Back in 2012, when I left my finance job, I worried I had made a huge mistake. The money was good. The job provided decent status. But I was exhausted by the grind. So I did what any rational person would do when faced with a single, finite life: I chose a better lifestyle.
It would have been completely illogical to keep staying miserable just to collect a paycheck, especially when the long-term health costs were becoming obvious. Still, walking away from a high-paying career without another job lined up is terrifying.
So I built contingency plans.
I wrote about creating financial buffers for my financial buffers. The idea was simple: build so many walls that if a tsunami ever hit my finances, it would lose momentum before reaching my toes. Only if all those walls failed would I have to put the wetsuit back on and return to the grind.
One of the most important buffers was investing.
With just a chip and a chair, anything is possible. OK, maybe not just a chip, but realistically a $100,000 portfolio or more to survive off indefinitely.
And now, as AI sentinels close in on millions of livelihoods, gatekeepers tighten their grip, and capital increasingly concentrates at the top, learning how to become a competent investor is no longer optional. It is essential for survival.
Forget the mantra “learn to code.” The new mantra is “learn to invest.”
Why Investing Competence Matters More Than Ever
We know that artificial intelligence will eliminate or compress millions of jobs.
At the same time, the traditional paths to upward mobility are closing. Credentials matter less. Relationships matter more. And the wealthy, rationally acting in their own interests, are not lining up to redistribute their capital to the rest of us.
If labor becomes less valuable, capital becomes more powerful.
You can fight this reality, complain about it, or moralize about it with investor virtue signaling. Or you can adapt. I choose to adapt.
Becoming a competent investor is how you reclaim agency in a world of maximum uncertainty. Investing is one of the few skills that scales without asking permission.
A Goal All Competent Investors Should Have
There are countless goals and benchmarks investors can set. Beating the S&P 500. Retiring by 50. Saving enough for college. But while you are still working, there is one goal that is worth pursuing:
Try to have your investment returns regularly match or exceed your annual living expenses. Once that is accomplished, shoot for your investments to regularly match your day job income.
If you can achieve this goal at least 70% of the time before you FIRE, you are very likely a competent investor. You have developed a skill that gives you optionality. You can lose a job and not panic. You can take risks others cannot. You can wait instead of beg.
Once you FIRE, the goal naturally evolves.
Your next objective may be to regularly earn enough from your investments to pay for your basic living expenses again, even though your passive income already covers them.
This may sound redundant, but it is deliberate. My definition of FIRE, which I proposed back in 2009, is when your passive income covers your basic living expenses. Anything above that is margin of safety.
Protecting Your Retirement By Further Growing Your Wealth
The investor's goal in retirement is to keep building capital so your margin of safety widens over time, not shrinks.
Goodness knows your expenses can skyrocket due to inflation, kids, and medical expenses. The more capital you have working for you, the lower the probability you will ever need to return to work out of necessity.
The goal of making enough to cover your expenses or match your peak earning years isn’t a necessity. It’s simply something meaningful to pursue in retirement.
The FIRE movement is so back due to AI disruption. Learning to invest is an essential part of FIRE.
Investing Is Stressful Because You Take It Seriously
When you no longer have a day job, you will naturally find new ways to stay engaged. Since I started investing in 1996, and spent 13 years working in the equities departments of two major investment banks, investing has become a part of me.
Since my son was born in 2017, I set myself a personal challenge: try to earn more from my investments than my peak earnings year in 2007. It gives me a challenging goal as the provider.
I failed to do so in 2018 (flat), 2020 (close), 2022 (lost lots of money) , and 2023 (close). But I succeeded in 2019, 2021, 2023, 2024, 2025. A 50% success rate so far isn't great, but it's a fun challenge that keeps me sharp. The challenge also gives me endless material to write about, which helps sustain Financial Samurai.
Managing family finances can feel like a full-time job. The downside is emotional volatility.
When markets swing, the mood swings can be sharper than they should be. Ideally, a competent investor should have the calmness of a monk. A bad market day should be undetectable to your spouse and children. Sadly, I am not quite there yet, but I'm working on it.
The upside, however, is meaningful.
You can potentially make far more money, partially since you already have a large capital base in retirement. And the more money you have, the less you should worry about running out of money.
What gives me peace is knowing that even if something goes wrong, I have a realistic chance of recovering through investing. This is comforting as a parent.
What Makes a Competent Investor
Being competent does not mean being brilliant. It means having the ability to do something well enough, consistently enough, and to be trusted with responsibility over time.
A competent investor does not need to hit home runs. They need to avoid strikeouts when there are runners on base so they can keep growing their wealth in a consistent manner.
Here are the core traits of a competent investor:
1) They understand risk before chasing return. Risk management is key.
Competent investors know exactly how much they can lose without panicking or being forced to sell. They size positions accordingly, especially as their portfolios grow. Improper risk management is the biggest error I see in DIY investors.
Competent investors do not have major blowups with their own money. Because if you end up losing a lot of money, you end up losing a lot of time. And time is the most valuable commodity of all.
2) They have a repeatable framework.
They do not invest based on vibes, headlines, or social media noise. They have a process for evaluating opportunities, allocating capital, and exiting when the thesis breaks.
Competent investors understand the historical returns of different portfolio mixes, the duration of bear markets, and the frequency of corrections. With that context, they adjust their investment exposure accordingly.
3) They diversify methodically.
Competent investors diversify across asset classes, income streams, and time. But they also understand correlation and concentration. Diversification is a tool, not a religion.
4) They control behavior better than most.
They do not panic sell near bottoms or chase near tops. They know that emotional mistakes cost far more than analytical ones.
5) They measure results honestly.
They track performance against meaningful benchmarks, after fees, after taxes, and after inflation. They do not lie to themselves like Coast FIRE followers sometimes do, to make themselves feel better about their journey.
Use the free financial dashboard from Empower. It puts every account in one place – net worth, allocation, fees, and performance – so the truth is unavoidable. You can’t improve what you refuse to measure.
6) They are always learning.
Markets evolve. Technology evolves. Investment trends change. So must investors. Competence is not a destination; it is a maintained skill.
I didn’t spend three hours researching and writing a post about how different fund structures trade for fun. Sleeping in on a Sunday morning after having the kids to myself for two days would have been preferable7
I wrote the post because I needed to fully understand what to do and what to expect with my position in the Fundrise's venture product, VCX. My view is that it should trade at a premium to NAV given its hard to own, highly coveted assets. However, since many funds trade at a discount to NAV, I need to come up with a reasonable expected value estimate.
Thankfully, VCX performed incredibly well during its listing debut. As a result. the investment returns from the unrestricted shares I held are able to pay for two years of living expenses. The key is to stay humble as an investor as just when you think you can't lose, you can lose a lot.
If You Don’t Want to Become a Competent Investor, Outsource the Job
Not everyone wants to spend years learning how markets work, tracking portfolios, or thinking deeply about asset allocation and risk. That’s fine. There are so many other important and fun things to do.
But what’s not fine is doing nothing and hoping things magically work out. Decades from now, you could either end up with a fortune, or wonder longingly where all your money went. Small changes in returns compounds into huge differences over time.
If you’re too busy, disinterested, or honest enough to admit you don’t enjoy investing, the rational move is to outsource your money management that does take it seriously. Just like you wouldn’t perform your own surgery or represent yourself in a complex legal case, you shouldn’t half-ass something as important as your family’s financial future.
The key is intentional delegation.
You want to work with professionals who have systems, incentives, and experience aligned with helping you make steady, long-term progress, not just selling products or chasing hot trends.
Outsourcing doesn’t mean abdicating responsibility. It means choosing a higher-probability outcome when you know your own limitations. I'm not getting on my roof to clean my gutters, so I hire a professional to do so.
A competent investor understands themselves first. If your edge is earning, building, or creating, let someone else focus on optimizing your capital.
Investing as a Form of Self-Defense And Offense
In a world where job security is declining, investing is no longer just about wealth creation. It is about self-defense.
It is how you reduce dependence on any single employer, industry, or system. It is how you buy time when things go wrong. It is how you preserve dignity when circumstances change.
You do not need to be exceptional.
But you do need to be competent.
Because as the future becomes more uncertain, the ability to make your money work for you may be one of the most important skills you ever master.
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How to outsource and how to keep track while they do their job to make sure they are doing a good job, would be a helpful post after this. Or exactly how to go about becominh a competent investor diy style. Rn i just do index funds w roth accounts. Idk what to do after that.
Glad you made it back home safely from Tahoe. My wife and I were in Reno at the same time period. When they mentioned the road conditions as treacherous and near impossible to pass, it seemed like an overstatement. But this time around it was accurate. Haven’t seen a snowstorm like this in over 20 years up there. We played it safe and were snowed in by the closed roads on Tuesday 2/17/26 and we made the long trek back on Wednesday. Definitely didn’t want to take on additional risk if we didn’t have to.
Thanks. I’m impressed you decided to leave Wed! Palisades up top was still closed that day, and the lower mountain was quite windy and snowy. We stayed until Friday and enjoyed the blue bird day after the powder. But there were way too many people. At least the kids skiied hard blues and survived!
Wouldn’t define myself as competent, but at this time in life more intentionally informed, semi-competent and lucky investor. I didn’t seriously diversify and regularily make investment choices until past 50 yrs. Yes, a bit late. It was a psychological block when I did have a home mortgage and paying solo: …twice in life, since I’ve lived in different provinces for both personal and job move reasons.
Thankfully grew the retirement funds portion 5x which did include a stock that did well and did cash some shares to diversify and reduce risk.
If you are going to us a third party, please learn enough to minimize its drag on your overall returns. It is common for most “houses” to charge 0.75 to 1.25 annually of assets under management.
It makes absolutely no sense to give them say your whole portfolio of 5M and “manage” if part of it will be in safe assets. Give them only the portion you wish to be in growth (mostly stocks). Everyone should have enough knowledge to take you “safe” assets and purchase treasuries or the like for free. If you have your advisor put say 10% in treasuries in a bucket strategy your are automatically reducing your return from say 4% to 3% – and they are literally doing nothing. You could purchase them from free very easily.
I have 60% of my investable assets with a 0.75% manager with one goal – growth, and a secondary reason – don’t attempt to time the market. It helps me free up my own time relative to financial tracking and not worry about keeping up with inflation. The other 40% is at Vanguard in treasuries and munis and some bonds funds. No reason to pay a fee to purchase/hold those – just a drag – and it takes very little in terms of time/effort.
Great point and good advice. Thanks for sharing.
Thank you for sharing your insights! In our society it can feel off-putting, strange or inappropriate to discuss finance or investing topics with friends, family or colleagues and coworkers. Thanks Sam for the platform and ASH01 for your experience.
Thanks for sharing ASH. It can be awkward or worse discussing monetary matters with family or friends for the potential of assumptions or feeling exposed or that it is crude which is strange but I guess stems from some kind of puritanical heritage or our lack or education on the subject from an earlier age which would be at least a foundation upon which we could all draw understanding and dialogue. I’m therefore really grateful for this site Sam where we can openly discuss and share. It makes sense ASH not to pay a penny to others when you can certainly self manage safe investments like treasuries. Finding a great manager to invest in stocks would be wonderful to keep on it, I’m curious ASH how did you find your person?
Hi Joe B – I did alittle shopping and first discovered most wealth managers from the larger firms charge around the same fee for assets under management if you have over 1M in assets – 0.75 was pretty common. Less than 1M and percentage ticks up. Over 5M and percentage ticks down. After that I talked with a friend who recommended the firm he used. Then it was more drilling down. For instance – management fee is only the visible fee. What most people don’t realize is then they will sometimes put you in mutual funds that have elevated fees, like 1-3%. So imagine paying nearly one percent a year and they put it all in a “special” actively managed stock fund that charges a 3% fee and suddenly your are paying 4% – thats 40k a year of your 1M going to fees!!!! This isn’t made up stuff. Alot of folks who “just want some else to handle their money” have no idea what they are paying (and losing!)
So there is still some management involved if you want to really benefit. I tell my advisor only stock ETFs like SPY or VEU or VOO or individual stocks, but no individual stocks outside the S&P. I am good with some concentration in tech and financials for instance, but I don’t want to be in stuff like CIFR, OPEN or some crazy little biotech that he has “heard about” and could be a homerun. At 61 I’m about growth but made my dough and want to make sure don’t lose it.
In my opinion in addition to growth stocks a good asset manager should have access to good opportunities in the alternatives markets. Maybe it’s access to institutional shares of credit funds, maybe it’s select venture capital funds ( with top end managers) maybe these venture funds also allow for you to participate in SPV’s. Also liquidity planning, estate planning or even membership in certain clubs like private planes etc. Also they should have a sliding scale downward as your assets grow. Maybe it’s 1% from 1- 5 million, .75 from 5-10 etc.
Good stuff. Mine charges 0.75 but just investment advisor. Estate planning is a separate charge. Yes when shopping around see what the “management fee” includes and doesn’t include. Annual review? Quarterly review? tax planning? Most firms I have researched at least some of these are extra charges.
Alternative markets and venture funds great, but again, be aware of the fees. If they put you in those there will be more than the 0.75 “asset management fee.”
We use a group called Americana partners all the services are included. It’s an invite only group though and yes the VC investments are a higher fee but the manager doesn’t charge on VC their fee just the fund fee charged by the VC. It’s a ultra high net worth money manager so I do understand it’s access is very limited
And a perk I like is the managers also take stakes in the deals along side the clients
And they should connect
You with our families or individuals in their network for additional private placement opportunities. Find one like that ( I know one) and they are worth the weight in gold. Also tax strategy is key
The world runs on the tick of the clock. We all have less time than we know to build wealth. More urgency is needed by so many.
Given the impact of how financial aspects of society impact ones health, relationships, education, life experience, it’s strange that our education department would offer an elective on cooking but not money. Such a useful topic especially in younger years when the impact of compounding becomes even more relevant. It took me at least 20 years into adulthood to start to get a sense of investing, and agree that being competent in financial management is very important and becoming more so as society continues to change with the impact of globalization and technology. I understand because of my habits around money (I’m
so conservative) and lack of experience outsourcing would likely be a great option. Does anyone have any suggestions how to rate or find a professional investor? Do you look for fee vs analysis on a results basis, risk approach, reputation?
It is peculiar indeed. States are slowly rolling out mandatory personal finance courses in high school.
You can check out my Empower free financial checkup review and its benefits. I’ve done two free financial reviews since 2013, and found them to be helpful.
Going with fee-only is also great, especially if you have strong finance fundamentals. After you have about $1 – 2 million in investable assets, paying a fee on assets starts getting to be a lot for many.
Thanks for the reminder on the tool Sam
I’m going to check it out, especially in light of recent discussion I’ve had with an independent financial advisor to make an assessment of our financial picture.
As we are in FIRE the thought of a 1 percent fee more or less on our investable assets is ok in a year of strong returns but in a middling or bad year, it’s a big payment that would be a drag to not be able to utilize for our annual budget of our passive income.
Finding the right relationship seems like a challenge, does one value the person who is making the investments or the large firm? What is the timeline one might consider when hiring a financial advisor? 5 to 10 years?
Yes, financial management is a critical life skill. If you don’t want to teach yourself the basics, at least learn how to choose a fiduciary financial planner and spend the time interviewing candidates so you can hire one who will focus on YOUR goals and concerns.
I don’t think you should look at the years where you made your peak earnings from investments and the years when you did not, and say you manage it 50% of the time. What happens in a given year is largely irrelevant and we know markets are volatile. Given you have been out of the grind for 14 years now, it is the average over that time that counts, and tells the story. For me, retired 7 years, I have (after paying for living expenses in retirement) added to my investments ~70% of what my average after-tax salary was in the 15 years prior to retirement. I think these longer term averages are what counts. Of course I am no Buffet or top 0.1% investor. But if I can live as I want in retirement, and still save ~70% of what my salary used to be, I think that is good enough.
2007 is my peak income year from my job, not my investments.
You’ve got to do what’s most comfortable for you.
Hi Sam,
I agree with your premise. Given that trading activity—and consequently revenue—is likely to increase, you might consider owning some of the following exchanges.
Ranked by Market Capitalization (February 2026):
1. CME Group (CME) – $105B: Operates CME, CBOT, NYMEX, and COMEX for futures, options, and commodities trading.
2. Intercontinental Exchange (ICE) – $86B: Owns NYSE and operates global futures and options markets across multiple asset classes.
3. Nasdaq Inc. (NDAQ) – $55B: Operates the Nasdaq Stock Market and multiple equity options exchanges.
4. Coinbase Global (COIN) – $38-41B: Leading U.S. cryptocurrency exchange platform for digital asset trading.
5. CBOE Global Markets (CBOE) – $29B: Operates CBOE and multiple derivatives exchanges specializing in options and volatility products.
That’s an intriguing investment thesis. Will dig deeper. Thanks!
I appreciate this perspective. I support the framework of becoming a competent investor instead of chasing brilliance. For me building financial independence is less about trying to outperform everyone and more about slowly improving my ability to allocate capital wisely over time. I’m not an amazing investor by any sense, but I’m better at it today than I was 5, 10, 20 years ago.
I also believe investing should be a core life skill, especially for our kids. Traditional career paths are less predictable and relying on earned income alone feels riskier than it used to. Even a basic understanding of risk, asset allocation, and long term thinking can make a real difference. Most people do not need to be experts, but becoming competent and engaged with their own money feels increasingly essential. Thanks for inspiring us!