I wish I knew this sooner
Welcome to reThinkable – my weekly newsletter where I share actionable insights to build a wealthy healthy life.
Here’s what we’re covering:
🤦 I wish I knew this sooner
💭 What is Stoicism?
📈 How to use Stoicism to build wealth
Estimated read time: 4 minutes and 8 seconds
🤦 I wish I knew this sooner
I started investing in the stock market in 2013 without any idea what I was doing.
Within 6 months, I saw my stocks plummeting, so in a panic, I sold everything. I lost 40% of the money I had invested and decided to stop investing altogether.
It wasn’t until 2016 that I decided to pick up investing again.
But this time, I made it my goal to first study the strategies of successful investors.
After reading countless books and articles, I discovered a common school of thought that influential investors like Benjamin Graham, Warren Buffett, and Charlie Munger all followed to build their wealth:
Stoicism.
After I applied this strategy, investing became much easier.
Today, I’m sharing what Stoicism is and how you can use it to become a better investor and start building wealth.
💭 What is Stoicism?
Stoicism is a school of thought founded by a wealthy merchant named Zeno of Citium.
One day, while he was traveling the seas, he found himself shipwrecked in Athens. He was more than 500 miles away from his home without any money or possessions.
Surprisingly, Zeno wasn’t really bothered by this and simply continued on with his life in Athens. He chatted with other philosophers, and shared his thoughts and ideas in public, which eventually led to the foundation of Stoicism.
The core idea of Stoicism is to separate things into 2 categories:
What you can control:
Your Reactions: How you respond emotionally and mentally to events
Your Decisions: The choices you make based on your values and judgment
Your Actions: Your behavior and how you interact with the world around you
What you cannot control:
Other People’s Behavior: How others act and what they say
External Events: Situations beyond your influence
The Past and Future: What has already happened and what will happen
Stoicism has helped me a lot, especially in the past few months.
Last year, one of my close friends passed away unexpectedly. It was a complete shock because you don’t expect people your age (in their 20s) to pass away; it’s something you think only happens when you’re older.
There wasn’t anything I could do to change what happened, but I could remember the good times we had and how much they meant to me. It didn’t make the pain go away, but it helped me manage it a bit better. It taught me to really value the time we have and the friendships we make, because you never know when it might be over.
📈 How to use Stoicism to build wealth
Stoicism teaches you how to control your emotional reactivity, which is incredibly useful in various situations, especially in investing and personal finance.
Here are 3 Stoic principles that helped me become a better investor to build my wealth:
Control What You Can: No matter how hard you try, you cannot control the stock market. However, you can control how much you save, where you invest, and the risks you take.
Take A Step Back: We’re living in a pretty weird economic time, meaning the stock market can soar one day and plummet the next. This volatility often leads people to make hasty and poor decisions. Before you make any investment decision, take a step back and ask if you’re acting on analysis or emotion. If the latter, take a breath and revisit your decision when you’re in a better mental state.
Be Ok with “IDK”: Sometimes you might wonder, with all the uncertainty, why bother investing at all? The truth is, if you’re serious about financial freedom, you need to start investing. It’s the only way to build sustainable wealth over time.
But personally, I hate keeping track of the stock market. That’s why I’m a big fan of passive investing.
I use an automated investment strategy that automatically invests 80% of my money in an index fund (I’ll share 2 index funds below), and the remaining 20% is in more speculative investments.
So if you’re ready to start investing or want to set up a similar passive investing strategy, here’s how:
1. Open a Brokerage Account: You can use any broker, like Fidelity or Schwab. I’ve been using Moomoo for the past two years. It’s free, fast, and easy to use, but my favorite feature is they give you 5.1% APY on your cash. Plus, Moomoo is offering reThinkable subscribers an exclusive deal: get 5 free stocks when you open an account and deposit $100. Take advantage of it!
2. Buy an Index Fund: Statistically speaking, investing in an index fund that tracks something like the S&P 500 is the best way to grow your wealth over time without much effort. Some of my favorite index funds are FXAIX and VFIAX.
3. Set Up Automatic Recurring Purchases: I set up automatic monthly transfers from my checking account to my brokerage account that automatically buys more of my index fund every month.
4. Let It Run on Autopilot: Since everything is automated, I can sit back, let the dividends roll in, and watch my investments grow over time.
Remember, the best way to build wealth is by making it happen in the background of your life. It’s about setting it up once and then letting it work while you focus on enjoying your life.
PS: If you want a detailed guide to investing, watch my FREE course on how to invest in the stock market for beginners.