The Monthly Roundup - May 2020

Article: Of Dollars and Data

Thinking in terms of expectancy (ie: the probability of losing or making a certain amount given a certain investment) shows the incredible power of simply investing in the stock market over the long term.

Depending on which stock market around the globe you plan to invest in, it's likely to have somewhere in the region of a 51% to 54% positive expectancy. While that might not sound like much, it means that over time the odds are in your favour.

Betting in a casino, the odds are always stacked in favour of the casino since they have a built in positive expectancy ensuring that over time the house always wins. However with the stock market, the odds are actually stacked in favour of the long term investor.

Article: Barrons

The FI and FIRE (financial independence, retire early) movements continue to get main stream attention as evidenced by this article in Barrons and the following one from Forbes.

As discussed in this article, the financial independence movement tends to attract disciplined investors of a cautious mindset.

The Covid-19 pandemic continues to highlight why we we all need to stop living in debt, stop living pay check to pay check and to instead aim for FI. Financial independence isn't simply about retiring early, it's about ensuring we are financially secure without being reliant on a salary which may disappear at any moment.

Article: Forbes

This article from Forbes highlights the importance of teaching our kids about financial independence and personal finance in general.

Schools typically don't teach our kids about managing their personal finances, doing their taxes, staying out of debt and saving for their future. This responsibility needs to be picked up by us parents and for those of us in the FI community, we're especially well suited to do so.