Why We Invest in the First Place | Brandon Averill, Justin Dyer | AWM Insights #94

Why risk your hard-earned money? What if you don’t invest because you’re too scared to take any risk? 

Every person has different priorities and investing money to meet those priorities is crucial to not just our happiness but the legacy we leave behind. Just making money for the sake of making money won’t lead to a satisfying investment experience. 

Successful investors put themselves in position to weather downturns so they can capture long-term returns. This allows you to be conservative where you need certainty and aggressive where you need growth. You can tilt the odds in your favor to achieve desired long-term results by adjusting your strategy, optimization, and continuous planning.

EPISODE HIGHLIGHTS:

(0:30) Why even take your hard-earned money and put it at risk by investing?(1:25) Investors that don’t understand the why behind their investing strategy will not have a good investing experience.(2:30) Invest to maximize the odds of achieving your unique priorities.(2:53) The reason you invest is to take the capital you have today, optimize it, and invest with the odds in your favor to meet the priorities most important to you.(3:33) No one will ever be laying on their deathbed remembering how they beat the S&P 500 every year. They will remember the impact their money made on the lives of those they care about.(4:40) Everyone has priorities and money should be grown to meet those priorities.(5:34) We need money to grow. If not, purchasing power is lost every year.(6:50) Warren Buffett’s is no doubt a great investor but the key to creating his billions was actually time. (7:39) Chasing past performance or active management with a good story doesn’t end well for investors. It usually means future poor performance.(8:30) Short-term sound bites make for great media but are rarely right. These market predictors are almost never held accountable if they’re wrong. (9:50) Psychology of Money by Morgan Housel tells a great story about how being lucky but lacking investment strategy can literally ruin lives.(11:28) Headlines make for great entertainment, but shouldn’t drive your strategy. Pushing the odds in your favor for success will keep winning over the long-term.(12:00) Be conservative where you need certainty so you can be aggressive where you need growth. This is how you give yourself the greatest chance of success.(12:30) No one can predict the future but you can put yourself in position to achieve success over the long term.(13:50) Private markets have gained a ton of press but they should always be integrated as just one part of your long term strategy. (14:55) A protective reserve provides the financial security to take compensated risk and target higher expected returns.(15:56) Wall Street firms are creating private market products to sell to investors as an asset gathering tool.(17:25) Private markets are not a panacea of great returns. There will be good years and bad years, the key is to stay the course for the long term.(18:20) Plan for the plan to not go according to the plan. Adjustments are necessary and part of any good process. (18:20) Financial structure, including a protective reserve in place, allows the power of the markets to grow your wealth over the long-term. The power of the markets has been one of the greatest wealth drivers in human history.