Edge

About three years ago, during the onset of the pandemic, I was often left wondering where I was going to be getting my edge in creating wealth that is needed to have a path to financial independence. Financial edge in the field of investment was elusive and not yielding major delta over the indices to create enough alpha for the time I was spending on it. After loads of solitary walks, I figured out that the best edge that I had over virtually everyone else was in the knowledge of the job that I was in and the out-executing everyone in the work in front of me. It was something I could action; the opportunity was there and I threw everything and the kitchen sink at it. I pivoted and attacked it with a sense of urgency and value creation with all the energy that I could possibly muster. Started gradually moving from individual stock selection to more towards a conservative portfolio with more cash, more index funds and select stocks like BRK which I understood well.

It was scary to acknowledge that I had no real edge over the market. At the same time, it was not clear that pouring more energy will result in better outcome in my job. Over the last 3 years, my income from work has multiplied several fold (prompted by two big promotions), the portfolio continues to be conservative but continues to provide decent returns from the index funds and the underlying simplicity with a huge surplus of time that I have been able to invest back in family and work. The underperformance of the portfolio compared to the market due to the cash component (t-bills and bonds of course) is more than compensated by the progress on the work front.

Was it clear this was going to be the outcome? Of course not. One had to leap to find out. To each is own, but this pivot really paid dividends for me. It all started with destroying my own idea that my edge would come from investing.