How to do nothing

Executing the “chill” portion of VTSAX and chill.

When people ask me how I retired early, I usually reply with “high savings rate and index funds”. If I’m trying to sound smart I’ll say “equities” or “investing in your mom” or something. But usually I stick with the index funds reply. And that’s really all there was to it. As some other smarter dude once wrote, it’s extremely simple, but maybe not easy.

One not easy part for many people is the inactivity which index fund investing requires. There’s this pull to optimize and make complicated something that’s fundamentally the opposite. As any FI pursuer knows, doing a bunch of extra tweaking is probably going to hurt your investment returns. You can go down a lot of rabbit holes which will try to sell you on a specific, more complex method, and the hard part about this is that some actually do get better returns than the market. But the questions you have to ask is:

1. Am I sure this method actually beats the market, or have I fallen down someone’s funnel?
2. If this does actually work, am I really willing to put in the long term consistent effort to pull if off?
   

I think given enough time, research, and experimentation I could probably find a method that works. But as to the second one? Nah. One of the great things about reading other people’s blogs is you can mentally try on their lives before pursuing a similar course of action. For instance, in reading Nord’s recollection of his active investing years, I realized I had no desire to follow that path.

Back to nothing

So that leads us back to one of the primary (or only? ) rules of index fund investing, which could be summed up by this guy who probably knew a few things:

“Don’t Do Something, Stand There!”

the late and great Jack Bogle

To expand on this, we all know that dancing in and out of the market is great way to fuck yourself in an unenjoyable manner. This has been written about ad nauseam elsewhere. You know the drill “…have to be correctly time the market twice” ,”90% of active investors are beat by the index” and “Don’t start none, won’t be none”.🙃 Many a blog would follow this up with charts, data, blah blah blah. I don’t really write hard math posts around here, and would rather leave that to people who like doing it. I’d rather stick to armchair psychology with lots of swearing and cat photos.

How do you do nothing? It is tempting to do something, especially since you’ve worked your ass off to build this giant ball of money that’s just out there in the ether doing……something?

Here are some ways to keep doing nothing:

Do something else

You remember when the market was crazy earlier last year? Yeah, I don’t either. I literally had to go check my spreadsheet to figure out when this was. I recall a bunch of FI podcasts talking about it. Looking back, my net worth was over $100k down about a year ago. At the time I think I was busy chasing around two small children and trying to fit in some mountain biking in between their insanity.

Having other interests and priorities also helps. For every financial book I read, I read a couple books about improving my physical and mental health. The cool thing about these topics is you can actually take action on them, and you’ll see improvement. Investing, on the other hand, can be like trying to make love to a bathtub full of jello. Maybe it’ll go well, maybe not. (ok, not the best analogy, but amusing, right?) A lot of other variables get a vote in the process, and your hard work can easily be cancelled out. But if you work out every day, don’t eat like a dickhead, and keep at it, you’ll probably feel a lot better. And have a rocking bod by beach season!

I find it helpful to take things to the extremes when trying to make decisions, let’s do that here:

Would it be better if I

A. Spent most of my time and energy trying to maximize my returns, and ended up having shit tons of money along with crappy health and anxiety.

-or-

B. Set and forget my money, and focus my attention instead on my health and relationships. Maybe I’ll only have a few million dollars at the end of my life, but it’ll probably be a more fulfilling one.

Yup, lotta room to do a mix of both. But the extreme example thing helps me set my priorities.

Let’s move onto another way to crush Doing Nothing.

DOOM FI!!

When you get to the root of the temptation to really mess around with your investments, a lot of it is fear driven. At least it is for me. Maybe you too. What I mean is I’m driven to try and get better returns not only so I can buy a giant yacht, but also to insure that I have enough resources in case the world goes off the rails. To insure my investments are safe from some amorphous doomsday scenario (I’m looking at you, gold!).

This isn’t bad, this is just human nature. We want to protect against loss, and we’re hardwired to contemplate worst case scenarios so we’re prepared for the big bad. This is why we are still here. But this fear can fuck us. And it’s hard to fight; just look at all of the movies and TV shows with apocalypse/broken world themes that play to this fear, and likely make it worse.

I don’t think we should ignore this fear. Instead, let’s come to terms with it.

Some years ago I went down a rabbit hole trying to figure out how to optimize my investments so they’d still be good even if the economy went to shit. But then I came to the same realization that many others have had. If the American economy gets so fucked that the entire stock market (and therefore VTSAX) completely fails, our current conception of money isn’t going to matter. So trying to diversify into minerals or whatever probably ain’t gonna cut it. I’m no macroeconomist, maybe there is a situation where the market goes to complete shit for decades and we’re still somehow a first world country. But I can’t comprehend that, so instead I decided it makes more sense to diversify beyond money so me and mine would be ok on the extremely unlikely chance the world goes to irreversible shit.

Then I realized I already had.

Where I live, we have a good chance of a natural disaster wiping out the grid and the supply chain for at least a week. So it just made sense to have food and water for the family stocked away for that amount of time plus a generous buffer. Having lived in multiple third world countries, and having responded to some natural disasters, I’m under no illusion that I’ll just hunker down with the fam and eat through months of rations. Having seen things go to shit, I’ve noticed that people are pretty resilient; even in the worst case they end up helping each other out and figuring out ways to make stuff work within a week or so. But having a few weeks of food and water that you don’t need to cook helps bridge that gap between disaster and new normal.

Now let’s get really crazy.

When I talk to people that aren’t/weren’t cops or military, I’ve noticed some have a tendency to worry about a dystopian future that resembles one of those purge movies or a zombie apocalypse. Meanwhile, you could sum up the philosophy of my friends who served with “ΜΟΛΩΝ ΛΑΒΕ“.

We don’t have the same worry. Look, I’m not some doomer that secretly hopes everything goes pear shaped. Most of us that have survived actual violent attacks are not. I really like chipotle and running water. I especially enjoy not having to constantly watch my back(though I do anyways). But when you’ve made it through violent situations, you realize something if you’re being honest with yourself. Even when you’re armed with quality training, equipment, and systems, you realize that luck had a big part of your survival.

Puts things in perspective.

You’ll be ok, or you won’t. Worrying about it won’t help. And chasing the latest fad to ensure your investments survive the latest fear that’s being mongered won’t help either.

What to do if you’re not lucky enough to have such a background? Well, watching Predator and buying a bunch of guns probably ain’t gonna cut it. Maybe seeking out some legit training from people that have been there will help. And what the hell, watch Predator. It is fucking awesome.

Here’s another way to Do Nothing, that fits with the above:

Read History

Back in January of 2021 I was working as the Operations Executive Officer in my large city’s police department. Sounds fancy, but mostly I did spreadsheets and sent emails, and about a million other things. One of those things was to provide counsel (listen to them bitch) to the bosses of my department. My direct boss was a pretty chill guy. On the 6th of that month we were watching the shit go down in the Capitol, and he was like “well that sucks“, and then he directed me to make sure our standard civil unrest process (which we had used quite a bit a few months prior) was ready to go. Having already done that, I gave him a thumbs up and went back to making another spreadsheet.

Then, as usual, my boss’s boss came in freaking the fuck out. Look, this dude is a really good guy, and an inspirational leader. One reason he’s so inspirational is that he’s a big ball of energy, and when you talk to him it’s hard not to feel motivated. I’m usually operating at a 2 or 3 out of 10, like I’m barely awake most days. This guy? He’s at a 9. All. The. Time….except when shit pops off, then he redlines and goes to like a 17. Then he’ll go back to a 9, and continue to excel at leading the fuck out of shit.

The 6th was no different. He came screaming into my office, asking if I’d seen the stuff going down in DC. Then he expressed his disbelief that any such unrest could ever occur in our nation’s Capital. I was like….have you not heard of the Bonus Army March???? Yes, shit is presently fucked. But read some history, and you can probably find time where shit was even more fucked. And somehow humanity survived. So, like…chill the fuck out man.

This book is a good place to start; I try to reread it every year:

By now, you’ve probably also seen some version of this:

Zoom out, look back, and on second thought the world just might not be coming to an end right now. And since it’s not coming to an end, that motivation to scramble around and mess with your investments starts to evaporate. Maybe go for a run instead. Bully for history.

That’s about it.

There you go. How do you effectively do nothing? Doing something else, embracing the Doom, and looking at history have worked for me. Maybe they’ll work for you too. Or maybe you’ll figure out how to beat the market and spend your energy doing that. Good for you, man.

Let me know if you use another method to actively do nothing. Or embrace the nothingness and refuse to engage and instead comment about your favorite Seinfeld episode, a show about nothing……..