Life Lessons from the Stock Market

The stock market is often compared to a roller coaster, filled with ups and downs that mirror the unpredictability of life itself.

Both are driven by forces beyond our control, yet they offer important lessons on how to thrive amid uncertainty.

Volatility is Inevitable

In the stock market, volatility is a given – stocks go up and down for reasons that aren’t always clear.

So too with life – full of unpredictable moments of triumph and challenge.

Understanding and accepting volatility helps us avoid getting caught up in the short-term ups and downs, allowing us to maintain perspective and stay focused on the bigger picture.

Takeaway: Ride the waves, don’t let them knock you down!

Small Efforts Compound Over Time

One of the most powerful lessons from investing is the impact of compounding.

Life works the same way and the magic of compounding applies to practically all facets:

  • habits & routines
  • relationships
  • personal growth & learning
  • reputation & trust
  • health

While the small actions in life may not show immediate results, over a long enough time horizon meaningful outcomes can be achieved.

Takeaway: Your daily habits are a forward-looking indicator of your future outcomes!

The Long Game Always Wins

Trying to time the stock market is notoriously difficult, and the same applies to life.

Identifying the “perfect” moment to do that big thing in your life (i.e. moving to THAT city, starting THAT business, switching to THAT career) is an exercise that can only be done in hindsight.

Consider operating from a place where you are minimizing future regret.

That is, instead of trying to time things exactly right, zoom out on your life, get clear on your priorities, and make decisions from a place where you are living in integrity with your values/priorities.

Takeaway: Make your 90-year-old self proud!

Diversification Creates Stability

In investing, diversification reduces the impact of any one loss by spreading risk across different assets.

In life, we can do the same by pursuing a variety of experiences, interests, and relationships.

By diversifying our inputs and non-financial investments, we are more resilient when one area doesn’t pan out as expected, allowing us to lean on other strengths and interests.

Takeaway: Anti-fragility is a superpower!

Emotional Discipline is Key

Emotions can sabotage even the best investment strategy. Fear and greed often drive investors to make decisions they later regret.

Similarly, in life, emotional reactions can lead us off course.

Whether it’s in moments of panic or excitement, emotional discipline helps us stay focused on long-term goals, rather than reacting to immediate circumstances.

Takeaway: Discipline > Feelings

Final Thoughts

Both life and the stock market are unpredictable, but with a long-term mindset, managed risks, and consistent effort, success is more likely in both.

Like wise investors, those who stay patient, diversified, and disciplined will find that the rewards – whether financial or personal – are well worth the wait.

Moon Elopes Near Nestle

If you haven’t read about the moon eloping near Nestle, no shame. It hasn’t… yet.

If you love anagrams, perhaps you’ve already caught on that it’s time to be on alert for Open Enrollment Season. 

Whether you’re an employee deciding between health plans or an employer looking to structure a competitive benefits package, now’s the time to make decisions that will impact you in the year ahead.

Here’s a breakdown of key benefits to review, plus some practical advice for employers on how to manage 401k plan costs.

For Employees: 

  1. Health Insurance: 

It’s easy to stick with the same health plan year after year, but your needs – and your plan options – might have changed.

Review what’s available and ask yourself if your current plan still makes sense.

  • High Deductible Health Plan (HDHP) + HSA: If you’re generally healthy and can handle higher out-of-pocket costs, consider an HDHP. The upside? These plans often have lower premiums, and they let you contribute to a Health Savings Account (HSA).
    • HSAs = Triple Tax Benefit: Contributions are tax-deductible, the money grows tax-free, and distributions are tax-free so long as used for qualified medical expenses.
    • Your HSA can become your healthcare 401k.
  1. Legal Benefits: 

If your company offers a legal plan, it’s worth considering.

Many people put off creating essential documents like a will or power of attorney simply because they don’t want to deal with it or pay lawyer fees. Legal plans can help you get these done at a fraction of the cost.

  • What to look for: A legal plan that covers the basics—wills, trusts, and powers of attorney. Even if you don’t need one immediately, having access to affordable legal help when you do can be invaluable.
  1. Flexible Spending Accounts (FSAs):

An FSA lets you put away pre-tax dollars for medical expenses, but there’s a catch—you typically need to use the money by the end of the year. Make sure you only contribute what you’ll actually spend.

  • Dependent Care FSA: If you have young kids in daycare or elderly family members who need care, a dependent care FSA can save you a significant amount in taxes. Just like with a healthcare FSA, be careful not to overestimate what you’ll need, since unused funds usually don’t roll over.
  1. Vision and Dental:

Don’t skip the vision and dental coverage, even if you think your teeth and eyes are in good shape. Regular checkups can catch problems early and save you money down the line.

  • Vision: Yearly eye exams are often covered, plus you might get a discount or annual stipend for glasses or contacts.
  • Dental: Your oral health is important! Dental coverage is a smart investment as it often covers preventive care like cleanings while also reducing costs for major procedures.
  1. Retirement Plans: 

Open enrollment is also a good time to check in on your retirement plan.

  • Review your contribution %: If your employer offers a 401(k) match, make sure you’re contributing enough to get this free money.
  • Review your investments: Are they still aligned with your risk tolerance, retirement goals, and broader portfolio? If you haven’t checked in a while, it’s worth a review.
For Employers

As an employer, open enrollment season is a great time to review your health & employee wellness benefits.

One often overlooked area to consider giving some attention:

Retirement Plan Costs

Retirement plans are a cornerstone of a good benefits package, but the costs can add up—especially for owners with large accounts compared to their employees.

Make the most out of your plan:  

– Pay plan expenses directly: If you’re a business owner with the largest account in your plan, it often makes sense to cover certain fees (like 3(38) or 3(21) fiduciary fees) through the business, rather than having them deducted pro-rata from employee 401(k) accounts. This keeps costs down for employees and gives you a potential business tax deduction.

– Review 401(k) admin fees: If you haven’t reviewed your plan’s fees recently, it might be time to renegotiate or shop around for a better deal. Lowering administrative costs benefits both you and your employees.

Final Thoughts

Open enrollment isn’t just a routine checkbox – it’s a chance to set yourself (or your employees) up for success. Take the time to review your options, adjust where needed, and make the most of the benefits that are available.