Buy yourself a gift with long-term thinking

Why investing is (kinda) not scary...

Does writing feel like searching for a gas station with your low fuel light glowing? Maybe it's just me. I've been trying to write about VC funds for at least a week now, but no fuel yet. I'm taking a break to discuss something else.

First, I'll say something weird about angel investing: writing a check to a startup is risky, but it feels a lot less scary than buying a house or car. When you buy a house, you're not just paying a lot of money. You're also signing up to pay for property taxes, home owner's insurance, and fixing leaky toilets at 4:32 am. When you wire money to a startup (nobody writes checks anymore, do they?), you might not see the money again, but your financial obligation stops there.

Investing feels a bit like buying a sold-out Christmas present for yourself. Maybe it won't work out. But also, perhaps it will work out, and someday in the future, the founder will tell you Google just purchased their company for $23M. What a pleasant surprise that would be!

Stocks and index funds feel similar. Perhaps I'm weird, but when I need to feel warm and fuzzy, I sometimes open the Charles Schwab app and see what my latest dividend payment was. Oh, look! SCHD sent me a few hundred dollars! Don't you love how investments transmit your money into the future?

Perhaps investing is one of the easiest-to-understand teachers of long-term thinking (assuming that you hold on to your investment). You can do something today that will have precise, measurable results in ten years. Your broker will tell you exactly how much your investment went up or down.

There are plenty of other activities that have long-term payoffs. Education, friendships, publishing, and planting a tree all have long-term results. Are they easy to measure? Not especially.

What is your favorite kind of long-term activity?

John