6 investment lessons from 'Just Keep Buying', by Nick Maggiulli

Updated: 12 Oct 2023, 02:14 PM IST

Do not wait for market dips. Save enough to invest enough. Most importantly, have time on your side when you are investing your money. Time stands as the most crucial asset in wealth-building. Opportunities to increase your earnings are endless, but time cannot be bought.

Nick Maggiulli wrote in his book, “It’s not about when to buy, how much to buy, or what to buy—just to keep buying”.

Everyone wants to know how much money to save or how much to invest for a financially viable future. No one actually knows how to get right with finances. Every decision regarding finance seems like a shortcoming when assessed in hindsight, which is why not many people make money or continue to work late in life. The financial industry does provide clues on how much one must save and invest or how to invest or the importance of investing early in life. However, all answers and solutions to inquiries are based on data, conjectures, and beliefs. Not that they are wrong, but the same rules do not apply to everybody, which means that you must be careful of what information or advice you absorb in the long run.

What does Nick Maggiulli’s book say?

Popular finance blogger Nick Maggiulli realizes how the complexity of numbers adds to the difficulty of understanding personal finances. In his much-acclaimed book “Just Keep Buying: Proven Ways to Save Money and Build Your Wealth”, he crunches huge numbers to elucidate investing and bring forth to people the simple side of personal finance that many people are averse to.

The content in the book can be summed up in just one line “It’s not about when to buy, how much to buy, or what to buy—just to keep buying”. Nick Maggiulli serves as the Chief Operating Officer and Data Scientist at Ritholtz Wealth Management, where he holds responsibilities for firm-wide operations and offers valuable insights in the field of business intelligence. Additionally, he is the creative mind behind OfDollarsAndData.com, a blog dedicated to exploring the convergence of data and personal finance. His current net worth is estimated at $ 1.18 million as available on the web.

This book on personal finance dwells on two aspects, viz., saving and investing. With solid data and empirical evidence as his foundation, Maggiulli contends that the most effective wealth-building strategy entails the consistent and early accumulation of savings, coupled with prudent investments in low-cost index funds.

Here are some pivotal insights extracted from the book:

  • You don’t have to amass a substantial sum to begin. Maggiulli suggests setting aside a minimum of 15 per cent of your earnings, but even a smaller contribution can accumulate over time.
  • Avoid attempting to time the market. Predicting when the stock market will rise or fall is an exercise in futility, making long-term investments and enduring short-term fluctuations the wisest approach.
  • Opt for low-cost index funds. These are a category of mutual funds or exchange-traded funds (ETFs) designed to mirror the performance of a particular market index, such as the S&P 500. They provide an excellent means of investing in a diversified portfolio of stocks without the need to select individual stocks.
  • Regularly readjust your portfolio. This entails selling some of your successful investments and acquiring more of your underperforming ones to uphold your desired asset allocation.
  • Be quick to buy and equally slow to sell. You know when and how much to buy. You just need to know when to sell your stocks. There are just three valid motives for selling an investment: for rebalancing, to divest from a concentrated or declining position, or to fulfill financial requirements. Nonetheless, given the historical upward trajectory of markets, the ideal approach is to delay selling for as long as feasible. The guiding principle is: “Acquire swiftly, but divest gradually”.
  • Retirement should be a lifestyle decision; not a financial one. The decision to retire should be made when we have accumulated savings equal to 25 times our anticipated spending in the first year of retirement. Achieving this milestone ensures a secure retirement. Nevertheless, it’s important to note that this guideline assumes a constant level of spending for retirees, whereas spending often decreases over time.

In concluding the financial considerations, he emphasizes that time will perpetually stand as our most invaluable asset. “We may discover ways to increase our earnings, but there’s no price tag on acquiring more time.”

It is not difficult to be smart with your money. Just follow some simple strategies about how to save and invest your money. This will not only help you survive a market crash but also thrive on it while helping you create wealth for your future.


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First Published: 12 Oct 2023, 02:13 PM IST