While many view patience as "taking things slow", the truth is that patience has nothing to do with speed and everything to do with mindset. Practicing patience as an investor is vital for long term financial health and well being. Here is how we can all be The Patient Investor.

>Investant Definition of Patience: "The ability to endure stressful and uncomfortable circumstances **with calmness**."

### Market In Distress

Whether the market is trending up or down, the patient investor will make consistent contributions and trust the process.

It can be difficult to keep calm in turbulent markets - especially when the majority of our wealth is held in securities and instruments directly tied to market performance. This is why our recommended approach to personal finance management - including holding 3 to 6 months of expenses in a high yield savings account ([HYSA](https://investant.net/blog/TheHighYieldSavingsAccountIn2024)) - is intended to help alleviate any stress from investments. The patient investor is not worried about short term market movement as they can be confident they are properly positioned for long term financial health.

[Read More](https://investant.net/blog/CreatingaFinancialSystemforyourMoney) About The Investant Approach To Personal Finance Management

### Set Up For Success

As mentioned earlier, the patient investor is setup with a financial system that promotes long term confidence. While those with strong patience can maintain the calm in any environment, it helps to create an environment with peace in mind. In our day to day lives, this might mean choosing to take the back roads instead of the highway every now and then or staying in on a Friday night. In personal finance, this can be created by having a healthy savings and refraining from keeping all your eggs in one basket.

When you have a healthy savings, it's not worrisome when the car needs to be repaired or the hot water heater needs to be replaced. If you lose your job, you're prepared! The day to day stress of these life events don't weigh over you because your financial system accounts for the bad just as much as it does the good.

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Practicing patience as an investor is vital for long term financial health and well being.

The Patient Investor

#### Building a time machine to your financial future through responsible input/output

Most things we deal with can be broken down to simple input/output. Your financial future is no exception. By understanding this principle and applying it to your finances, you can build a metaphorical time machine that transports you to your desired financial future.

>Act simply, think largely, invest responsibly.

Not sure where to start? You're not alone. Every financial journey begins with a single, intentional step.

### Building Your Financial Time Machine

In personal finance terms, simply put, your income is your input while expenses are your outputs. The beauty of this system lies in its simplicity: consistent, responsible control over your inputs and outputs will lead to significant and predictable financial growth.

1. Set your destination before you start your journey. You need to know where you're going. Do you want to retire at 50? Buy a house in 5 years? Have $1 million in investments by 45? Be specific and realistic.
2. Calculate your route. It's time to map out how to get there. Again, BE SPECIFIC. Use math to complete a top-down approach to this plan. We can start from the goal and back into exactly what it means for our day to day budget and required weekly/monthly savings.

![investant-financial-planners-theme-stock-photo.jpg](https://res.cloudinary.com/dnmr13rcg/image/upload/v1714544567/investant_financial_planners_theme_stock_photo_57ff6eaffb.jpg)

### Calculate your route

The [Investant Savings Calculator](https://investant.net/tools?block=SavingsCalculator) is designed to transform your financial goals from abstract dreams to concrete plans. Let's walk through how to use it:

Let's build out a goal for a 25 year old to reach $1 million invested by age 45.

- Initial Deposit: How much can you invest right now? This is your launch pad. Let's start with $5,000.
- Monthly Contribution: Commit to a consistent monthly investment. For our $1 million goal, let's aim to invest $1,850 monthly (Come back and change this value to see how it impacts your end result!).
- Time Period: We recommend setting this in years. For our example, that's 20 years (from age 25 to 45).
- Annual Interest Rate (%): Currently, high-yield savings accounts are offering between 4% and 4.25%. Check out our detailed guide on [The High Yield Savings Account in 2024](https://investant.net/blog/TheHighYieldSavingsAccountIn2024) to maximize your returns. The average retirement account makes between 5% and 8% annually. Let's use 7.5% as though we are depositing these savings to an aggressive (stock heavy) retirement account.

>Starting at 25 vs 30 can mean a difference of HUNDREDS OF THOUSANDS of dollars! See how adding 5 years can make a dent on the [Investant Savings Calculator](https://investant.net/?block=SavingsCalculator)!

With a $5,000 initial deposit and $1,850 monthly contributions across 20 years at 7.5% annual interest rate, we will have a Total Investment of $1,015,218.58 at the age of 45!

If you're just getting started, you may be thinking that $1,850 invested per month is not doable right now. But, we can make a plan to get there. Your next steps to meet this goal should be to take a total look at your income and expenses today, and use this new understanding of what monthly savings are needed to decide where your income and expenses need to be. To comfortably put away $1,850 per month while living a [middle class lifestyle](https://www.forbes.com/advisor/banking/average-monthly-expenses/) in America today (average monthly expenses of $6,081), you would need to make $7,931 per month or $95,172 per year.

A $95,000 salary is in the [74th percentile](https://dqydj.com/salary-percentile-calculator/) of American Workers based on full-year 2023 and a completely achievable wage which can be surpassed through hard work, dedication, and discipline.

Pro tip: This isn't just a number. This is your potential. Whether you're a recent grad, a new professional, or someone looking for the next promotion, this goal is within reach.

### Periodic Calibration

Your financial time machine isn't a set-it-and-forget-it device. Schedule quarterly or semi-annual reviews to:

- Assess your progress
- Adjust monthly contributions
- Rebalance investments
- Account for life changes

Start small, but start now. These periodic reviews are a great chance to have a conversation with yourself and/or your partner about where you financially stand and the actions you're going to take going forwards. If you don't like what you're seeing, have the tough conversation then and there.

>Your financial future is not about timing the market, but time in the market.

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

Building a time machine to your financial future through responsible input/output

The Financial Time Machine

I’ve known many financially successful individuals throughout my lifetime. It’s incredibly easy to get caught up in the idea that more money will make you happier. After all, more is better than less isn’t it? The irony of life, is the harsh reality of it. Money can remove unhappiness and relieve stress but overall does not have a large impact on day-to-day happiness. If it did, you would think that the celebrities you read about who blew up their lives and are living in misery would be happier than us. But the law of diminishing returns and hedonic adaptation can be easy to understand but hard to accept. 

The most dangerous assumption to carry, in my opinion, is the idea that more money = more happiness. It certainly doesn’t hurt to have a larger nest egg, but I’ve seen money come with a range of problems. 

One individual I met (we will call them Jane) was an extremely intelligent lawyer who was a partner at a small firm. Jane made very good money. However, in her mind it wasn’t a lot. She knew people she worked with who were far wealthier. This became a big source of misery for her. She ended up taking it out on her family and friends and burning bridges in her personal life. Behaviorally, we can see that although reality shows she is by all metrics (successful) in her career, due to social comparison and an inflated sense of self, she robbed herself of enjoying the fruits of her labor. In this situation I would define a loose equation for happiness as:

**Happiness = Income - expectations**

_by inputting your numbers you can see where you fall on the happiness spectrum._


**Jane’s Happiness**

>$150,000 (income) - $170,000 (expectations) = negative (happiness)

One other individual I met (we will call him Steve) was Jane’s boyfriend and an extremely content individual. He loved his office job. He was less financially successful than Jane, but much happier. He always underspent his income, had low expectations, and was intrinsically motivated to work hard for himself and his team. His hobbies were inexpensive and valued relationships over material goods. They were financially incompatible individuals which later showed when they broke up. 


**Steve’s Happiness**

>$90,000 (income) - $60,000 (expectations) = positive (happiness)

It is extremely easy for an individual to attribute their financial success solely to their skill or intellect and ignore or dismiss any factors that were outside of their control. Some factors being: who they were born to, the people they met in their career, their ability to pay for expensive schooling, etc. Successful individuals can quickly fall into the trap of falsely assuming that their financial success was solely due to their abilities. This is a prime example of survivorship bias and overconfidence and can lead to successful individuals perceiving themselves as subsequently better than less successful individuals and inadequate in respect to their peers.

Money as financial writer Morgan Housel put it is “[The Greatest Show on Earth](https://collabfund.com/blog/investing-the-greatest-show-on-earth/)” and reveals a lot about human nature and behavior. Re-examining your beliefs around money is incredibly important. There are so many ways to view it. Some people view money as a tool to build and live a better life, while as others use it as a benchmark of success to compare themselves against others. Your relationship with money will have a huge impact on your day to day happiness. 

![OriginalLogoInvestantTHIN.png](https://res.cloudinary.com/dnmr13rcg/image/upload/v1701147178/Original_Logo_Investant_THIN_1c2347d933.png)

Exploring the relationship between money and happiness.