August 31


If you had a time machine, what would you do?

Let’s play a little game.

Let’s all get into a time machine and go back twenty-five years to 1995.



Ok, we made it. So here we are in 1995. You are retiring today and you have $100,000 to invest.

With that $100,000 you place 30% in bonds and 70% in stocks (the Barclay’s Aggregate Bond Index, and the S & P 500 index).


This is a somewhat generic portfolio mix.

You then decide to start taking out $5000 a year from your $100,000 investment.

Remember, it is 1995 and you have just retired. You decide to go live on a secluded island in the Caribbean. The island you choose has no internet, TV, radio, or newspapers. In fact, you have absolutely no idea what is happening in the outside world.

For 25 years you stay there; enjoying your tropical “off-the-grid” lifestyle. The only connection you have to the outside world is that each year $5,000 shows up in your Bahamian bank account from your initial $100,000 investment.

Ok, fast forward to July of 2020. You have returned to the United States for the first time in 25 years, tan, sporting gray dreadlocks…

I am using this specific time period on purpose. In hindsight, those were a rough 25 years in the economy. Remember, in this time-traveling example, you have no idea what is happening to the world economy. You don’t know that the market crashed in 2001 due to an internet bubble. You don’t know that 2008 experienced one of the worst economic disasters in history.

You have never once looked at a financial statement. All you know is that over the past 25 years you have received $5,000 each year for a total of $125,000 from your investments.

You go online to check your investment account. You are more than a little nervous. Is there any money left? Your hand trembles as it clicks on the ‘login’ button. What is the account balance remaining?? Are we broke?! Should we have been keeping an eye on our portfolio- obsessively checking the stock ticket every hour over the past 25 years?

The remaining balance: $415,000

Started with $100,000. Took out $125,000. Now you have $415,000.

You may be thinking, “Dave, are you actually telling me I don’t have to be hyper-vigilant with my accounts? Are you saying that ‘staying on top’ of my investments is unnecessary? Are you saying that I should put a good plan in place and then trust the process?  Are you saying I don’t need to worry at all?”

Yes, that is exactly what I’m saying. Plan. Invest. Live.




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