Friday, March 13, 2015

When Levity Meets Gravity


Thinking that you can stretch your hands out and reach for the stars is nothing short of being idealistic.

While you may think that idealism is what sent men to the moon, it isn't entirely true. 

There's more to it.


Levity

If you think you can beat the markets consistently over a decade, your last name is probably Buffett or Munger, or most probably, Delusional.

In fact, Buffett and Munger were not hopeful idealists. They were very much an aberration in our society, one that stayed buoyant throughout their lives.

That's what made them exceptional.

But you see, levity is thinking that there will always be another paycheck tomorrow, that trees grow to the sky, that your future will plan itself out, or that you found a way to cheat the system and will never get caught.

We all know how it ends. 

Enron, Ponzi, Subprime Mortgage Crisis, Lehman Brothers.

They levitated in a world governed by gravity - and they came crashing down.



Meet Gravity

On the flip side, there's gravity - an inevitable force that pulls you down. If left unchecked, it can consume you, suck you into this deep and dark abyss and keep you there. 

Your past failures - times when you were embarrassed, when you almost made the cut but failed miserably, when you made loads of money but lost it all, when you stumbled on stage and all you heard was laughter...

That's gravity. 

It convinces you that you can't get up again. It keeps you there!

And if you were to define yourself by these events, you'll go nowhere, you'll achieve nothing because you're afraid to fail again.

Gravity is what drives men to suicide - it's a dangerous place to be.



But When Properly Combined...

Levity is that unseen force that lifts you skyward, whereas gravity is the opposing force that pulls you earthward. Unchecked levity leaves you flighty, ungrounded and unreal. Unchecked gravity leaves you collapsed in a heap of misery. 
Yet when properly combined, these two opposing forces leave you buoyant. - To Sell Is Human, Daniel H. Pink

And staying buoyant is what we all need.

That's why an index fund is probably the best investment option for most (although I'm employing a dividend growth model - they're not that different actually).

Staying buoyant is about setting often 'unrealistic' targets but being grounded enough to know that there are, and there will be challenges.

It's about getting up, despite getting beaten to the ground.

Time and time again.

That's how Buffett and Munger became investment geniuses. They've made mistakes along the way, but did not allow those mistakes to keep them at the bottom.

Thomas believed that he had the next big thing (levity). But he kept failing, over and over again, a thousand times (gravity). But he kept trying (staying buoyant). His last name was Edison.

At the young age of 22, there was a man who came from a challenging background. With only $40 in his pocket, he ran away from home, aspiring to make it as an actor in Hollywood.

It didn't work out.

So he pulled himself together and realized that there wasn't an animation studio in his town. So he sat down and sketched characters in his notebook, animated them and named one of them Mickey.

His last name was Disney.

*****

On our road to financial freedom, staying buoyant and treading water is what's going to help us get there.

Don't fly.

Don't sink.

Float.




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4 comments:

  1. So when balanced properly would you be is a state of floativity?

    Great post Josh!

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    Replies
    1. Simplistically, yes! That's what's gonna keep us in this marathon.

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  2. Excellent post, Josh!

    We all need levity because chasing your dreams is a necessity, but going after them without being pulled down to earth often leads to delusional goal chasing. Totally agree that a combination is essential.

    For my own investments I try to be as pessimistic as possible (gravity), but dream big and give it my all (levity). So far it's worked out beautifully. And unlike many other investors, I couldn't care less about beating the market. I just want a decent return.

    Best wishes,
    NMW

    ReplyDelete
    Replies
    1. NMW, I can definitely see that your freedom fund is working out beautifully! Well, that decent return is what's gonna snowball into this massive avalanche in the long term.

      That's what we are after!

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