Isn’t it strange how little value we give to ordinary miracles?
You know those things that are amazing, that we can’t do without, but we take for granted. I’m thinking of gravity, the sun coming up or the weather.
Another two occur to me – being alive and compounding. Both take decades to appreciate in full.
For me, life was an unconscious breeze until 10 and confusing as hell until 20. In my 20s I knew it all and in my 30s I realised I didn’t.
It’s only in my 40s that I realise only I am responsible for how things turn out; this is one of the major reasons TCFP exists.
Imagine if I’d had that insight in my 20s. I wish I had; instead I was so bound up in my own thinking and sense of injustice to even contemplate the miracles that were to be had.
It was only when that overactive thinking fell away, the ordinary miracles made themselves known – TCFP, my family and my colleagues.
I see this exactly in investing.
Left alone, your sensibly diversified portfolio would have averaged c7% pa over the last thirty years. Easily enough to double your money. Twice.
But almost no-one achieved that because they couldn’t stop themselves overthinking, thinking that their thoughts were the truth and then doing something about them.
The professionals as well as the amateurs, we’re all guilty. On average, this return was reduced to something like 3% pa. We left more than half the money on the table. All because we thought we knew better than compounding.
Most of our clients have at least 30 years to go. Most of them will live a fulfilling, meaningful life and leave a decent legacy; if they don’t get in the way of compounding.
Hopefully their heirs heed the wisdom that’s finally dawned on us. Then they and their children should find themselves in mighty fine shape too.
As much as anything, our job is to help you avoid repeating past mistakes. Which more often than not means doing nothing.
We don’t need a miracle – a very ordinary one already exists. Let us, always and forever, leave it alone to work its magic.
future proofing your finances
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Town Close are expert financial planners. Our goal is the same as yours – to help you do the things that are important to you in the time you have remaining.