When we had our first child, it seems like we were prepared for the apocalypse whenever we stepped out the door. Below is a visualization taken from Pinterest, while we actually had this $60 SkipHop diaper bag filled to the brim.
Compare that with what I grabbed as my “diaper bag” for our youngest baby this morning:
If I am going to be out for no more than a few hours, this is all I really need.
– 99 cent reusable grocery bag
butt everything wipes
– two diapers
– poop bags (also used for dogs)
– food/drink (if breast milk unavailable)
If you aren’t experienced, then you want to be prepared for every possible situation. Over time, you realize what you really need and leave everything else at home. Instead of more stuff, you are instead mentally prepared with the various improvisations you can perform in unexpected situations. (I also keep a bag in the car with an extra change of clothes for everyone.)
A similar example is packing luggage. What used to just be for “backpackers” is now for everyone. Websites about packing light abound. My first few trips, I packed myself a huge, cheap Wal-Mart suitcase at maximum-weight along with another maximum-size carry-on. Something like this:
After many flights (and an experience with delayed luggage), like many others I found myself with just a carry-on travel backpack for a month-long trip (or even longer).
I feel like this trend should apply to investing as well, but it seems like the ultra-wealthy tend to have a more complex mix of investments. Perhaps the very wealthy like to spread their money across various asset classes like real estate, private equity, and hedge funds because it reduces the chance of catastrophic loss. For example, sometimes I want to buy a rental property as it seems it would offer additional diversification to a stock and bond portfolio, but I really don’t want to deal with bad tenants or mediocre property managers.
I do like the idea of simply transferring over some of my bond interest payments and stock dividends to my checking account every month in retirement. However, a part of me is uncomfortable having so much of my net worth in investments where the only tangible evidence is paper and ink via monthly statements.