335: The (Almost) Guaranteed Way to 31x Your Investments
BiggerPockets Money Podcast
BiggerPockets
4.6 • 2.9K Ratings
🗓️ 12 September 2022
⏱️ 44 minutes
🧾️ Download transcript
Summary
What do timing the market and a circle have in common? There’s no point, literally and figuratively. Some people would like to have you think they’ve cracked the code and there’s some secret formula. There’s not. They may have been able to “time the market” once or twice, but they probably can’t repeat it multiple times. Being correct for the wrong reasons isn’t repeatable, and with the market being so arbitrary, timing it correctly for the right reasons is unlikely. Despite this, there’s still a way to have enormous success while realizing great returns in the stock market, and today’s guest, Jesse Cramer, explains that.
In Jesse’s article, The Near-Zero Benefit from Timing the Market, he tells the story of three investors. All three investors have different experiences “timing” the market, and while they all have different outcomes, it’s not the outcome you’d expect. While you can’t time the market, time in the market can be just as lucrative. If you let your money compound interest over time, you’d be surprised at how much more you can earn by simply leaving your money alone.
In This Episode We Cover
Time in the market vs. timing of the market and which one wins over decades
The unpredictability of the market and how to combat it
Advice for new investors on how to manage emotions while investing
The benefits of reinvesting your dividends and letting your investments compound
The importance of self-education and how to use it as insurance when investing
The history of the stock market and its overall growth
And So Much More!
Links from the Show
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Check Out Mindy’s 2022 Live Spending Tracker and Budget
Coronavirus: Is It Time to Give Up on Financial Independence?
The Near-Zero Benefit from Timing the Market
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Transcript
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| 0:00.0 | Welcome to the Bigger Pockets Money Podcast, show number 335, where we interview Jesse |
| 0:05.2 | Kramer from BestInterest.log and talk about the near zero benefits to trying to time the market. |
| 0:12.8 | And in my own mind, and when it comes to personal finance and investing, I think about this fraction, |
| 0:17.7 | let's get back to Matthew Nerdtown, okay? I think about this fraction where success is in the numerator |
| 0:22.9 | and stress is in the denominator. And I'm not necessarily trying to maximize success. I'm trying |
| 0:29.6 | to maximize that fraction. And there are two ways to maximize a fraction. You can either increase |
| 0:34.4 | the numerator or decrease the denominator. So I'm trying to increase success in so far as I'm |
| 0:40.8 | also keeping stress low or hopefully decreasing stress. So it really is two sides to that ratio. |
| 0:47.0 | Hello, hello, hello, my name is Mindy Jensen. And joining me today as cohost is Mr. Mindy Jensen. |
| 0:53.4 | My husband Carl, who you know from 1500days.com and the Mile High Buy Podcast. |
| 0:58.3 | Wait, Mr. Mindy Jensen. Yes. Well, you know what? This is my show. No, it's all good. I'm thrilled to |
| 1:04.6 | be your wife. You're a fantastic partner. I will take Mr. Mindy Jensen any day of the week, |
| 1:09.5 | month, year, decade, or my entire life. Thank you. Wow. Did you do something wrong that I need to know |
| 1:15.1 | about later? We'll talk after we stop. Okay, before we get to the show, let's hear a word from today's |
| 1:22.8 | show sponsors. Carl and I are here to make financial independence less scary, less just for somebody |
| 1:28.3 | else to introduce you to every money story because we truly believe financial freedom is attainable |
| 1:33.2 | for everyone, no matter when or where you're starting. Oh, I am not Scott, but I get to read the |
| 1:38.7 | next part, whether you want to retire early and travel the world, go on to make big time investments |
| 1:44.6 | in assets like real estate or start your own business or collect plastic dinosaurs will help |
| 1:49.5 | you reach your financial goals and get money out of the way so you can launch yourself towards |
| 1:54.0 | your dinosaur greens. Okay, this episode is about time in the market versus timing the market or |
| 2:02.9 | the near zero benefit from trying to time the market. And this whole entire episode was inspired |
... |
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