Stamp collecting is pretty much the definition of boring. Yet stamps are useful things that enable exciting mail to happen. Most people just care that they can put a stamp on an envelope and a birthday card or letter will show up in someone else’s mailbox a few days later. So if we had some big national collective worry that not enough people were getting birthday cards, I don’t think we’d start by trying to get people excited about stamps in and of themselves — we’d just want to get people using them. And to stretch the metaphor, we may see people using high-priced couriers and worry that they’re not getting value for money. Maybe FedEx comes right to your door, but for just a bit of effort to walk down to the post office and source an envelope yourself, you could get your mailing done a lot cheaper.
Because you read the post title, you know this is turning into a stretched analogy to investing.
A few months ago a writer for the Globe contacted me for a short interview1 around the premise of how to make investing more exciting.
I think investments and the whole process of investing are — to most people — pretty boring. And that’s a good thing: investing should be boring. No one’s going to text their friends about putting their money in a diversified, balanced portfolio with reasonable fees and deciding on a level of professional advice that they think they need and is appropriate and delivers value. It’s like watching a kettle of water boil or paint dry or grass grow, except instead of a few minutes, hours, or days to see some action you’re talking decades for your investments to do their job for you. It’s beyond the scope of our every-day sense of scale. Fortunately, with index funds and automatic purchases the boredom doesn’t have to be noticeable, either: you can do some reading and come up with a basic plan over a weekend or two, and then your plan only takes a few minutes or hours per year to maintain — the boring investing stuff can become a background process — so you can get on with your life and do all the fun, exciting stuff you want to do.
And then that’s ultimately what the point of investing is: to help you meet your goals. Watching your child graduate from university, that’s exciting — and having the resources to help pay for your child’s post-secondary education helps make that happen. Clocking out at your job for the last time and knowing you’ll have the money to enjoy a comfortable, stress-free retirement, that’s exciting — and signing up for a company RRSP match and investing some savings yourself can help make that happen. Having an emergency fund to act as a cushion so you’re not constantly stressed out about your financial situation… ok, well that one isn’t terribly exciting, either, but it’s nice and a lot better than the alternative.
Putting money away and investing it — using your RESP, RRSP, and TFSA — will help get you to those exciting goals, but that part of it is dull dull dull2. And that last point about having an emergency fund for security so you know that if your furnace breaks down you can handle it speaks to the other side of the coin for not trying too hard to solve the problem of your investments being boring: they should help remove stress from the rest of your life, not add to it. There are some weeks where boring would be just fantastic.
So rather than trying to shift the way you view investments from boring and stressful to some form of exciting, I think they should be boring — complete with all the wonderful things that being boring brings.
As for getting motivated enough to take that first step towards investing, instead of gamifying investing or finding some way to make it feel exciting, instead I suggest asking yourself what are some things you’d like your investments to do for you? What are some of your dreams or goals that your investments may help you realize?
For me, I like to view my investments as a great pool of potential, all the future stuff I will want and need, just gestating and developing. Somewhere in there is the seed of the new car I’m planning to get in about 8-10 years when my current one (now 5 years old) is ready to be replaced — it’s maybe got vestigial gills and a tail, but it’s starting to take shape. There’s all the stuff I’m going to have in retirement, which are little more than blastocytes out there in this stretched metaphor, but the seeds have been sown, and I’ll just have to wait to see how they develop.
1. Given the time that’s passed, I suppose it’s safe to say that that interview is never going to see the light of day and I’m not scooping anyone by sharing some of what I said.
2. Well, for most people. Some of us, like stamp collectors and baseball fans, are totally engrossed in this activity which to outsiders is totally boring.