Blackouts and Basics
The modern world makes it easy to forget what's really important. But slow WIFI interrupting your favorite Netflix show doesn't seem nearly as annoying after you've spent a few days shivering inside your house, wondering if it's safe to drink the tap water.
Many of us have come to take the three basic survival necessities of food, water and shelter for granted. Modern society provides us with access to these resources so reliably that we barely consider what we'd do if they suddenly became scarce. Many of us are simply not used to wondering where we can find safe drinking water or whether we'll be able to stay warm during the winter. As a quick reminder, here is Maslow's hierarchy of needs:
Looking at the five levels in the pyramid, I don't typically spend much of my time worrying about the two at the bottom. Last month's ice storms gave many Texans a reminder of what is truly important. I'm a big fan of yoga, margaritas and self actualization. I love watching basketball, reading epic novels and having dance parties with my girls. But when it comes down to it, we can only enjoy those things if we know that our basic survival needs will be met. When most people think of the stock market, they think of big payoffs. Buying low, selling high. Finding the next Amazon and getting in on the ground floor. These are worthy goals. But they don't matter nearly as much as locking down the investing basics. Here's a guide to the food, water and shelter of investing:
Do you earn more than you spend?
Do you save what's leftover?
Do you invest those savings with a diversification strategy that suits your long-term plan?
If you answered yes to all three questions, congratulations. You have achieved the investing survival basics. If you answered no to any of them, you need to think about how you can get to "yes" on each before worrying about cashing in on the next GameStonk or falling into the "buy low, sell high" trap. The basics aren't sexy. They're just really, really important.