Life Lessons Learned: Match the Market, Don’t Try To Beat It

Originally published in 425 Business - August 2022 issue

Thirty-five years ago, I wouldn’t have made anyone’s “30 under 30” list as someone who is taking their creative energy to the next level and making a difference in their world.

Then, I was a soon-to-be unemployed stockbroker at a major Wall Street firm in downtown Seattle, exhausted at an early age by the commissioned business of trading stocks and bonds. I sat there, staring out a high-rise window, wondering what I was going to do next with my life.

Out of that emptiness, and a little wisdom learned along the way, came an enormous desire to share a story and write a book on a new approach to investing and a new way of building financial wealth to last a lifetime.

While Wall Street was caught up in identifying the top trends, industries, companies, and mutual funds to own in your portfolio, John Bogle and his crew at Vanguard were intent on offering you a starkly different choice: Don’t try to pick the top stocks; just own them all through a low-cost “total stock market” index fund.

Thirty-five years ago, if you had peered into a company’s 401(k) investment plan, it would have been loaded with expensive mutual funds, run by a stock-picking manager intent on beating the market.

Today, the primary investment choices within most, if not all, company-sponsored 401(k) plans are low-cost index funds intent on matching the market, not beating it, and that’s the way it should be.

My first book, The Coffeehouse Investor: How to Build Wealth, Ignore Wall Street, and Get On With Your Life, was published in 1998 with the Dow Jones Industrial Average (DJIA) trading around 9,000. Over the years, it has helped workers to do just that: build wealth, ignore the noise of Wall Street, and get on with making a difference in the world.

Almost a quarter century later, the DJIA has traded above 30,000. And those same Coffeehouse Investor principles from 25 years ago will continue to guide portfolio decisions through the next quarter century.

Through it all, Wall Street will continue to promote the latest investment craze, whether it be the dot-com stocks of yesteryear, or the cryptocurrencies and meme stocks of today.

Whether or not you make it on a “30 under 30” list, you can make a difference in this world. It starts by using your creative energy, not on cryptocurrencies and “hot” stocks, but in a way that your energy feeds your soul, and your actions allow you to touch the world in your own unique way.

The past three years — accelerated by the COVID pandemic — have challenged us like never before to awaken that creative spirit within and apply it to our careers and communities, to a world that is aching for new and better ways to address challenges and solve problems.

When it comes to investing, it is time to ignore Wall Street, focus on your creative energy, and build wealth that lasts a lifetime.

This content is intended to be used for educational purposes only and does not constitute a solicitation to purchase any security or advisory services. Past performance is no guarantee of future results. An investment in any security involves significant risks and any investment may lose value. Refer to all risk disclosures related to each security product carefully before investing. Soundmark Wealth Management, LLC, its advisors and its affiliates do not provide tax or accounting services. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax or accounting advice. Please consult with your tax advisor prior to engaging in any transaction.