Investing
I have a keen interest in personal finance 💰 and investing 📈, which led me to discover the Financial Independence Retire Early (FIRE) community several years ago. The FIRE movement, popularized by Joe Dominguez and Vicki Robin in their book Your Money or Your Life, emphasizes extreme saving and investing with the goal of retiring significantly earlier than traditional methods typically allow. FIRE enthusiasts strive to attain financial freedom, enabling them to choose how they spend their time.
While I'm not a fan of the FIRE movement in its purest form (since I believe the ultimate goal should be finding a job you love rather than stopping work altogether, and I hope I never retire from academia!), I do think everyone can benefit from the core principles of saving and investing that FIRE promotes. In fact, I apply these principles myself to some extent.
Although there are many investing strategies available, my preferred one is called lazy investing 💤. This approach involves investing in a few low-cost index funds and holding them for the long term. Two of my favorite finance books, The Simple Path to Wealth, by J.L. Collins, and The Bogleheads' Guide to the Three-Fund Portfolio, by Taylor Larimore, explain this strategy in detail. One aspect of lazy investing that I particularly like is that it requires minimal effort while outperforming the majority of active investing strategies (there are tons of research studies supporting this claim; see, for instance, this article). My current lazy portfolio, managed by the excellent Spanish neobank MyInvestor, is based on a long-term growth strategy, with an 80% allocation to stocks and 20% to bonds. In particular, my portfolio consists of the following index funds and their respective allocations:
- Fidelity S&P 500 Index Fund EUR P Acc (IE00BYX5MX67): 40%.
- Fidelity MSCI World Index Fund EUR P Acc (IE00BYX5NX33): 40%. This fund overlaps with the previous one, making my total allocation in the S&P 500 and non-US stocks around 65% and 15%, respectively.
- iShares Euro Investment Grade Corporate Bond Index Fund (IE) Institutional Acc EUR (IE00B67T5G21): 20%. This bond fund adds diversification to my overall portfolio through exposure to different asset classes and currencies.
Regardless of your financial preferences, I strongly encourage you to start investing today, since, it is crucial for your long-term financial well-being. It is alarming how many people do not understand the importance of investing (I was one of them some years ago 🤦🏻♂️), which is why I have included this section on my website. Getting started with investing is, in my humble opinion, the most important financial decision that you can make today, and I am not exaggerating!
Investing is not nearly as hard as financial advisors want you to believe, and I am here to help you (for free!), because I think everyone deserves to be aware of the optimal way to build their wealth without depending on others. Feel free to contact me for information about investing and the FIRE movement.