plonkee money an english-er's thoughts on personal finance

August 24, 2007

getting a good night’s sleep

Filed under: investment — plonkee @ 12:00 pm

So Trent (the simple dollar) and JLP (all financial matters) had an argument about investing, on JLP’s blog caused by a post on Trent’s blog. Only in the geeky world of personal finance blogging should that ever be a big deal. In my honest opinion (and of course I am always right 😉 ), what Trent meant to say and what everyone read him as saying are two completely different things.

What he meant to say, that “your investments shouldn’t keep you awake at night” is excellent advice. Because there are more important things than money. Like life, and a good night’s sleep. If you are that worried about your invesments, there are two possibilities..

  1. You are right to lose sleep over this investment. It is too risky for you, investing in it was a mistake.
  2. You are wrong to lose sleep over this investment. The level of risk it involves is sensible. You are losing sleep over this investment because you do not understand it.

The only way to determine which of the two categories your sleep-depriving investments fall into is to educate yourself on them. You will then either learn that your investment is fine and dandy, and you will no longer be worried about it. Or, you will learn that it is not a good investment for you, in which case you should probably (but not always) stop throwing good money after bad, cut your losses and move on to a more suitable investment. In any case, educating yourself should also help you work out which is the best way to proceed with a dud investment.

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