  

~ Henry David Thoreau