I took a little online money personality quiz recently, and it suggested that I was both a “hoarder” and an “accumulator.” I certainly do have a tendency to hoard things, but accumulator sounds so much nicer. For the most part, I agree with the quiz. How do those traits affect my choices regarding money?
They mean that I tend toward the “safer” investments, which aren’t necessarily safe due to inflation. They mean that I’m very risk-adverse. I like to see my money, and know that it’s there. Safe. Ideally I like to see it grow. It really bothers me to log in and look at how my IRA & 401(k) are doing, and see them drop when the market is down. Of course I’m happy when they go up, but each time they go down I question my decision to commit to regular contributions. This questioning isn’t good.
I know that saving for retirement in a vehicle that’s likely to increase in value over the long term is the right thing to do. In order to this without my stomach knotting up, I need to stick to some rules. Originally I tried the “invest and ignore it” method, but that was too extreme. I ended up choosing a vehicle that had consistent losses even when the market was doing well, but I didn’t realize it at all until I needed to change my investment for other reasons. That was fine for my stomach (until the end) but bad for my money. I needed to find a middle ground.
My goal now is to only check twice a month — once when I make a contribution, and then again at the end of the month when I calculate my net worth. This way I can check to see that my investments are generally following the market (or hopefully doing better) while limiting the number of times that I stress about it. The hard part comes when I see headlines about the market’s “worst performance since ____.”
All of this is a long way of saying that I need to compensate for the downsides of my personality traits, and capitalize on the upsides.
Today, my funds are doing well. I have extreme peace of mind choosing my ‘safe’ investments. It works for me. When I think about investing, I’m clam. I know my investments are doing well. I’m not anxious or greedy. I’m just happy. My life today is lining up with my long-term goals. What more can a person want?