The decision I made in early 2010 to become an investor is one of the best life choices I’ve ever made.
That decision slowly moved me away from the worker class and toward the investor class.
And it obviously allowed me to march toward FIRE, which I achieved at the age of 33 – just six years after starting out totally broke.
I’ve written a ton of content over the years about investing as a whole, as well as dividend growth investing specifically.
But I want to talk about investing from a very different angle today.
I want to share three ways in which the process of becoming a better investor has helped me become a better person.
Investing has radically transformed my life for the better in terms of the wealth, passive income, and freedom it’s allowed me. That’s all really amazing, which is why so much of my content has been devoted toward sharing all of that.
However, investing has also taught me a lot about life and being a better human being. And that’s added so much value to my life that goes beyond the strict financial benefits.
Now, the changes I’m going to describe below didn’t happen overnight. That’s for sure.
It took years for all of this to play out. I had to work on myself as a person, day in and day out.
Slowly but surely, though, I did start to notice these changes in my life. And they’ve led me to where I’m now at.
While I’m not anywhere close to a perfect person (and never will be), I would say that I’m a better person as a result of seeing what it took to become a better investor, and then executing on all of that. Investing has improved my life beyond the financial benefits.
Let’s dig in…
I’m More Rational
I used to be a stubborn, inconsiderate, and impulsive fool in my younger years.
My frame of reference was set around the immediate. All considerations were made with the short term in mind, which is basically the “instant gratification” mindset that plagues most people in society.
Furthermore, I didn’t do a lot of critical thinking. I would rush into decisions without considering all of the pros and cons. I’d look mostly at pros, dish aside the cons, and move after a second or two of deliberation. Poor decision making caused hardship in my life. Long-term risk for me and/or others wasn’t properly accounted for.
I also had a bit of a temper. Little things would cause me to fly off the handle. I was volatile and ill-mannered. Just like my dad.
Becoming a better investor, which admittedly has been aided by age and maturity, has changed all of this for me.
Once I started reading about what it took to become a successful investor (which is something I badly wanted for myself), I realized that it required the type of personality and mindset that was completely opposite of what I possessed.
And so it became imperative that I changed who I was to better suit the task at hand.
A great investor is prudent, pragmatic, and patient. Most of all, a great investor is rational.
It’s become obvious to me that a great investor is anything but the irrational, impetuous person I once was.
In my quest to become a better investor, I’ve become extremely focused on logic, critical thinking, and the long term.
The emotional, temperamental, and volatile guy I used to be is completely gone, which has made me a better person across all aspects of my life.
That kind of personality isn’t only not suited well for investing, it’s not suited very well for the rigours of life. Approaching problems with a clear head full of logic is simply the better method, regardless of the subject.
Critical thinking has no doubt become paramount to my success as an investor, but a deep, honest, reflective, and facts-based thought process has helped every area of my decision making as I’ve come to develop plans and make life choices over the last eight years of my life.
People too often make decisions based on emotions. I was guilty of this in my youth.
This isn’t a very good construct to operate within. It’s impossible to set objective parameters that can be counted on in times of strife when everything is based on emotion. Becoming emotional leads to responding irrationally to problems.
I now rely heavily on objectiveness and facts to guide me when I come upon forks in the road. This makes me not only more successful, but it’s also a process that’s easier to repeat. And it’s easier to go back and see where you went wrong, when (not if) you end up making mistakes of commission.
It’s much more difficult to go back to an emotional moment and try to correct future errors when those emotions can’t be repeated in real-time or checked in the future (because you haven’t fixed the root of the problem).
Since this emotional roller coaster is out of my life, I’m considerably happier and more even-keeled as a result.
I now make decisions with the long term in mind, after considering the full suite of pros and cons across the board. If I don’t feel like I have a good handle on the advantages and disadvantages when looking at a situation, I don’t act.
That’s not to say I won’t make bad choices. It’s only to say that I go into situations with a better understanding of my surroundings, which better situates me to react more rationally to issues if/when they come up.
Moreover, choices are chosen when the advantages greatly outweigh the disadvantages over the long run, after factoring in risks for me and others around me.
For instance, my choice to move to Chiang Mai, Thailand was made with the long term in mind. It wasn’t a rash decision that was based on emotions.
Instead, I logically concluded that it was the most pragmatic and advantageous place for me to live my life over the long run. Well, I can look back and say that the first year living abroad has been the best, most successful, and happiest year of my life.
And since I’d argue that the plane ticket to Thailand has outperformed any financial investment I’ve ever made and turned me into an instant millionaire, this is a good example of where I can quantitatively show how becoming a better, richer, happier, and more successful investor has helped me become a better, richer, happier, and more successful person.
I’m More Independent
I used to think and worry a lot about money.
I guess I thought money bought happiness. It was as if more money equaled more happiness.
Yet as I found myself climbing the ranks and making more money, I found myself less and less happy. That’s because the more money I made, and the more stuff I bought with that extra money, the less free I actually was. I was only adding links to the chains that bound me to my job.
See, I was focused on price tags, dollar signs, and society’s whims. Unfortunately, I cared what other people thought about me.
It also took me a while to realize that more money doesn’t buy more happiness. This falsehood continues to haunt and disappoint people. Once upon a time, it did just that to me.
But learning how to become a better investor completely shifted my thought process to move away from what something costs. I now look at the intrinsic value of something.
And this has helped me in every other area of my life.
It’s not about what something costs, nor is it about how much money I make. Actually, it’s not about the money at all.
It’s about the value.
This isn’t just about the dynamic between what something costs and what it’s intrinsically worth, either.
It’s also about personal values.
I’ve learned to no longer sacrifice personal values in the pursuit of money or accolades. I’ve learned how important it is to abide by an inner scorecard.
See, I used to buy things I didn’t need with money I didn’t have to impress people I care about. I stepped away from my personal values in favor of keeping up with the Joneses.
But I’ve learned that a successful investor doesn’t go with the crowd.
A great investor thinks and acts independently, ignores the noise, and focuses on value.
The best time to invest is often when a business is loved the least. Paying too high of a price for a stock – even a high-quality stock – can set you up for subpar income and total return over the long run. Trying to keep up with the crowd only gets you run over by the stampede.
Well, paying too a high of a price for your entire lifestyle is analogous to this, and you can end up with the very same effect.
It took me a while to learn that, for example, the type of car I drive doesn’t add any value to my life or dictate who I am as a person. I’ve now come around to that realization so much, I don’t own or want a car. Haven’t owned a car for the better part of seven years now. I even let my driver’s license expire.
A car might cost $20,000, or $50,000, or… whatever. But it’s worth $0 to me.
On the other hand, I’m renting a ~$425/month apartment here in Chiang Mai, Thailand that’s actually on the upper end of the local market in terms of pricing. I could rent a cheaper place, but the difference in pricing would be more than offset by an even greater drop in value.
Price means almost nothing; value means almost everything.
Trying to live up to some kind of ideal or image that isn’t authentic to who you really are means you end up losing a sense of yourself. You pay attention to so much noise, you end up deaf.
I see that most great investors are totally autonomous. They do their research, independent of what the crowd is up to, and then they make decisions based on logic and facts.
It doesn’t matter if someone (or even everyone) agrees or disagrees with you. It only matters that the facts are on your side.
Well, this desire to be autonomous has spilled over into the rest of my life. I can plainly see the benefits for the investor so much, I’ve come to see that living a totally independent life is vital to one’s success and happiness.
Indeed, this is the basis for my drive toward and achievement of FIRE. And the freedom FIRE has conferred has greatly improved my overall well-being, setting me up to chase after more opportunities and become even more successful and happy.
Have most people that I’ve run into agreed with or equally desired FIRE? Did they see the benefits?
Most people think it’s a very odd thing, regardless of the bubble most of us in the FIRE space hang out in. Society largely doesn’t get it. The majority of people I’ve personally talked to don’t even want it.
To most, I’m an oddball of a guy.
I don’t have a job, a house, or a car. I’m not married. I have no children. I own almost no physical possessions. And I’m living in Thailand.
This is a very strange position for most people to look at.
But I couldn’t care less. Their opinions don’t matter to me. I’m autonomous and happy. And I ignore the noise.
Totally detaching myself from society’s opinions has made me far more successful, happy, and authentic. It’s like this umbrella I carry around, shielding me from the opinions and judgement that would otherwise rain down upon me. I just don’t care at all. I don’t even see it anymore. I’m completely and blissfully oblivious to it.
This was mostly possible only once I realized how important it is to focus on value, be autonomous, and ignore the noise as an investor.
I’m More Empathetic
I was once really poor.
I’m talking about growing up in a crack house in Detroit, living on welfare, and not having regular access to food. No father. Mom taking said welfare money to buy drugs and disappear on benders for weeks at a time. Abject poverty. That kind of poor.
And it wasn’t until I became an investor that I started to even get a whiff of what wealth was like.
As such, I’ve had a chance to experience two radically different sides of the coin.
Becoming a better investor has helped me achieve the kind of wealth, passive income, and freedom that I couldn’t even imagine as a kid.
This has come with a benefit that I didn’t originally anticipate. Honestly, I wasn’t even particularly interested in it when I first started out toward FIRE.
Becoming a better investor has helped me become more empathetic.
First, I believe most of the world’s most successful people are more empathetic than you might imagine, as evidenced by the highly successful The Giving Pledge.
And so the drive toward more wealth and success often walks hand in hand with becoming more empathetic. Many very wealthy people end up giving away much (or all) of what they build up. Individual success often benefits society as a whole.
My own journey is pretty unique. I’m not personally aware of anyone else who has come from so low to end up where I’m now at.
I’ve met a lot of people who are doing great in life. Truth be told, I’ve met a lot of people who are way more successful than I am. However, I can’t recall personally meeting or talking to anyone who grew up as poor as I did and then went on to reach similar or higher heights.
Not that it’s a competition. And not that I wish that upon anyone. But this is a very distinctive ride I’ve had.
It’s been a long, tough ride. As a result, I’m much more grateful and appreciative of my good fortune than I otherwise might be if the ride were easier or shorter.
Also, as a result, I’m very empathetic.
However, my empathy might be just as unique as my journey.
That’s because I’m empathetic to both the poor and the rich.
I see an unfortunate dialogue in the US where a certain group of people demonize the wealthy and successful. They make it sound like it’s a zero-sum game where someone becomes successful only at the expense of someone else. It’s as if someone can be rich only if someone else is poor. And that’s just not the case at all.
I didn’t get to where I am by stepping on anyone else.
No, I worked incredibly hard, made sacrifices, and totally revolutionized my life from top to bottom (which is what this article is all about).
Look, I moved halfway across the US, begged for a job, rented a dated apartment, sold my car, ate ramen noodles, woke up early, stayed up late, and pushed myself to the max every day.
Nobody gave me anything. I sweat, bled, and cried for what I have. And I’m very proud of where I’m at. I don’t feel guilty about my wealth, nor do I ever feel the need to apologize for my success.
If anything, it’s the opposite. I use my own journey as a shining example with which to inspire others. I try to show what capitalism can offer if you properly harness it.
However, we also need to be careful about adopting the mindset that capitalism cures all ills and all poor people are only poor because of poor choices. That’s not quite how it works, either.
I’m empathetic to both the rich and the poor because I’ve been both in life. And I understand that it’s a good deal of both hard work and luck that leads to good or bad fortune in this life.
Because I’m filled with so much gratitude, and because I know what it’s like to struggle, I’ve already signed my own “The Giving Pledge” by dedicating to philanthropic causes half (or more) of my wealth upon (or before) my death.
Thus, the better investor I become, the more effective of a philanthropist I become.
And the harder I work, and the more successful and wealthy I become, the more appreciative and respectful of that process I will be.
I don’t feel the need to tear down the rich in order to build the poor up. I’ve been both rich and poor. Neither side is inherently good or bad. There are good and bad wealthy people, and there are good and bad poor people (my own parents were very much the latter).
As such, becoming a better, wealthier, and more successful investor will only make me more empathetic toward rich and poor people alike.
And I think that makes me a more informed and experienced person. It makes me a better person. And it makes me a better philanthropist.
Indeed, I wouldn’t even be able to become a philanthropist if it weren’t for becoming an investor, which means my decision to become an investor in the first place will end up benefiting society as a whole.
Moving from the worker class to the investor class has greatly benefited my life in numerous ways.
The additional wealth, passive income, and freedom that this has provided me is awesome, and much of my content over the years has been dedicated toward discussing that so as to inspire others out there to walk their own paths toward FIRE and a happier/freer life.
But I’d argue that becoming a better investor has helped me become a better person.
And I’m extremely thankful for that.
Investing hasn’t been just a financial boon for me. It’s been a life boon.
Moreover, I realize there’s still so much to learn as an investor. So many businesses I don’t yet own a slice of. So many more changes and economic cycles to experience. As such, it keeps me humble as a person, realizing that I have so much more to learn as I walk the path of life.
I can only hope that your path toward a better investor helps you become a better person, which will surely benefit your world and the world as a whole.
What do you think? Has becoming a better investor helped you become a better person? Why or why not?
Thanks for reading.
Image courtesy of: bplanet at FreeDigitalPhotos.net.
P.S. If you’d like to become a better investor, which will likely help you become a better person, check out some fantastic resources I’ve personally used in order to become a better investor and reach FIRE!