Dark Anxiety

Why is it oldies drive really slowly and carefully? Surely they have less to lose? They’ve had a good innings, so why not enjoy what’s left, careen around town like Lewis Hamilton while snorting crystal meth and burning rubber at the traffic lights?

But, it’s true, the older you get, the more cautious you become. Like approaching the edge of a high diving board you know you are going to have to jump from, you begin to walk a bit slower, trying to find an alternative to making that leap. Just a few more minutes, please, while I enjoy the view from up here!

dark anxiety

Self Generated IFA

As I grow older, I notice that I am becoming increasingly risk averse and more prone to seeing shadows where before the road ahead was bathed in sunshine. It’s rather annoying, and fetters my decision making as doubt clouds my outlook. In many of the FIRE blogs, I see us talk a lot about goals and objectives, plotting our future direction and trying to get the best odds to favour us. Behind us rides dark anxiety, the risk of loss. Unfortunately, over time, he’s gaining ground.

About fifteen years ago, I bought around ten grand’s worth of shares in Scottish Telecom (renamed Thus in those trendy dot com years). I did this based on the recommendation of a consultant I knew who was working there. “You can’t lose on them Jim, it is buying money”, he told me. Two years down the line and I had lost nearly every penny. At the time, I shrugged ruefully and put it down to experience. I’d just have to save the cash and try again because the next bet might quadruple my money. Nothing ventured, nothing gained.

I know this to be true, because that’s what I was writing in my diary at the time. I was charging forward into the future, confident that things would turn out right in the long run.

I look back on those years now in sheer horror. What was I thinking?!! If I had only stuck that ten grand in an index fund, it would now be worth…no, I can’t face it! And Thus was only one bad bet I made. I lost cash on quite a few others too.

At the same time as I work through my contemporary horror, I do admire and respect that attitude and confidence I had, underpinned by the time horizon I was working to. Retirement was so far away I could afford to make some mistakes and I wasn’t frightened or intimidated by the future. These days even passive investing looks extremely risky. My index funds, since the start of the year have lost….oh, you don’t want to know. I don’t want to know! If only I had converted some of them to cash, like I thought about at the turn of the year.  Maybe just ninety five percent of them, something like that. The other five percent, I could have risked.

I jest, of course. I accept that risk generally equals reward and that’s the deal we’ve signed up to. None of us, aiming for FIRE, are going to be able to do it by stuffing our cash under the mattress. Unfortunately, none of us can advise anyone else on what constitutes a risky approach to generate the best return, because the infuriating answer to that question is “It depends”, closely followed by “It’s up to you”.

So if I could hop Back to the Future to 1999, what would I tell myself to do with that ten grand? You know, I can’t help but think I’d tell myself to Damn the Torpedoes and have a punt. Despite those financial setbacks, I did learn from the experience: I subsequently read up more on investment strategies, I learned about asset allocation, and I realised that I wasn’t the type of person to gamble on individual shares. I became a better investor (for me) perhaps more quickly than I would otherwise have done – and finding out more about yourself is the one Never Ending Lesson on the road to FIRE.

12 thoughts on “Dark Anxiety

  1. To turn your opening question on its head, why are young men risk takers? Is it because it’s genetically programmed into them that if they don’t take some risks they’ll never make it to top dog and have the chance to reproduce and pass on their genes? If you’re older and already have some status perhaps it’s then better to be more careful and hold onto what you’ve achieved, especially as you’re running out of time to make up any losses you suffer.


  2. I remember Thus (and their three dots!) really sad to hear it took you £10k to learn a lesson. I prefer to learn from other people’s mistakes… not that I haven’t made any of my own of course. I lost a very tiny amount on Northern Rock, and that was enough to shake me back into the safer dividend shares and funds/index trackers only.

    I think for most people, they do reduce their risk as they age, however there are a few outliers such as Richard Branson and the like who just keep on piling into new ventures. They love what they do, and there’s no reason to stop.

    You mentioned goals… what ARE yours incidentally?



    • Well, one of my goals is to get back into setting goals! I recognise how useful they can be and used them a lot through the years – of course, one of my biggest became to Retire Early. I had a target figure, a calculated time frame and had it all written down and planned to almost the week I could quit. I became so focused on the financial side of the equation I forgot to set any other goals for “post retirement”, hence some of my ramblings on this blog about drifting along.

      Liked by 2 people

  3. Sorry to hear that you got stung for your £10k.

    When you’re younger, you have time to repair or overcome any bad consequences which result from bad decisions. The older you get, the less time you have so it makes sense to be a little bit more risk averse. Being older, you also benefit from experience which you may not have as an adrenaline-junkie youngster!

    I recall my parents (on the advice of a friend who was ‘in the know’) bought over £10k worth of Marconi shares (each…). I can’t recall what they paid for them but they did pretty much lose all their money. Their only ‘slight’ consolation was that their friend lost even more as he had followed his own advice!

    I’ve still got 10-15 years of investing ahead of me so am willing to take some risk, ie buy some individual shares (even buy some ‘blindly’ in the case of my Monkey Stocks!) but I’m fine with the risk as long as I’m not putting all my eggs in one basket.

    My parents had never bought shares before and I have no idea why, when they had just retired early, they would just sink that amount of money in something they had very little knowledge on.

    These days, they’re a bit like the outliers M mentions, ie they dabble a bit on the Hang Seng Stock Exchange but at least they actually know what they are doing now – most of the time!


    • I think you should risk when you’ve a reasonable time frame, such as ten years. The more calculated the risk the better and maybe I should have done a bit more work on Thus, but I’d had some successes on individual shares too and felt comfortable doing it. And I enjoyed taking the risk, it added a bit of spice to life!


  4. I had my own disaster when I invested in RBS shares, a lesson learnt! I was working for an employer who was a client of RBS, I attended lots of meetings in their plush offices in London and the guys working there were saying great things and how good the shares were. Then – it all went bang – some of them ended up losing their job and those that remained ended up in a department that was ‘sold/spun off’.
    I still have the shares and they are still in a mess. I keep them purely to look at them and realise that I have to learn the lesson and understand the risks. I now invest in index and managed funds too. I have individual shares in an old employer (gained via share saves) which I have held on to as they are doing well and I have used some of their proceeds to buy other shares. I have used the ‘don’t keep all your eggs in one basket’ approach to investing. What more can you do?
    Hindsight is such a great thing, the ‘if only…’ in life — If only I knew I was going to XXXXXX….
    If you spend all your time worrying about the ‘what ifs’ you never get to live and enjoy the here and now. As you say, you learnt from this and started to research and learn how to make better choices in the future.


    • I’ve heard some horror stories about RBS employees who were sinking their pensions into discounted share saves when the bank could do no wrong. Some have lost literal fortunes, while Fred the Shred warms himself with his 700k a year pension that he’s taking for wrecking everything.


  5. Reblogged this on Live Da Life and commented:
    I think there is a real point here in terms of investing. I don’t know of anyone who has been successful in investing without experiencing several very painful failures. I’m still living with some. The point in investing, as in life, is learning from the experience, not giving up and moving forward stronger because of this lesson.


  6. Hi Jim

    I had a few bad results when I was investing to make big capital gains but luckily only one real disaster. I did learn though that unless I was going to really do a lot of research on the smaller companies I was certainly taking big risks.

    I now tend to stick with larger companies so I am reasonably sure that they will not all go bust (or if they do then we all in real trouble no matter where our money is).

    I do enjoy investing in individual companies and it has generally been rewarding, but will have to think about moving to funds when I actually do have to start taking cash out of my pot.

    Best Wishes
    FI UK


  7. “…because the infuriating answer to that question is “It depends”, closely followed by “It’s up to you”…”

    And this is the reason saving and investing is such a pain in the ass at the start, there isn’t a fixed road map to follow. You got to figure some stuff out yourself, which means being honest with yourself. And people generally suck balls at self reflective honesty. We’d probably all like to be risk-loving nutters, turning a 1000% return one year to complete losses the next, with a trail of adoring ladies and men behind us… but we’re not and over estimating our risk tolerance is pretty common. Then we get stung and think bugger this investing, I could have just spent the cash…


  8. I agree with Ron & a few others who’re basically saying ”Nothing ventured, nothing gained”. I believe 99.99% of people who’ve achieved something worthwhile only did so because they got up, dusted themselves off & then went for the next hurdle after falling on their face – you can only finish the race if you keep at it. But, it’s one of those things that’s simple in theory, but not easy in practice, so I’m not meaning it in a smug way at all.

    Sometimes, you almost have to give it a go if there seems to be a chance it will disproportionately change your life – when I was a kid, someone I knew was offered to buy gold bars at a suspiciously good rate on a ‘ask no questions, hear no lies basis’ with respect to their origins. He took a sample (under tight supervision of the reluctant seller of course) back to his workshop & tested them before buying ….. & learned that if something seems too good to be true, it is. [The only thing he didn’t test was specific gravity, which he didn’t know about at the time …..& that was what would have busted the conman]

    However, if the deal had been real, it would have secured his family’s future & at the time he could afford the punt – so he took a shot with the full agreement & understanding of his wife & at least they went in clear on the risks. Had they not done it, for the rest of their lives they would have wondered if they blew their only opportunity ….. the lesson I took from that though, was hedge your bets & try just the one first maybe. Anyway, I grew up with gold bars in the house for door stoppers man, Gold Bars !!!


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