We live in a world where success appears to be measured by the job and money we accumulate.
I know that people view me as successful, having effectively run a small business for three years and being a director of that business. In reality, I had no shares in that company, and when it was sold, I was effectively just an employee.
I know friends who have sold their businesses, and it has given them the freedom to choose what work they do and how they allocate their time. I know others who have sold their business and accumulated wealth but are lost.
A few years ago, I interviewed up-and-coming singers. One of the questions was about what they saw success as. You would expect this to be money, fame, playing at big stadiums, etc. With everyone I spoke to, success was having the ability to make enough money to do a job they love.
Success is, therefore, complicated. This is a survey by Mastercard in 2014:
In the US, success is defined as wealth, power and recognition.
An article in The Conversation stated that to live well in the UK you need to earn at least £29,500 per annum. A couple with two children would need at least £50,000.
John D Rockefeller, once the wealthiest man on the Earth, was asked by a report, “How much money is enough?” He calmly replied, “Just a little more”.
In the developed world, a consumer world means that the car we have on our drive or our house is essential for some, but is that success?
The danger of chasing wealth as a measure of success is that it can lead us to irrational decisions. Money is not bad, but how we view it can lead to destructive habits.
An article in Reuters stated the average holding period for a stock is 5.5 months; in the 1950s, this was eight years.
We want to make money; we don’t want to wait for it. The chart below from Franklin Templeton reflects on the recent mania around AI. AI is already part of our lives and will become more integrated. However, this shows how bubbles are created. Some people make money, but many do not.
Over history, speculation has never ended well. There are debates around “Tulipomania” in Holland. People speculated on the price of rare tulip bulbs. The price rose and then crashed.
Regarding success in investing, speculation is the worst way to make money.
Many studies show that staying invested is better than trying to guess when markets will turn or what will be the next “big winner”. This table from 31 December 2006 to 31 December 2021 illustrates $10,000 invested in the S&P500.
This is helpful from Visual Capitalist as it shows how quickly money can compound over time just by leaving it:
So, to conclude, success is what we define as success, and it is deeply personal. But a distorted view of success can impact our lives; it can undermine how we invest and what we chase. Ultimately, in a world where success is centred around what we have, the chances of it being taken away are greater.
To quote from Oxford Learner's Dictionaries, the tortoise and hare analogy is probably the best lesson for life.
“The hare is very confident of winning, so it stops during the race and falls asleep. The tortoise continues to move very slowly but without stopping and finally it wins the race. The moral lesson of the story is that you can be more successful by doing things slowly and steadily than by acting quickly and carelessly.”
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