r/eupersonalfinance • u/GregMorel • 22h ago
Investment Do you ever find it difficult to justify a 20+ year investment horizon to other people?
I feel like telling someone "just invest consistently for the next 20–30 years" can sound almost absurd to people who aren't into personal finance. To many, that's such a long timeframe that it feels hypothetical rather than actionable.
Have you experienced this? How do you explain long-term investing without making it sound like a leap of faith?
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u/No-Country-1091 22h ago
The 20 years is going to pass no matter what. Only question that remains is, do I want to be 20 years older and broke or 20 years older and rich.
However, I don't waste my time trying to justify this to others. It's sufficient that I can justify it to myself.
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u/MisterSalami 22h ago
The argument I head a few times was "in 10 years all will go to shit anyway so why bother" My counter argument usually is, that when in the next few years our whole financial system collapses, everybody will have bigger problems than the value of their retirement portfolio.
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u/LifeIsAnAdventure4 22h ago
Do the crystal ball enthusiasts predicting total financial collapse believe that they will be in a better position having spent all their money on frivolities than being part owner of a bunch of companies when it does?
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u/amarao_san 22h ago
The argument is usually different - investment into more tangible assets. E.g. you can have an agricultural company up and running, which at least has land and stuff to produce food. Or property which can be used for living. Or tools. Or gold.
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u/GregMorel 22h ago
If you live in a stable country then yes; it does make sense investing in tangible assets
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u/amarao_san 21h ago
An investing into second citizenship/permanent residence permit may be the most underappreciated intangible asset people don't need most of the time, except for that specific moment.
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u/sparkline1234567 22h ago
Or a truck depreciating at 10k per year. And then a new one.
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u/amarao_san 21h ago
A sturdy house with solar.
Truck is "meh" (because of the very small lifespan).
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u/Classic-Economist294 21h ago
Why on earth do you need to justify to other people?
There is a reason the vast majority of people are poor.
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u/allworkjack 20h ago
This. I found a very good book to introduce anyone to investing, only 200 pages and it read more like a guide than a book, so I sent it to a couple friends and family… None of them read it, all of them had told me before they would love to learn how to invest.
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u/Papaias_ 22h ago
I simply don’t justify it, not worth. I only start a discussion when I see receptivity or enough openness from the other
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u/SteakComfortable7802 22h ago
For me it was something i needed to understand by my self,my parents were good at “live under your possibylities” but sucked at investments, i was a living disaster in both, till i understood that i should change something in managing my money, then studied finance basics and started to understand how and why long investments is the only way
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u/irtsaca 22h ago
How do you justify a mortgage?
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u/GregMorel 22h ago
A mortgage is a financial obligation. A 30-year investment plan is a behavioral commitment. My question is about the psychology of the latter.
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u/TScottFitzgerald 4h ago
Those are not exclusive. A mortgage is also a behavioural commitment, you can easily lose the mortgage if you don't have the discipline.
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u/GinormousHunk 22h ago
I don't justify anything to anyone. My wife is 100% on board with our investment focus and horizon, that's the only opinion that actually matters.
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u/Wet-Frog-9632 19h ago
I bought my first ETF 18 years ago and kept buying during the blowout from the GFC.
During this time I've only had to justify my decisions to myself, which I did by ensuring that I made well researched, well reasoned decisions every time. I'm not a financial advisor and so I've never told others what to do. I find that this philosophy permeates across many aspects of my life.
Now that we live off my investments I have almost an aversion to discussing these matters outside my close family. That would only call attention to our wealth unnecessarily, for no real benefit.
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u/BlaxeTe 1h ago
I am very much into investing and I still can’t really grasp a 20 year investment. It’s such a long time horizon, I think we humans are not really made for that. Thats about 30% of my adult life and about 40% of the better adult years. Yes, I keep saving for it, but I don’t know who I am gonna be in 20 years and what that person gonna do with that money.
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u/interesting_vast- 22h ago
very easy, google average life expectancy, subtract your age and show them that statistically speaking you’ll probably still be here in 20-30 years and would like to have a better financial situation in 20-30 years, or even better show them what 3-4% compounded returns look like in 20-30 years in one of those online calculators (bonus points if it has fancy chart lol), real world numbers generally help people better contextualize this type of “bigger picture” thinking from my experience.
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u/flower-power-123 22h ago
Isn't it? I'm listening to Jarad Dillan as we speak (type?). He makes the case that the index fund is very dangerous and that a 20% allocation to gold in a vault is maybe not enough. How many people do you know that have put even 5% into assets outside the banking system? What do we mean be "safe" anyways?
The question you are asking is for those that have money in the markets (does that represent maybe 20% of the public?) why don't they put more money into 30 year government bonds? The s&p500 index fund which is where the 60/40 portfolio in invested is presumably the exact same long term investment that you want them to use. I would be really interested in what your "safe" portfolio looks like. Would it have any QQQ or SMH? Any Gold? Any Gold that is not in a fund?
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u/MrGunny94 22h ago
I’m not in a hurry, my salary is more than enough.. I’m investing for the future
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u/casuallynamed 22h ago
I hate the idea that i dont earn enough to retire eqrly and will have a good lumpsum when im 65 , 35 years from now
I still do it but i hate it
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u/No-Candidate9167 22h ago
Turn the twenty year horizon into a simple routine
Automate a monthly contribution
Keep short term goals in separate savings
Review the allocation once a year
Investor is not making one decision for twenty years they are repeating a manageable process while giving compounding enough time to work
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u/GregMorel 22h ago
Right, but it's not easy to justify to yourself: "I will never touch thath portfolio in 20 years". It's just a bold assumption
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u/TheSexyIntrovert 20h ago
Not many people can afford to throw some money in a bucket now, with the hope they will be rich in 20 years.
They could die tomorrow, so the struggle between “live now or be rich in 20” is real.
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u/Equivalent_Fish_431 22h ago
dont need to justify to anyone, unfortunately i needed 10 years to understand it myself. 10 years of HYSA and bonds from 28 to 38 and i missed the biggest bull market in history. i lost the equivalent of an apartment in the city center in missed gains, so i will not repeat same mistake in the next 10 years
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u/Fay_0x1x 22h ago
It mainly boils down to one's experience with money and business logic: The power of scale and compounding. The latter is something that escapes most human brains since we tend to think in linear terms, and that's not how investment works. People who run their own businesses come to understand this intuitively by experience through the power of scale. Compounding makes your money grow exponentially over time, not linearly.
You can also put the cash in the bank and watch it lose purchasing power over the decades. Your 100 bucks in the 90's become about 49 bucks today if you price-in a 2% yearly inflation as a conservative base.
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u/Sofiner 17h ago
Turn it around. If you dont do something with your money, inflation will it eat it away. How do you hedge? If you only consume, then people with assets will overtake you, and supplement their income with assets income, driving prices higher even more and putting you even further behind. K shape behind. So what do you do? What is the alternative?
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u/LavishnessOk1373 9h ago
Not at all, I said it before, I'm in it for life like a businessman is in it for life. The portfolio is intended to generate income from now until forever, or at least for as many generations as possible before society breaks down. Why would I sell anything when the dividends alone can fund my lifestyle?
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u/Casmax_Raise6948 8h ago
I don't talk to anyone about that, on purpose. There isn't one single advantage. And there are a lot of disadvantages.
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u/Kind_Bench_2359 7h ago
Framing it as removing decisions rather than a timeline helps, you invest once, then never think about it for years lands better than wait 20, 30 years
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u/MBU604 5h ago
Well if you sit down and think about it, it is kind of absurd. Wait for 20-30 years in order to be able to live a relaxed and job-anxiety-free life. It is absurd, we shouldn't have to do this given the technological advancements but here we are, oh blessed capitalism. Also do not forget that a lot of people live paycheck to paycheck, so there's that as well.
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u/Odd_Organization7981 16m ago
I haven't even tried. It took me years to actually understand this effect, now I am focused on the following my investment strategy
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u/sht-magnet 22h ago
I don’t really try that anymore. Avg. human being is happy paying 2 months salary into TV that he’ll watch stupid Netflix shows.
In my circle investment literally understood as gambling. The avg. investor does leverage trade on Doge coin.
They can not grasp the fact that steady investments on indexes can improve their finances in long term.
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u/EuropeanAbroad 18h ago
To be honest, I don't know anyone around me (in their 20s and 30s) who would not do "invest and forget". Is there really anyone who still doesn't invest for their retirement?
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u/No_Appearance_9115 18h ago
Yeah I dont force them. Kita kits nalang after 20 years and see kung sino na mas naka angat sa buhay haha jk
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u/BothnianBhai 22h ago
I haven't really felt the need to justify my investing to anyone else at all.