Patience Is A Super-Power

You already know that time was invented, so everything did not have to happen at once. The obvious question is. “Why do people behave as if time is always short?”

If you are an investor

The single most important thing to learn is that the big money is in the waiting.

You can get the idea by counting the doubles.

Over some period of time, money doubles. You could estimate the time using the rule of 72. The time to double equals 72 divided by the yield. For example, at 9%, money doubles in eight years. In 40 years, it will double five times. That’s just arithmetic. Meaning is what you want.

What does it mean?

If you quit at 32 years, you get one double less. Again obvious. What’s not so obvious is the last double provides you more money than all the doubles before it.

Suppose you start with $10,000. After 32 years, you will have 16 times as much, $160,000. That’s $150,000 of new money. At year 40, you would have one more double, so $320,000. That’s $310,000 of new money. More than the first four together. That last double matters, but you cannot get it without waiting. Impatience is your enemy.

The key to being able to wait is planning.

Waiting is tough, and not many are good at it. There are two reasons:

  1. People will need at least some of the money before the last double can come to pass. That is a planning failure. If you know you will want retirement money at 65, starting to accumulate at 25 will yield the extra double compared to starting at 33. When you start planning and acting earlier, good things happen almost automatically.
  2. People lose interest in the early going. If you invest $10,000 at 9% In three years, you will have $12,950. Hardly the makings of enthusiasm. If you think linearly, and most people do, three years out of forty should have been 3/40ths of $320,000 – $24,000. Where is the rest of my money? Intuition is not your friend when considering exponential growth.

When you begin, write your expectations down year by year. Maybe put it in a spreadsheet and work out the future growth. Be sure you are comparing your observed results to reality. Unreasonable short-run expectations kill more saving and investment efforts than any other factor. That is especially disturbing given the purpose for the money was long-term. If the long run is working, tampering with it in the short run is not a winning move.

Remember Bert Lance’s Law, “if it ain’t broke, don’t fix it.” The trick is knowing when it ain’t broke.

A Caveat. Notice that investing is never isolated from the rest of life. Young people, in particular, may have other more compelling ways to use their money. As the economists say, “Everything is a tradeoff.” Be sure you know how to assess the tradeoffs effectively.

Thoughts from expert observers:

“The investor’s chief problem — and even his worst enemy — is likely to be himself.” – Benjamin Graham.

“The strongest of all warriors are these two: Time and Patience” – Leo Tolstoy, War and Peace.

“I believe that good investors are successful not because of their IQ, but because they have an investing discipline” – Stanley Druckenmiller.

“The stock market is a device for transferring money from the impatient to the patient” – Warren Buffett.

The bit to take away.

Know yourself and know how compound growth works.

I build strategic, fact-based estate and income plans. The plans identify alternate ways to achieve spending and estate distribution goals. In the past, I have been a planner with a large insurance, employee benefits, and investment agency, a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business. I have appeared on more than 100 television shows on financial planning. I have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, and Banks – from CIBC to the Business Development Bank.

Be in touch at 705-927-4770 or by email at

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