The Myth of making money in the market what should I invest in now?

Remember this fable - the ant works hard all summer to lay up food for the winter and the grasshopper hangs out. Guess who lives?

The great myth of our time is that we can all make money in the market. Some can make money in the market but they work very hard and they tend to be gifted. We can all sing, play games or cards but that does not make us masters. Just like singing opera, playing tennis at Wimbledon even playing competitive  poker - demands exceptional skill rarely found in any broker let alone in the rest of us civilians. Investing well, as Mr Buffett has shown us is a rare thing.

So relying on being exceptional in the market is a mug's game. The math is against you. No one should have a plan that has as a precondition being exceptional.

So what is the more sensible alternative? I think that I have found that it is that most old fashioned, ant like, practice of saving!

The greatest opportunity to sleep at night and to have a future is to save. Saving does not demand that we are clever.  It demands that we have discipline. Of course that is hard too. I found it best to hav an "insurance" scheme that for me to take the money out every month. After the first 3 months - you never notice. But over time...... I had the habit. The pay off is huge.

When my kids were born, I knew that educating them as adults would be a strain on me and them. I put aside $300 a month for 18 years. Both had their university paid for and left with some extra money. I did not have to struggle and they were not encumbered. they could chose their lives.

Knowing that I had the school fees covered I could leave the wage world when my kids were teens. If I had not had this saved, I might have been forced back. Leaving school with no loans and $20k each meant that my kids could choose what they wanted and not what they had to do simply to repay their debt.

I not only saved for my kids but also to give me a cushion.

As a consultant, who never knows where his next cheque will come from, I have always had my F**k You fund - enough money saved to last up to 2 years. This fund is a priority. I always use my first dollar to refill it if I have spent part of it.

I have had such a fund nearly all my working life, even when I had a real job. Having a pool of cash, gave me an independence at work. I could challenge. I could be my own person. As a consultant, I can choose my work and those that I work with.

Since the early 1990's I have also been debt free. This was very hard to pull offf. Helped by not having to pay school fees as a result of my early savings. My move to PEI was key to this. Here I could have a wonderful home at a fraction of the cost of Toronto. It also means that I am part of a great way of life too. Where we live is a key choice I have found. I could not live in a big city and not have a lot of debt.

What then does having savings mean? How is this different from trying to make money in the market?

The day after CIBC said good bye to nutty Rob, I had lunch in a pub with Robin. This was our strategic planning session. We left the table with a one word plan - "Freedom" - we were going to test every decsision we made with the idea of Freedom. If we do this, buy this, go here - will this make us more or less free?

Sometimes we accept less, the dogs for instance tie us down, but the payoff in love is so high. But on the whole we take the path to freedom most times.

The more free we are, the greater the reinforcement. Robin can go away for weeks to see our grandchild at a days' notice. I can take the work I love - often work that does not even pay at all. Our schedule is ours.

Unlike the idea of being smarter than 99% of the people in the market, being disciplined about becoming free does not demand that I am very clever or that I will somehow know more than others. It only demands that I value being free more than having stuff. The irony is that over time, we have had a comfy life anyway.

So when people ask me today, "What should I invest in?" my answer is "Invest in your own freedom" - do all you can to get free. Be an ant and not a grasshopper.