TL;DR: The only way to operate in the world is to form your own views on things. You can’t outsource this. Without forming you own opinion you’ll be lost. You can lean on others to help inform that opinion, but in the end you need to captain your own ship. This is true in all aspects of life. Particularly in investing.
The first principle is that you must not fool yourself and you are the easiest person to fool.
– Richard Feynman
The most important thing is to think for yourself. To form your own opinions and interpretations. Principally because it is the only sure way to make your way in the world. If you take other people’s advice on a course of action, without understanding internalizing and deciding on that course yourself, you will have no way of navigating the subsequent decisions that need to be made. You don’t know how you got into the maze, so you don’t know how to get out.
This happens all the time in the investing world – people get a hot tip from someone to buy a stock. Even if the tip is a good idea, unless that person receiving the tip understands the fundamentals behind it, they’ll be lost. They might make the purchase, but they’ll have no way of knowing when to make the sale, because they have no internal idea of intrinsic value. I’ve certainly been guilty of this myself and been burned in the process.
On a higher level, when you accept conventional wisdom on how to invest, you instantly close your mind to alternatives. You stop asking questions. For a long time, I was under the impression that the only legitimate investment options were bank savings or the stock market. Only after I started asking myself how I could reach Ramen Retirement sooner did I take the steps to explore alternative investments and ways to generate passive income that outperformed stocks, bonds and any other conventional options advertised and sold to the masses.
In my experience, when something doesn’t make sense to me, it’s because it probably doesn’t make sense to anyone. Occasionally you’ll later learn something that helps you change your mind, and with added information you should be happy to do so. What this means though is that when something doesn’t add up, don’t shy away from it, but instead go toward the inconsistency. Poke and prod it. Figure out what the truth is as best you can with the information you’ve got in front of you. Work from the first principles and try to make sense of the world. Don’t accept that you don’t understand or aren’t smart enough. Instead realize that you are capable of understanding anything, and any shortcomings are either in the manner in which something was explained, in the omission of information or, just possibly, it’s full of shit. Figure out which one it is and act accordingly. Stay true to your own point of view and operate within your circle of competence.
And remember to enjoy the journey!