Plain Sailing

Having just sold my house in Norway back in 2017, I was faced with the task of choosing investment vehicles for my proceeds. This was in a time of fever pitch enthusiasm for Bitcoin, and I was everywhere advised to put at least some money into this. However, I chose to do the following instead:

1. Pay down all debt, including my wife's debt
2. Put aside enough cash for 2 years of consumption 
3. Put the rest in gold

Had I chosen Bitcoin instead of gold, I would have been just as well off in monetary terms as I am with my gold at the moment. It can therefore be argued that my choice has made no difference. However, this is not true. My choice has been the better one by far. The reason for this is that it matters a lot how we get from one point to another.

Our goal is to preserve and grow our wealth, and wealth is not strictly monetary. Wealth is just as much about how we feel about things. Wealthy individuals are relaxed and secure, and they attain this mental stability from the stability of their investments.

Had I chosen Bitcoin instead of gold, I would have had to endure a 60% drop relative to gold, followed by a 2000% jump, and a subsequent drop of 60%. The drop would have made me depressed. The jump would have made me euphoric, and the recent drop would have again thrown me into a depression. That's one hell of an emotional rollercoaster.

When we compare this to gold, we see that I have in fact been far more wealthy with my gold than what I would have been with Bitcoin. I have lost no sleep to depression, nor euphoria. I check the price of gold every now and again, but never with dread or excitement. Up days give me a kick. Down days are disappointing. But I'm never thrown off balance. No-one needs to be a Zen master to retain their cool when looking at gold charts.

Some may argue that I've missed out on a lot of trading opportunities. But that's missing the point. Traders are constantly looking at charts while actively controlling their emotions. It's stressful and uncomfortable. It's also time consuming. By my definition of wealth, traders are poor.

I spend virtually no time looking at charts, and I don't need to actively control my emotions. I spend my days doing stuff I like, and I hardly ever worry about anything. I attain my Zen from the stability and security inherent in my investment portfolio. By my definition of wealth, I'm rich.

The quickest way to riches is not through trading, but through sensible allocations. Done correctly, a sense of wealth takes hold of us early, long before we are rich in monetary terms. We attain our Zen, and our wealth increases, both emotionally and monetarily.

Wax plant