
Quote to Ponder
"Anybody that says I did it all myself is just kidding … They’re delusional … you still need luck."
Recommended Links
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- U.S. Stocks Are Now Pricier Than They Were in the Dot-Com Era - The Wall Street Journal
- Wow, have you seen the stock market lately? - Mr. Money Mustache
- Eduardo Repetto: Financial Science Meets Portfolio Innovation - Insightful Investor Podcast
- The Underperformance of Target Date Funds - The Rational Reminder Podcast
- Farewell Friends - HumbleDollar
- This is How the AI Bubble Could Burst - Plain English with Derek Thompson Podcast
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Recent Content From Quarry Hill
If you’ve been following along on social, you may have seen some of our new videos and resources. Here are a couple of our recent favorites:
A note from Bjorn Amundson, CFP®
A couple of weeks ago I was reviewing my website biography and had a shocking realization. I’ve been in this industry for 20 years! I double checked my records just to be sure. And yes, it’s true. My first job was in the fall of 2005.
Thinking back, I felt incredibly lucky to have been hired without the right qualifications - working as a phone rep for advisors calling in who were having a problem with their accounts. It was a super valuable experience, as I had to field 60 random questions per day from professionals who knew a lot more about finance than I did at the time.
The time has flown by, and I expect to be in the industry at least 20 more years (if not forever)! I thought I’d take the time to reflect on the biggest lessons learned over the last two decades:
- I am incredibly grateful to be here. Being a financial advisor is the best and most meaningful career I could imagine. It’s a true honor to be alongside people you truly care about as they go through graduations, retirements, childbirth, but also with them through some of their darkest hours- Death, divorce, job loss, and aging are all intricately tied to finance.
- I am lucky. To be a financial advisor for any length of time, you obviously have to be good. But being good isn't enough…you also have to get lucky at some point. I ask most advisors I meet what that point of luck was in their career, and they can all name it. Sometimes it's a client when you need it most, a piece of advice, or a spouse who told you that you're not allowed to give up. Luck comes to the prepared. But there's still some luck!
- It is really hard to disentangle luck from skill. There's a lot of people who are successful because they saved hard and spent less of their income. There's also a few people who did something that wasn't supposed to work, like put 100% of their portfolio into Bitcoin and Tesla. It’s hard to convince someone who got lucky that they got lucky.
- Incentives pervert advice. There's a lot of advisors out there who are more concerned with telling their clients what they want to hear than what their clients need to hear. You're being paid to tell them what they need to hear, but if you tell them just what they want to hear, they're a lot less likely to stick with you.
- I overvalued the financial savings of driving an old beat up car. One way I tried to save money early in my career was to own old cars that tended to be unreliable. The time, stress, and unexpected expenses this resulted in was absolutely not worth it.
- I overvalued the financial benefits of owning a home. If I could go back, I would tell myself to rent until I got married, and probably nearly until I had a child. Use the extra time and focus to gain additional education for my career. The maintenance costs and time required to own a home are very underappreciated.
- The benefits of additional education are undervalued.
- I had no idea how beneficial it would be to work for yourself. I've tremendously enjoyed the ability to serve clients in the way that I feel is best without someone pressuring me to do otherwise.
- The market is surprisingly consistent. When I first got out of college, I was told the market goes up 10% per year. And I thought, “yeah, it surely did for you, but everything's already been invented. And look at the state of the world. There's no way that's going to continue.” The S+P 500 has averaged 10.9% over the last 20 years. Right on track.
- People really overvalue cash. In my short career, the dollar has already lost 40% of it’s value. This is a catastrophic loss in the stock market, but people will sleep quite happily as this government promised event destroys their cash.
- Having financial flexibility seems nearly priceless to me, but I’m honestly not sure if fully retiring is healthy.
- If you really want to, retiring really early is possible for most Americans. If your job is miserable, most people, if they put their mind to it, could save 50% of their income and be done in about 15-20 years. This takes extreme frugality - which I believe makes your job more miserable and fails to provide a real escape valve afterwards.
- Tracking your net worth is my best financial habit. No one else does it. Every month I write down how much I have in each account. I haven't missed a single month since 2006. I always feel poor, but I can look back and see that I'm making progress. This is more important than tracking your budget—and way easier.
- Almost no one has what it takes to budget. Instead of focusing on your budget, only let a certain amount of money fall into your checking account because you're going to spend whatever you see there.
- Giving charitably is one of the best ways to fix your relationship with money. I've given 10% of my gross income to charity from a very early age. It's been challenging and sometimes terrifying. You learn that even though you do this risky thing, that you get nothing out of it—everything turns out okay. You learn that you didn't need that money anyways, but someone else really did.
- The more you focus on your investment returns, the more likely you are not to get them.
- I'm shocked how much fraud there is out there. I like everybody. I tend to innately trust people. In my career, I've run into two large Ponzi schemes, Email scams. Fake bitcoin, fake businesses, fake gold, fake silver etc. Be careful.
- The love of money may be the root of all evil, but it takes two forms:
- Some people love spending money so much that they will never have it.
- Some people are unable to spend OR give their money.
- Money CAN buy happiness. But there are diminishing returns. “I’ve been rich and I’ve been poor. And, believe me, rich is better.” seems true to me. But in the early days of my career, I wasn't unhappy even though I made very little money.
- The very best thing money buys me is that I never have to take a job I don’t like again.
Twenty years in this business has taught me that success comes from staying curious, being honest with clients, and appreciating the role that luck can play in our success. The financial principles that matter most are simple: track your progress, live below your means, and remember that money is a tool for freedom, not an end in itself.
I'm grateful for every lesson and every client who trusted me along the way. Here's to the next twenty years.
This material is intended for educational purposes only. You should always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. Nothing contained in the material constitutes a recommendation for purchase or sale of any security, investment advisory services or tax advice. The information and opinions expressed in the linked articles are from third parties, and while they are deemed reliable, we cannot guarantee their accuracy.