What is the screw it point? In short, it’s the point of not caring – but in a good way.

One way I like to thing about it; My high school baseball coached used the exact same phrase (well almost the exact same) to describe the mentality you should have while pitching. Strike a guy out? Screw it, games not over yet. Give up a home run? Screw it, get the next guy.

It really is a great phrase because embodies a fairly complex and important concept in just two words. It’s about the importance of staying even keel. Of not letting yourself get too high when good things happen or getting to down when bad things happen.

The concept is great for investing. I’ve mentioned before many investors allow emotion to get the best of them. The number one reason average investors tend to under-perform averages over time is they have a tendency to sell low. They see the dollar value of their account dropping and panic and sell to prevent more losses.

Being able to trust your research and understand that day-to-day stock prices don’t always reflect the long-term prospects of the company is crucial for long-term investing. Your mentally should be to see a lower stock price as a more attractive entry point as opposed to a forebear-er of doom (assuming no change in the underlying fundamentals of the company).

One of the main goals we have in investing is getting to screw it point in life. For me, that is the point where my dividend income covers all my necessary living expenses. I am talking about rent, food, and any bills I have pay. That becomes the point you truly have “made it.” When you can really do whatever you like with your life. It’s the point where you can start working on what you want to work on, where money can truly come as an afterthought.

Want to go on a European trip? Ok, you can find some work to cover that cost. Need to raise some additional funds because to pay your child’s college tuition? Ok, you can work and save almost all of what you are making. Want to live frugally and devote your time to volunteering in your community? You can do that as well. Your ownership stakes are throwing off enough dividends to cover your basic needs.

It really is the point where life just gets incredibly exciting. Which is good news because most of us won’t hit that point until later in life than we’d probably like. But by having that goal, and knowing what your are working toward, it can help to get there that much quicker. It makes the decision on spending vs saving that much easier. If knowing that buying a $500,000 house vs buying a $200,000 house pushes your getting to the screw it point back by 10 years, it can help make that decision a lot easier.

Categories: Foundation