Escaping the Poverty of Our Intentions
Understanding the stock market can dig us out of two kinds of poverty
If you would've invested $10,000 in an S&P 500 index fund in January 2000, by December 2019, your investment would be worth over $30,000, which is an annualized performance of about 6%. For doing nothing but opening up an account, that's a pretty significant return on your money.
What's crazy is if you exclude gains from the market's 10 best performing days over those 20 years, your annual return drops to 2.44%, and your investment would only be worth closer to $16k. Miss the best 20 days in the last 2 decades? And you're left with a measly $10,176 or a 0.08% return. At that point, you're not even keeping up with inflation and would've been better off investing in bonds or CDs.
In order to take advantage of market highs, you have to keep investing and stay invested in the stock market. The common advice to "buy low, sell high" isn't wrong, but it doesn't hold up well in the real world because the risk of timing your entries and exits wrong is extremely high. While some investors claim to be able to predict the ebbs and flows of the market, the best strategy for the majority of people is dollar-cost averaging.
"Dollar-cost averaging refers to the practice of systematically investing equal amounts, spaced out over regular intervals, regardless of price."
In practical terms, dollar-cost averaging is basically just depositing the same amount of money each month into an index fund. This way, sometimes you'll buy when the market is high and sometimes when it's low, but over time, the rising trend of the economy will give you a decent positive return. By merely being in the market when it shoots up on those few rare days, your returns increase dramatically.
In the same way that as investors we must always be in the market to take advantage of rare performance hikes, we as creatives must also maintain a practice to take advantage of rare inspirations from the muse. Steven Pressfield explains how she works:
"Each day she makes her rounds (I like to imagine her traversing the globe in a small, open-top space vehicle, kind of a cross between the Jetsons and the old Flash Gordon serials), carrying her bag full of ideas. She’s a bit like St. Nick, only instead of giving gifts to children she gives ideas to artists. To Beethoven she gives da-da-da-dum, to Stephen King she offers Carrie."
She passes over your desk or easel or studio on Monday. If she doesn't find you there, no big deal. She'll come back Tuesday. Then, Wednesday, Thursday, Friday... gone again? Now she's starting to feel unappreciated.
Much like the stock market, the muse rewards consistency, not bursts of energy when we feel like calling on her. If we aren't showing up consistently to receive, how can we expect her to consistently provide ideas?
As opposed to amateurs, professionals know their best ideas can't be timed or forced or willed into existence, so they must give themselves every opportunity to be visited by the muse. They produce these opportunities by adopting and sticking to a creative process, or what Seth Godin calls the Practice.
We all get visited by the muse from time to time whether we're ready for her or not, but without a practice, a vessel to transform that inspiration into something, it's as good as wasted.
Sculptor Elizabeth King says it better, “Process saves us from the poverty of our intentions.”
Professionals "dollar-cost average" their creative careers by investing time consistently each day. Some days their work is terrible and some days it's good, but they show up daily regardless. The trick isn't writing (or painting or singing or designing) only when you're inspired. It's showing up regardless of how you feel so the muse knows where to find you when she's passing over.
Through steady investments of time and effort, the muse, like the market, will give you returns you couldn't have dreamed of.
"I write only when inspiration strikes. Fortunately it strikes every morning at nine o'clock sharp."
- Somerset Maugham