Everytime you go mountaineering, you could have an unforgettable experience or you could die.
Many who die while climbing pass because of their singular focus on the summit. Oftentimes people summit a mountain, but die on the route back. Many are so focused on summiting that they take unwise risks to get there and then don’t make it back down due to foreseeable issues like volatile weather conditions. Sadly one of the worst tragedies on Everest was memorialized in John Krakeur’s Into Thin Air.
Speaking about this, my mountain guide (from RMI) told me guides have three rules in strict priority order:
- Come back down the mountain
- Have fun
- Attempt to summit
These rules apply beyond mountaineering. I keep thinking about how they apply throughout my life and no more than our personal finance strategy with a long running bull market:
- Survive – The first rule for any investing strategy, should simply be to survive. Very few risks you take on are worth the chance of going bankrupt and the stress this will put on you and your family
- Have fun – Whatever we’re able to spend/save so my family can not just survive but thrive and enjoy the one life we’re given is paramount. This is when we pay up.
- Maximize returns – Only once survival and personal welfare are taken into account, should we entirely maximize returns. So much of maximizing returns takes place while compounding over many years (why surviving is #1) but we also view maximizing investing returns as less applicable to today, but giving us future independence.
Because we don’t know what the world will hold, my wife and I personally hold a very high degree of cash. We likely won’t make the most returns over the long run, but this strategy is mirrored by some of the best companies in the world (Berkshire, Google, Apple, Microsoft, etc.). Our goal is never to time the market, but to maximize “time in market”. At the end of the day, we just want to stick around in the game and enjoy this incredible world we live in.