I've had a fairly solid savings and investment rate since 2006, and have built up a portfolio of a little under a million. As my portfolio has grown, my results are more dependent upon the movement in stock markets, and less so upon the elements within my control. This means that when stocks are doing well, I get very excited. However, when things are flatter, I get a bit de-motivated, and over the last few months this is where I'm finding myself.
What do you do to keep motivated, when you are frustrated with your rate of progress?
How do you deal with savings fatigue?
With returns relatively low at the moment it can be disconcerting.
Saving is part of my lifestyle, I guess I view it as me against a financial "system" which is incredibly wasteful.
Saving buys me freedom from the anxiety I see all around me. In other words its not the end goal that motivates me, i feel like I reap the benefits every day.
I get frustrated with my savings progress when I lose sight of why i do it and focus on the numbers only.
Saving is part of my lifestyle, I guess I view it as me against a financial "system" which is incredibly wasteful.
Saving buys me freedom from the anxiety I see all around me. In other words its not the end goal that motivates me, i feel like I reap the benefits every day.
I get frustrated with my savings progress when I lose sight of why i do it and focus on the numbers only.
I stop studying it so intensely and go work on improving myself in a different area of life. Remember your finances are not an end unto themselves, but only a means to an end.
You can divide your life (or your problems) into three areas: (1) career/financial; (2) health/longevity; and (3) social/relationships/spiritual. Every personal problem you can think of fits in one of these three and you need all of them to work for you in a positive way to maximize your satisfaction in life.
When you are bored/frustrated or just stuck with one area, sometimes the best thing to do is just go focus on one or both of the other two for awhile.
So I would put yourself on a financial news diet and set or work on goals (and read about them) in the other areas in terms of what your diet, exercise, social and/or spiritual relationships. Or go learn a new skill in something -- that process is often as much spiritual/self enlightening as it is practical, particularly if it involves creating, building/fixing, cooking or growing things.
You can divide your life (or your problems) into three areas: (1) career/financial; (2) health/longevity; and (3) social/relationships/spiritual. Every personal problem you can think of fits in one of these three and you need all of them to work for you in a positive way to maximize your satisfaction in life.
When you are bored/frustrated or just stuck with one area, sometimes the best thing to do is just go focus on one or both of the other two for awhile.
So I would put yourself on a financial news diet and set or work on goals (and read about them) in the other areas in terms of what your diet, exercise, social and/or spiritual relationships. Or go learn a new skill in something -- that process is often as much spiritual/self enlightening as it is practical, particularly if it involves creating, building/fixing, cooking or growing things.
It's better to do nothing than to do the wrong thing. Sometimes it's better to tread water than to swim against the current.
I was very happy to ride out the market fall in 08, while most of my friends lost half of their portfolios. But now (like many others) I would like to have my money back to work and it doesn't have too many good job prospects.
In the meantime, Dragline gives some excellent advice (as usual)...
I was very happy to ride out the market fall in 08, while most of my friends lost half of their portfolios. But now (like many others) I would like to have my money back to work and it doesn't have too many good job prospects.
In the meantime, Dragline gives some excellent advice (as usual)...
I feel this too. I don't feel bad about savings, but I negative investment performance does make me feel like I'm treading water, and wasting time since my [unwanted] employment could not overcome the downturn... Investments usually go up, so for every yin there is a yang, I suppose.
During the worst PP drawdown I've experienced, I pretty much said screw it and allowed myself to get immersed in a video game for the next few weeks... When I was done with that phase, I was hitting all time highs again. Setbacks are usually temporary.
It was fun, but less productive than Dragline's excellent suggestions.
During the worst PP drawdown I've experienced, I pretty much said screw it and allowed myself to get immersed in a video game for the next few weeks... When I was done with that phase, I was hitting all time highs again. Setbacks are usually temporary.
It was fun, but less productive than Dragline's excellent suggestions.
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plantingourpennies
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Track a different metric. Pay no attention to the overall amount in the market, just track how much you put in month after month.
Mrs. PoP and I are going through the same thing-we can get whipsawed by the size of our assets, so we are paying more attention to how much we put in every month, and how much we spend.
Mrs. PoP and I are going through the same thing-we can get whipsawed by the size of our assets, so we are paying more attention to how much we put in every month, and how much we spend.
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George the original one
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Like PoP, I emphasize a different metric.
In my case, I track the consistent income the portfolio generates. Capital gains are encouraging and capital losses are, er, distracting, but as long as the dividends steadily grow, I'm more interested in seeing them continue to grow.
Granted, as a USA investor, it's easier to predict how the dividends are growing.
My mantra: every $10k invested is $50/mo income.
In my case, I track the consistent income the portfolio generates. Capital gains are encouraging and capital losses are, er, distracting, but as long as the dividends steadily grow, I'm more interested in seeing them continue to grow.
Granted, as a USA investor, it's easier to predict how the dividends are growing.
My mantra: every $10k invested is $50/mo income.
"In my case, I track the consistent income the portfolio generates. Capital gains are encouraging and capital losses are, er, distracting, but as long as the dividends steadily grow, I'm more interested in seeing them continue to grow."
+1
I generally don't care what the markets themselves are doing as long as I'm getting my dividends and the companies that pay those dividends continue to increase their payouts. In fact, I get happy when there's a market pullback because it means I can buy dividend income at a lower price.
+1
I generally don't care what the markets themselves are doing as long as I'm getting my dividends and the companies that pay those dividends continue to increase their payouts. In fact, I get happy when there's a market pullback because it means I can buy dividend income at a lower price.
@bigchrisb. Congrats on the $1M. If you want motivation do what a teller told me, "just put a zero after it."
I love and hate it when the market goes on a tear like this. The moves aren't as obvious to me as when people leave money laying on the table. Now that's excitement...a down inefficient market full of mispriced assets.
All the jitters I get today are from moves made in the past. I feel like I'm not doing anything.
This reminds me of an admin I worked with in 1998 who kept looking at her 401k balance each day. It was $100k and she was so excited. She kept showing me this.com and that.com that had gone up 10x in a week and said she could be a millionaire if she'd bought it.
When I look at my balances too much in the absence of a trade I'm just about to lose some money.
My neighbor called it the warm and fuzzy feeling he got when he looked at comp sales on our street pre bust.
I love and hate it when the market goes on a tear like this. The moves aren't as obvious to me as when people leave money laying on the table. Now that's excitement...a down inefficient market full of mispriced assets.
All the jitters I get today are from moves made in the past. I feel like I'm not doing anything.
This reminds me of an admin I worked with in 1998 who kept looking at her 401k balance each day. It was $100k and she was so excited. She kept showing me this.com and that.com that had gone up 10x in a week and said she could be a millionaire if she'd bought it.
When I look at my balances too much in the absence of a trade I'm just about to lose some money.
My neighbor called it the warm and fuzzy feeling he got when he looked at comp sales on our street pre bust.
Two thoughts.
1. The relative value of a portfolio is determined by living expenses. A million bucks is fantastic for someone living on 20k a year. Less so for someone living on 200k a year.
If in bad times you let expenses creep up, you are making the damage to the relative value of your portfolio even worse. This is the time to really focus on getting your low cost lifestyle nailed down. Drop living expenses by 10%, and the relative value of your portfolio goes up by 11%.
2. Long term, you just become someone who leads a low cost lifestyle. It's not something you think about or even consider a sacrifice.
At this point, I view every exchange of money as a negotiation. Most of the purchases that can really damage my savings, also involve someone else making a large profit at my expense. In those scenarios, I am being taken advantage of. My competitive streak rises, and it makes a transaction almost impossible.
Honestly, the behavior can be problematic at times, especially when it comes to something simple like a $3 drink or $9 movie ticket. It's just who I am though. I find someone making a large profit at my expense insulting, and it pisses me off too much to enjoy whatever they are selling.
1. The relative value of a portfolio is determined by living expenses. A million bucks is fantastic for someone living on 20k a year. Less so for someone living on 200k a year.
If in bad times you let expenses creep up, you are making the damage to the relative value of your portfolio even worse. This is the time to really focus on getting your low cost lifestyle nailed down. Drop living expenses by 10%, and the relative value of your portfolio goes up by 11%.
2. Long term, you just become someone who leads a low cost lifestyle. It's not something you think about or even consider a sacrifice.
At this point, I view every exchange of money as a negotiation. Most of the purchases that can really damage my savings, also involve someone else making a large profit at my expense. In those scenarios, I am being taken advantage of. My competitive streak rises, and it makes a transaction almost impossible.
Honestly, the behavior can be problematic at times, especially when it comes to something simple like a $3 drink or $9 movie ticket. It's just who I am though. I find someone making a large profit at my expense insulting, and it pisses me off too much to enjoy whatever they are selling.
Haha I totally agree with the sentiment about over-priced concessions at movies. For the price of a movie and and soda, you've already spent more than one month of a Netflix subscription. I do enjoy seeing a newly released movie on the big screen, though. However, I will do my best to "sneak" my own drinks and/or snacks into the theater. I've never once had a problem bringing in my own "concessions" in a small shoulder tote.
Good points from all - thanks for the suggestions. I think I'll try to de-tune a bit from the financial media, and try to limit myself to checking balances once a week.
I think I might be better off plowing myself back into my work, and also into a budding romantic interest, while leaving the finances on auto-pilot for a bit.
I think I might be better off plowing myself back into my work, and also into a budding romantic interest, while leaving the finances on auto-pilot for a bit.
Re: How do you deal with savings fatigue?
entering such topics always give me this interesting vibe, the same as old campgain against pedophilia from the past - "you never know who's on other side of the net! be careful during surfing"