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Enough Time for Enough Money

July 12th, 2014 at 05:23 pm

I do not want my investing work time to cut into my free-for-fun time any more than is absolutely necessary. And that means doing just enough work to generate $20,000 a year of investment income(1*). Having that as a benchmark has radically changed my attitude towards investing. It has also relieved my pressure-to-invest stress level. And it has freed up a good chunk of extra time for more fun stuff. Here is how and why.

My previous maximum-income investing attitude had become a problem. That is because I follow a dividends-focused investing strategy(2*) that does not factor in (or expect) stock price appreciation. All my income expectations are based on dividends, so to maximize that income I need to stay fully invested in dividend-paying stocks. But those stock positions get regularly and steadily sold off(3*) as the positions build up enough unplanned for gain.

Those stock sales throw off a bunch of cash back into my investment account which in the past has virtually screamed at me not to be left sitting as cash but to be reinvested as soon as possible. And that pressure to invest has been a problem because it requires that I stay on the investing job until I do find other stocks to buy with that cash.

Now I have shifted to an enough-income investing attitude. As long as the projected annual dividends from my existing stock positions stay above $20,000 that is enough. The cash in the investment account no longer exerts an urgent pressure on me to be put back into stocks to maximize dividend income. I do not HAVE to give priority to the work of applying my research-intensive investing strategy(4*). I can take my time. I can do that research and stock buying at my own pace and when I like. And that has changed that activity from being a pressure job demanding many hours a week to a relaxed and interesting hobby I do when it suits me.

This has dramatically reduced my weekly investing work time. Instead of laboring 16 hours a week (and sometimes more) to stay fully invested, I just have to put 4 hours a week into essential avoid-at-your-own-risk portfolio monitoring(5*). That is "enough time for enough money." That has given me an extra 12 hours a week to hike(6*), or blog(7*) or just play(8*). And that has reduced my stress and made my days more relaxed. All of which has left me a much happier camper.

The takeaway: Seeking to maximize income can materially increase stress and definitely reduces time available for rest and leisure. If one cannot define a specific life-enhancing use for the extra money, it could be preferable to forego the added income and thereby avoid the labor and stress of producing it. Instead, one should consider enhancing one's life by taking the increased time that would thereby become available and using it to have fun and pursue personally satisfying activities.

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1* Enough Money From Enough Time:
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2* Why I Only Buy Dividend Stocks:
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3* What Makes Me Sell a Stock?:
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4* My High Yield, High Risk Investing:
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5* How I Stay On Top Of My Stocks:
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6* My Love Affair With Hiking:
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7* Why Share My Retirement Journey?:
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8* My Strategy Games Rainy Day Passion:
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