The Entry Fee to Invest

Some of the best things in life come with a significant cost. 

At the top of my list is being a dad. Zeke’s face, as he comes barreling across the living room to tackle me will never get old. But being a dad cost me time with friends, time with Emily, and time by myself.  

A great family vacation comes at the cost of a hectic few days upon reentry into reality.  

And the 8th wonder of the world – compound interest – comes with the cost of immense volatility and sometimes long periods of time where no money is made.

This was the return of the S&P 500 since the 1950s. 

And these were all the downturns you would have experienced along the way.

The cost is not a reason for dismissal, but it must be part of the equation when designing your investment portfolio. Most retirees can’t afford for their entire portfolio to be in stocks because they won’t experience the benefits of compound interest if they need to withdraw the money during one of the many downturns you see above. At the same time, most retirees can’t afford to ignore stocks altogether because of the long-term positive benefits they are likely to receive from them.  

Happy Planning, 

 Alex 

This blog post is not advice. Please read disclaimers.