Millionaire Librarian

I want to mentally withstand the urge to take my money out if the market drops 30%. I’m 100% stocks, but that means I’m entirely in index funds because I trust the future of the world — or things are so bad that I don’t care.

It is easy to invest in single stocks or tech when everyone is making money. The real challenge is staying invested in Bitcoin or something similarly speculative when it’s down 60% and looks to be going to zero. Imagine you’re in a speculative investment and it drops 60% over a year. That would be terrible. You have anchored on an amount twice as high, and there is no end in sight. There is no promise it will return to where it was. Index funds have always regained what they lost and reached new heights.

Index funds will not 100x in a couple of weeks, but they will slowly grow your money by roughly 10% a year until you have enough that that 10% is considerable and replaces your income.

Also, because index funds hold thousands of companies, your portfolio is dependent not on a single sector or company, but on the United States or the world. If the world economy fails, then I have bigger problems than my portfolio.