Since the pandemic-induced bull market deflated earlier this year, I’ve noticed a lot less conversations about stocks, investing, and crypto. It’s not much fun to login to your brokerage account only to see lines going down and to the right.
All those social media influencers who got rich talking about getting rich are no longer quite as interesting. This is a good thing in my book. I liked the talk around the water cooler about investing because I like talking about money and all the different ways it impacts our lives. But even my investing looks very different today than it did 2 years ago and benefits from not being monitored every 2 hours.
These days I hold almost no individual stocks and am exclusively eating Vanguard index funds for breakfast, lunch, and dinner on the first of every month. That’s a far cry from the dopamine-heavy days of 2020 where I was enjoying an all-you-can-eat buffet-style portfolio every day (and throwing up in the bathroom between courses).
Which brings me to monkeys and pedestals.
Astro Teller, head of Moonshots at Google, talks about monkeys and pedestals as an analogy for projects. If you want to teach a monkey how to recite Shakespeare while on a pedestal you need to focus on training the monkey first, not building the pedestal. In fact, there’s no reason to even build the pedestal if you can’t train the monkey.
Every project or hobby or business idea has a monkey. It’s the hardest part, the bottleneck, the reverse salient. It’s not worth doing anything else until you solve for it.
But we spend a lot of time building pedestals instead because it feels better. It feels like we are doing something and making fast progress. Low-hanging fruit and all that.
Focusing on day trading and picking stocks is like building pedestals. Watching the markets and listening to doomsday pundits going on and on about the next market crash feels important because there is action behind it.
But it’s not productive action. And it will likely cause you to lose money via taxes and ill-timed trades. It’s like spending hours researching the best golf clubs to buy to improve your game without ever setting foot on a range or practicing your technique.
After all, you don’t use the stock market to get rich. You use it to stay rich.
You get rich by focusing on your career, your relationships, finding the right partner, and improving your health. Build a fortress out of your money. Control your impulses. Train the monkey to recite Shakespeare.
If you can’t do the hard part by saving and managing lifestyle creep, there’s no sense in trying to make the perfectly timed trade or looking for the next AMZN or TSLA.
Once the hard part’s done and you have a reliable job, an emergency fund, and your credit cards paid off, you can slowly build a position in a diversified index fund and let compounding do the heavy lifting. The pedestal.
Should you encounter a setback like a market crash or a job loss, you won’t be demolished. You’ll be able to withstand any shock because the hard part is already out of the way.
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