There are many paths to successful investing. If you adhere to a sound strategy without "changing lanes" all the time, you're likely to succeed with one of them (see our article links below for more on that). But SA contributor and commenter Ted Fischer identified what I think is the most critical ingredient to accumulating wealth in a comment he posted to an article I wrote.
As discussed many previous times in this forum, the key is ignoring what you can't control and focusing on your own behavior, which of course, you do control. Ted Fischer's investing success is due precisely to his and his wife's personal discipline as investors. Read his whole comment, which provides the whole case history, but see for now the snippet below with my emphasis added:
We've worked with a long-range financial plan since we were married, over 20 years ago.
* It was initially primarily a savings plan, focused on tracking and projecting net worth.
* As our income grew, we bumped the monthly contribution target, and it was gratifying to see the numbers jump.
* In the aftermath of the tech bubble we took heavy losses from some poor mutual fund choices, but it was comforting to see how little that mattered to the long-term projections. We were still ahead of plan."
By sacrificing current consumption, Ted Fischer and his wife found that even down markets could not suppress the growth of their portfolio. What's more, they have thereby conditioned themselves to a lower standard of living that they'd otherwise have had. That in turn will make their comfort during their retirement easier to achieve (and as it turns out earlier to arrive than they had anticipated - see the end of his comment for details). Exemplary.
Please share your thoughts in our comments section, and below please find some post-holiday advisor-related links:
- Isaac Presley, CFA: To succeed at investing, find a strategy that works for you and stick with it!
- Cullen Roche: Don't let political narratives affect your portfolio decisions.
- Vanguard: The advantages of Roth IRAs to wealth transfers.
- Book review: Martin Fridson, CFA, reviews "The Index Revolution" by Charles D. Ellis.
- Yours truly on the potential value of a financial advisor.
- For more content geared to FAs, click here.