Investment Principles: Lessons Learned from Wins, Losses, and Failures
I’ve been working and investing for about 20 years, and during that time, I’ve made dozens of mistakes. You can think of this article as “What I would tell my 20‑year‑old self if I could do it all over again.”
A Short Version of My Investment PrinciplesLet’s go:
Investment Goals: I believe the primary goal of any investment should be to increase your optionality and improve your life. “Early retirement” is an unrealistic and unhealthy goal for most people.
Income: Earning a higher income matters more than anything else, especially when you’re young. Getting into the top 5% of earners in your country will have FAR more impact than fancy strategies, day trading, or chasing some random meme coin that goes up 100x. If your country doesn’t have high‑paying jobs or makes starting a business hard — move!
Contributions: Yes, contribute regularly to your investment accounts from your salary or profits, but first, build a one‑year cash reserve (you can cut it down if it’s unrealistically high).
Allocations: If you’re young, you should primarily invest in stocks, but I believe gold and silver are often a good replacement for fixed income in traditional 80/20 or 60/40 portfolios. I also recommend putting a small percentage into more speculative bets like crypto or tech indices like the NASDAQ.
Active Trading: I don’t recommend day trading unless it’s your full‑time job. It’s hard enough to monitor a few companies, let alone dozens, if you also work full time.
Noise and Existential Threats: Ignore all such threats unless they’re actionable within the next 12 months. Will AI kill everyone and destroy all jobs? Maybe, but if that happens, your portfolio performance will be the least of your worries because robots will be firing rocket launchers at children.
Main and Side Quests: Always focus on your “main storyline quest,” i.e., your portfolio of liquid, publicly traded assets, and ignore or de‑prioritize “side quests” like trying to be a mini‑VC or investing in real estate.
Market Timing: Almost every expert will tell you it’s impossible to time the market, but I partially disagree. Timing the market for “big picture” reasons is a bad idea, but doing it selectively due to very specific catalysts can make sense.
Okay, now for the details.
Investment Principles: Goals and Why I Don’t Like the FIRE MovementMany people online seem obsessed with the FIRE movement (Financial Independence, Retire Early). They believe that if they can save $1M, $2M, or $5M, they can move to some exotic place X, live a beautiful life, and never work again.
I don’t think that’s a healthy strategy because I don’t believe your life goal should be “early retirement,” and I don’t think most people will ever save that much when young — and even if they do, hitting that single number won’t instantly change their life.
Your goal should be to do something useful and interesting with your life, and your investments should give you more options to achieve that.
For example, maybe you can afford to take a lower‑paying but more interesting job, switch industries, or go part‑time because your portfolio earns you X dollars.
If by 35 or 40 you’ve accumulated millions, it probably means you built a business, worked extremely hard, and sold it.
If that’s your personality, can you imagine yourself retired? You’d get bored in about a week.
Investment Principles: Why High Income Matters MostBetween 2009 and 2014, I didn’t have a traditional brokerage portfolio.
I traded crypto and invested via crowdfunding, but I was paranoid about a market crash happening at the same time my business might fail, so I held a large cash balance.
Obviously, this was a mistake because the S&P 500 roughly doubled during that period.
Achieving high income early in your career also matters because of compounding.
If you only reach the point where you can save and invest significant amounts by age 55, it won’t matter much — you’ll already be near retirement anyway.
Investment Principles: Regular Contributions and ReservesRegular contributions are very important because markets are unpredictable, and nobody ever knows for sure whether they’re buying cheap or expensive.
But if you spread your investing over many decades, you’ll likely be fine, even if markets stagnate or produce lower returns than historical averages.
At the very least, you’ll keep receiving and reinvesting dividends, which adds a small percentage each year.
Regular contributions are also crucial if you invest in highly volatile assets like Bitcoin.
Yes, if I had just autopiloted X dollars per month, the results would’ve been similar with much less stress.
I can’t give you an exact percentage for monthly contributions because it depends on your living expenses, taxes, and other factors, but I’d lean toward an aggressive approach if you’re under 30 and have a one‑year cash reserve (i.e., aim to contribute more than 50% of your after‑tax, after‑expense income).
If a one‑year cash reserve is unrealistically high or would take years to build at your income level, maybe cut it to 3–6 months.
Investment Principles: Why the Macro Environment Should Influence AllocationMany providers like Vanguard and BlackRock offer “target‑date funds,” which shift toward more bonds as you approach retirement.
Meanwhile, well‑known investors like Ray Dalio propose “permanent” or “all‑weather” portfolios.
I think all of these are bad ideas because allocation should be thought through and can and should change over time.
Yes, age matters, but the macro environment is also crucial.
A concrete example: in 2020, I made the unconventional decision to put the “safe” part of my portfolio into gold and silver instead of bonds.
Since then, they have completely outperformed corporate and government bonds.
This was an obvious and predictable outcome:
Giving precise allocation advice is hard because it depends on your income, age, risk tolerance, and the macro situation.
But let’s say you just finished university and are taking a $100K–150K job, so you can save a modest amount but not a fortune.
If your risk tolerance is “moderate to high,” I might recommend something like:
One could argue for adding real estate, REITs, or other commodities, but I wouldn’t complicate things initially.
Investment Principles: Main Quests vs. Side QuestsIn video games, there’s usually a “main storyline quest” (like killing the bad guy or defeating the evil empire) and a bunch of “side quests” with extra content.
Some side quests are fun, but many are boring/repetitive and just exist to pad out game length.
In investing, your portfolio of publicly traded assets should be your “main quest,” and everything else should be a mediocre side quest you can ignore.
This includes activities like angel investing, peer‑to‑peer lending, real estate plays, trying to become a mini‑VC, or creating your own meme coins.
While I never tried the last one, I’ve spent time and money on the others.
I recommend ignoring all of these unless it’s your full‑time job.
At most, allocate a small percentage to one of these as part of your “speculative bets.”
Investment Principles: Why Selective Market Timing Can WorkLet me illustrate this with a few examples.
“Market timing” works best when there’s a clear, hard catalyst with a known timeframe.
A clear example: COVID in Q1 2020.
A Short Version of My Investment PrinciplesLet’s go:
Investment Goals: I believe the primary goal of any investment should be to increase your optionality and improve your life. “Early retirement” is an unrealistic and unhealthy goal for most people.
Income: Earning a higher income matters more than anything else, especially when you’re young. Getting into the top 5% of earners in your country will have FAR more impact than fancy strategies, day trading, or chasing some random meme coin that goes up 100x. If your country doesn’t have high‑paying jobs or makes starting a business hard — move!
Contributions: Yes, contribute regularly to your investment accounts from your salary or profits, but first, build a one‑year cash reserve (you can cut it down if it’s unrealistically high).
Allocations: If you’re young, you should primarily invest in stocks, but I believe gold and silver are often a good replacement for fixed income in traditional 80/20 or 60/40 portfolios. I also recommend putting a small percentage into more speculative bets like crypto or tech indices like the NASDAQ.
Active Trading: I don’t recommend day trading unless it’s your full‑time job. It’s hard enough to monitor a few companies, let alone dozens, if you also work full time.
Noise and Existential Threats: Ignore all such threats unless they’re actionable within the next 12 months. Will AI kill everyone and destroy all jobs? Maybe, but if that happens, your portfolio performance will be the least of your worries because robots will be firing rocket launchers at children.
Main and Side Quests: Always focus on your “main storyline quest,” i.e., your portfolio of liquid, publicly traded assets, and ignore or de‑prioritize “side quests” like trying to be a mini‑VC or investing in real estate.
Market Timing: Almost every expert will tell you it’s impossible to time the market, but I partially disagree. Timing the market for “big picture” reasons is a bad idea, but doing it selectively due to very specific catalysts can make sense.
Okay, now for the details.
Investment Principles: Goals and Why I Don’t Like the FIRE MovementMany people online seem obsessed with the FIRE movement (Financial Independence, Retire Early). They believe that if they can save $1M, $2M, or $5M, they can move to some exotic place X, live a beautiful life, and never work again.
I don’t think that’s a healthy strategy because I don’t believe your life goal should be “early retirement,” and I don’t think most people will ever save that much when young — and even if they do, hitting that single number won’t instantly change their life.
Your goal should be to do something useful and interesting with your life, and your investments should give you more options to achieve that.
For example, maybe you can afford to take a lower‑paying but more interesting job, switch industries, or go part‑time because your portfolio earns you X dollars.
If by 35 or 40 you’ve accumulated millions, it probably means you built a business, worked extremely hard, and sold it.
If that’s your personality, can you imagine yourself retired? You’d get bored in about a week.
Investment Principles: Why High Income Matters MostBetween 2009 and 2014, I didn’t have a traditional brokerage portfolio.
I traded crypto and invested via crowdfunding, but I was paranoid about a market crash happening at the same time my business might fail, so I held a large cash balance.
Obviously, this was a mistake because the S&P 500 roughly doubled during that period.
Achieving high income early in your career also matters because of compounding.
If you only reach the point where you can save and invest significant amounts by age 55, it won’t matter much — you’ll already be near retirement anyway.
Investment Principles: Regular Contributions and ReservesRegular contributions are very important because markets are unpredictable, and nobody ever knows for sure whether they’re buying cheap or expensive.
But if you spread your investing over many decades, you’ll likely be fine, even if markets stagnate or produce lower returns than historical averages.
At the very least, you’ll keep receiving and reinvesting dividends, which adds a small percentage each year.
Regular contributions are also crucial if you invest in highly volatile assets like Bitcoin.
Yes, if I had just autopiloted X dollars per month, the results would’ve been similar with much less stress.
I can’t give you an exact percentage for monthly contributions because it depends on your living expenses, taxes, and other factors, but I’d lean toward an aggressive approach if you’re under 30 and have a one‑year cash reserve (i.e., aim to contribute more than 50% of your after‑tax, after‑expense income).
If a one‑year cash reserve is unrealistically high or would take years to build at your income level, maybe cut it to 3–6 months.
Investment Principles: Why the Macro Environment Should Influence AllocationMany providers like Vanguard and BlackRock offer “target‑date funds,” which shift toward more bonds as you approach retirement.
Meanwhile, well‑known investors like Ray Dalio propose “permanent” or “all‑weather” portfolios.
I think all of these are bad ideas because allocation should be thought through and can and should change over time.
Yes, age matters, but the macro environment is also crucial.
A concrete example: in 2020, I made the unconventional decision to put the “safe” part of my portfolio into gold and silver instead of bonds.
Since then, they have completely outperformed corporate and government bonds.
This was an obvious and predictable outcome:
- After COVID hit, central banks set interest rates to 0%, so bond yields dropped and prices could only fall.
- Budget deficits skyrocketed, leading to inflation, which hurt bonds.
- Money printing and rising debt levels spiked and never returned.
Giving precise allocation advice is hard because it depends on your income, age, risk tolerance, and the macro situation.
But let’s say you just finished university and are taking a $100K–150K job, so you can save a modest amount but not a fortune.
If your risk tolerance is “moderate to high,” I might recommend something like:
- Stocks: 80% (mostly US, with a small international share)
- “Safe part” (gold/silver or bonds): 10%
- Speculative bets (crypto, NASDAQ, individual stocks, etc.): 10%
One could argue for adding real estate, REITs, or other commodities, but I wouldn’t complicate things initially.
Investment Principles: Main Quests vs. Side QuestsIn video games, there’s usually a “main storyline quest” (like killing the bad guy or defeating the evil empire) and a bunch of “side quests” with extra content.
Some side quests are fun, but many are boring/repetitive and just exist to pad out game length.
In investing, your portfolio of publicly traded assets should be your “main quest,” and everything else should be a mediocre side quest you can ignore.
This includes activities like angel investing, peer‑to‑peer lending, real estate plays, trying to become a mini‑VC, or creating your own meme coins.
While I never tried the last one, I’ve spent time and money on the others.
I recommend ignoring all of these unless it’s your full‑time job.
At most, allocate a small percentage to one of these as part of your “speculative bets.”
Investment Principles: Why Selective Market Timing Can WorkLet me illustrate this with a few examples.
“Market timing” works best when there’s a clear, hard catalyst with a known timeframe.
A clear example: COVID in Q1 2020.
Anyone following the internet news early in 2020 knew about the virus’s impact in China and that it would spread globally within months.
Based on that, it would’ve been 100% reasonable to sell a significant portion of your “risky assets” (i.e., everything except gold and Treasuries) in January or February 2020.
If you were wrong and nothing happened, you could buy back in a few months with minor losses.
But if you were right, you could buy back at a 50% discount once central banks intervened.
You wouldn’t time it perfectly, but selling everything in February and buying back gradually through the rest of 2020 would’ve beaten a simple hold‑from‑January strategy.
On the other hand, timing wouldn’t have worked in 2022 because it was a slow decline, not a crash triggered by a single catalyst.
I agree with the advice to avoid timing based on intuition or “vibes,” but it can give a solid boost if very specific conditions are met and you’re willing to take the risk.
The Bottom Line: Why Investment Principles MatterIf you’re much younger than me, I hope you learn from my mistakes and get on the right path when you start working.
Close friends often ask why I still work or why I don’t just quit and trade full‑time.
There are several explanations, including some personal ones related to family and various “potential contingent liabilities.”
But the biggest factor is that I wasn’t aggressive or consistent enough with investing.
Today, I’d be in a much stronger position if I had simply contributed X% to my brokerage accounts every month since 2010.
I don’t think I’d “retire” for the reasons mentioned above, but I’d feel much more comfortable going part‑time instead of sitting at a computer 18 hours a day.
In other words, I’d have more options and a better life — and that should be the main reason to invest in anything.
Based on that, it would’ve been 100% reasonable to sell a significant portion of your “risky assets” (i.e., everything except gold and Treasuries) in January or February 2020.
If you were wrong and nothing happened, you could buy back in a few months with minor losses.
But if you were right, you could buy back at a 50% discount once central banks intervened.
You wouldn’t time it perfectly, but selling everything in February and buying back gradually through the rest of 2020 would’ve beaten a simple hold‑from‑January strategy.
On the other hand, timing wouldn’t have worked in 2022 because it was a slow decline, not a crash triggered by a single catalyst.
I agree with the advice to avoid timing based on intuition or “vibes,” but it can give a solid boost if very specific conditions are met and you’re willing to take the risk.
The Bottom Line: Why Investment Principles MatterIf you’re much younger than me, I hope you learn from my mistakes and get on the right path when you start working.
Close friends often ask why I still work or why I don’t just quit and trade full‑time.
There are several explanations, including some personal ones related to family and various “potential contingent liabilities.”
But the biggest factor is that I wasn’t aggressive or consistent enough with investing.
Today, I’d be in a much stronger position if I had simply contributed X% to my brokerage accounts every month since 2010.
I don’t think I’d “retire” for the reasons mentioned above, but I’d feel much more comfortable going part‑time instead of sitting at a computer 18 hours a day.
In other words, I’d have more options and a better life — and that should be the main reason to invest in anything.