Published in · 6 min read · Mar 6, 2024
--
My investing life is pretty boring.
All of my money goes to low-cost, total stock market index funds. Most of this is automated and happens without me paying attention.
Investing in index funds is a really smart move over the long term, but it’s not sexy. It doesn’t have that “suddenly become a millionaire” potential that we all dream about.
Right now the speculative investments that everyone is dreaming about are cryptocurrencies. Even though they are experiencing wild swings at the time I’m writing this, their takeoff in 2020 made plenty of millionaires and multi-millionaires.
So what should you do?
You could bet the farm on Bitcoin, but that’s a risky proposition. You could avoid it altogether, but that’s tough if you’re constantly feeling the itch to invest.
My solution to this is called the 90/10 rule. It’s not one that I invented, but I read about it on medium.com. We’ll break down how to use this rule, but first, let’s review the distinction between speculating and investing.
You can think about “investing” as existing on a spectrum:
