September Sale! 
It’s important to note that what Brittany (and Tiffany!) did is totally impossible. NOBODY knows when the top or bottom of the market will be. When the market drops 20%, no one knows in the moment if that’s the bottom and it’s about to shoot back up, or we’re just started on a 50% decline. No one knows.
YET STILL, even though Brittany had IMPOSSIBLY PERFECT timing, she still lost to Sarah. That tells an important lesson. EVEN IF YOU GET THE TIMING RIGHT, while you’re sitting on the sidelines waiting to “buy the dip” the early and often investor will be building a lead you’ll never overcome.
There’s an even more important lesson here: ALL THREE OF THESE INVESTORS ARE RICH. Even “terrible” Tiffany is a multi-millionaire! Why? Because once she got in the market she practiced BUY AND HOLD investing. She bought, held, and let the market do its work for decades. So even though she had IMPOSSIBLY BAD timing, the very simple practice of buy and hold made her rich.
You can do the same! Set up some auto-contributions to your Roth IRA, 401k, or brokerage account, and have your money auto-invested into an index fund. That’s it. That’s what these three did to turn a few hundred bucks a month into millions.
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Jeremy
US Stock Market Crashes 1982-2022
| Dates of Crash | Duration (Days) | Percent Drop | Event |
| 8/25/1987-12/4/1987 | 101 | 33.4% | Black Monday |
| 7/16/1990-10/11/1990 | 87 | 19.7% | Kuwait War |
| 9/1/2000-10/9/2002 | 768 | 49.0% | Dotcom Crash |
| 10/12/2007-3/9/2009 | 514 | 56.5% | Financial Crisis |
| 2/19/2020-3/23/2020 | 33 | 34.1% | COVID Crash |
| 1/3/22 – 10/12/22 | 196 | 25% | Inflation Crash |
Recap
Amount Saved/Invested: $96,000 each
Investment: Buy and hold an S&P 500 index fund
Tiffany (worst timing in the world): $735,985
Brittany (best timing in the world): $1,101,330
Sarah (auto invests monthly): $1,234,403
Tiffany, Brittany, and Sarah aren’t real. No one can perfectly predict market tops or bottoms. But these numbers are real, based on the exact returns of an S&P 500 index fund and a 3% interest savings account over the last 40 years. Here is the spreadsheet I used to generate these results.
So if you’re waiting for the market to continue to drop before you put your money in, think about whether or not you’re so good at predicting the market that you can do it better than Brittany who knew when to invest down to the exact day. And even if you are that good, realize that it’s still a losing strategy to the early and often approach that Sarah executed so flawlessly.
As always, live below your means and invest early and often and you’ll win with money.
Jeremy
