J Money is one of the liveliest personal finance writers I know, and an awfully hard worker. In between this and his other blogs, he's got LoveDrop.org going on, a new idea in paying it forward to individuals who've come upon hard times. Ahh … to have a third of his energy and a tenth of his mohawk.
But anyway, this is from his latest net worth post:
But wow, what a month! Going on back to back ups here – love it. Even though I really only worked hard at 1/2 of this $11k increase 😉 As always the rest was left up to the stock market Gods…
To be completely fair here, he does have $66,000 in between his savings and his emergency fund, which is huge. And to boot, he's even covered what I'm going to talk about.
In the short run — certainly a month is short-run — the stock market gods (volatility) can bring a portfolio up or down. That's the risk, which is hopefully justified by a greater reward.
But what if the reward bypasses a generation? This article from MSN MoneyCentral suggests that the market can be really good for some generations, and mediocre to bad for others. (Basically giving investors the pagan equivalent of forty years wandering in the wilderness.) Hitting one of those bad patches means either (a) there won't be enough money waiting for you in retirement, or (b) there will need to be a lot more investing needed to arrive at the happy number.
If you're not near retirement age (and neither J nor myself are, though I'm closer than he is!) then investing in yourself is a great end-run around the stock market gods that play roller-coaster with your portfolio. Get some side projects going. Learn some skills. Create something you own rather than buy stock in something that someone else owns.
This isn't without risk either, of course, because you either succeed or you fail. It's no one's fault but your own. But if you don't sink a lot of money into starting things up, and start early enough, a failure or two is fine, and they improve your odds of success later.
Whimsy is flimsy. Take some of the whimsy out of your investment portfolio!
