Just Keep Buying

Just Keep Buying will help you answer the big questions about saving and investing money with clever stories and interesting data, all while acknowledging that your needs and desires will change throughout life and that, therefore, your financial behavior will have to do the same.

The Dolly Varden trout, an Alaskan fish species, puzzled biologists for decades. Despite only having a brief window of plentiful food each year — when salmon laid eggs in their waters — the fish continued to thrive year round. How did they do it?

Eventually, scientists discovered that the fish shrink and grow their digestive organs depending on food availability. When the salmon show up, they speed up their metabolism so they can take in more calories. Then, when the other fish leave, they slow down digestion. This way, they get by with much less food throughout the remainder of the year!

The lesson here, according to Maggiulli, is that you should save what you can, when you can. Relying on a fixed, prescribed savings rate is nonsense.

For starters, poorer people have much less room to save. If your entire income goes to rent and food, “just take away 10% won’t help.” But even richer folks find their income varying drastically over time. Personally, my income in 2020 was twice as high as in 2021. I couldn’t possibly have saved the same amount in both years.

Instead of obsessing over some fixed savings rate and then feeling bad when you don’t hit it, try adjusting. When things are going well, put away a little more for gloomier times. And when times are tough, know that it’s okay to spend more on taking care of yourself and your family right now.

As a crypto investor, I’ve made a classic mistake: I got carried away in the bull market. When my assets went up, I focused more on managing my assets. I moved money around from position A into position B with no effect. I worked less and spent more time looking at market news. Of course, when the music stopped, my portfolio went down just the same as everyone else’s. What I should have done, according to trader and investor Carter Thomas, is leave the market alone — just like in a bear market. Had I focused more on work, my portfolio would have behaved almost identically, but I might have doubled my income. Chances are, your biggest lever to save more is to earn more, not spend less. If you earn $3,000 per month and spend $2,000 per month, even if you cut your spending in half, your savings only double. But what if you learn how to make $10,000 per month? You could…